Rivian Automotive Inc (NASDAQ:RIVN) reported slightly larger losses for the third quarter as the electric truck maker continued to drive production higher, but its growing consumer backlog is "an impressive indicator of overall demand" and ahead of expectations amid the macro storm clouds, said broker Wedbush.
The stock is up 8% in pre-market trading on Thursday to over US$30, having slid over 11% yesterday.
Third-quarter numbers were pretty much in-line with Wall Street expectations, with a third-quarter net loss of US$1.72bn compared to $1.2bn a year ago and US$1.71bn in the second quarter.
Revenues came in at US$536mln, which was up from US$1mln a year ago and US$364mln in the second quarter, having produced 7,363 and delivered 6,584 of its electric vehicles, up from a respective 4,401 and 4,467 in the second.
With over 15,000 EV produced so far this year, management reiterated the target of reaching 25,000 for the full year, which comes as some reassurance to investors after worries last month around the recall due to a potential fault.
Hitting the target is expected to be helped by the recent launch of a second production shift at its factory in Normal, Illinois, which is still being ramped up to capacity.
This will also help reduce losses per vehicle, the company said. “As we produce vehicles at low volumes on production lines designed for higher volumes, we have and will continue to experience negative gross profit related to labor, depreciation, and overhead costs.”
The net consumer pre-order backlog for its four different trucks rose to over 114,000 as of this week, up from 98,000 at the end of June.
The third quarter saw Amazon announce that its custom Rivian electric delivery vehicles have started making deliveries in over 100 US cities, while another commercial partnership was signed with Mercedes-Benz to work together to make bespoke large electric vans under both brands.
Cash stood at around US$14bn at the end of the quarter.
Wedbush analysts said it was a "good quarter" which importantly shows deliveries, reservations, and production "all moving in the right direction".
As the 25k target for year-end around deliveries was said to be on course, the analysts were "cautiously optimistic that many of the headaches in the Rivian story are starting to be in the rear view mirror".
"Overall, this was a major step forward for Rivian and the company is navigating a very complex supply chain in an impressive way.
"We believe this story is still only in the very early innings of playing out with the production piece now really starting to be in place heading into a very important year ahead as the EV arms race plays out."
The broker maintained its 'outperform' rating, but lowered its price target from $45 to $37 reflecting a lower multiple.