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Rivian stock price forecast: Buy or sell ahead of earnings?

Rivian (NASDAQ: RIVN) stock price has drifted upwards in the past few days as investors wait for the upcoming earnings. The shares jumped to a high of $13.87, which was a few points above the year-to-date low of $12. So, is Rivian shares good buys ahead of earnings?

Rivian earnings preview

Rivian, the Amazon-backed electric vehicle company, will publish its financial results after the market closes on Tuesday. These numbers will provide more color about what happened during the quarter and what to expect going forward.

These results will come a day after Lucid published awful results, as we wrote here. The results revealed that revenue jumped to $149 million, which was lower than expected. The firm produced 2,314 cars during the quarter while the cost of revenue soared to over $500 million.

Analysts expect that Rivian’s revenue will come in at $665 million, which will be slightly higher than the $663 million it made in the previous quarter. The company made just $95 million in the same quarter in 2022. 

Rivian has been ramping up its deliveries in the past few months. The company manufactured 9,395 vehicles in Q1 and then delivered 7,946. That was a much higher number than what it made in 2022. It hopes to manufacture 50k cars this year.

Data compiled by SeekingAlpha shows that analysts believe that Rivian’s revenue will continue soaring in the next few years. They believe that the company’s revenue will hit $4.12 billion this year followed by $8.47 billion in 2024. The first annual profit is expected to come in 2028.

The main catalyst that will move the Rivian stock price will be the company’s cash burn. The previous results showed that the company lost money on each car it sold, pushing the cash burn to over $6.4 billion. Analysts expect the company to say that its cash balances plunged by 6.8% to about $10.78 billion.

Rivian stock price forecast

RIVN chart by TradingView

Rivian share price has been in a bearish trend in the past few months. In all, the stock has dropped by 665 from the highest level in September. Now, there are signs that the stock is bottoming after it found a strong support at $11.88.

The shares are consolidating at the 25-period moving average while the Relative Strength Index is approaching the overbought level. Therefore, I suspect that the company’s cash burn will send the shares much lower after the results. If this happens, the next level to watch will be at $11.88. 

On the flip side, if the company publishes strong results, we could see the shares jump to the next resistance point at $16.

The post Rivian stock price forecast: Buy or sell ahead of earnings? appeared first on Invezz.

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