Why Shares of Rivian Automotive Shot Higher This Week
Shares of Rivian Automotive (NASDAQ: RIVN) popped as much as 19% this week, according to data provided by S&P Global Market Intelligence. The upstart electric vehicle (EV) manufacturer got an upgrade from a Baird analyst, while its CEO was bullish at the Code business conference. As of the close on Friday, Rivian shares had risen 17.9% this week.
Rivian Automotive is a premium electric vehicle manufacturer that is just getting its feet wet when it comes to producing vehicles. Last quarter, it produced around 14 thousand vehicles from its factories, up from 4.4 thousand a year prior and zero production levels in 2021. The company is highly profitable but has a strong balance sheet due to its huge initial public offering (IPO) in late 2021. Last quarter, it had an operating loss of $2.7 billion.
The most important thing for Rivian is scaling up its production to spread out its huge fixed costs. Selling its cars for upwards of $100 thousand or more, Rivian vehicles have strong unit economics and plenty of demand from wealthy consumers. It just needs to get the cars out the door. Investment analysts at Baird see the company beating its third-quarter deliveries estimate, which is supposed to already grow significantly year over year. For the full year in 2023, the company is expecting to deliver 52 thousand vehicles to customers. Investors likely took this upgrade in a positive light and sent shares of Rivian higher this week.
Source Fool.com
