Rivian Earnings News and Forecast: RIVN stock zooms higher afterhours after plunging in regular session

• Rivian reported Q3 results late Wednesday.
• The EV truck maker reaffirmed full-year guidance.
• The company effectively reduced costs compared to analyst expectations.
• RIVN stock fell by double-digit percentage on Wednesday.

Rivan (RIVN) stock had a rollercoaster ride of a day on Wednesday. RIVN shares ended Wednesday's regular session down 11.9% at $28.07 after another early-stage EV manufacturer, Lucid (LCID), showed a drop in reservations. At the end of the second quarter, these had been reported at 37,000, but Lucid marked the figure down to 34,000 at the end of Q3. it did not help that Lucid missed EPS Consensus by about 22% and revenue consensus by about 5%.

Rivian stock then shot up more than 8% after hours on Wednesday despite a revenue miss the company's outlook excited the market. Share moved up rapidly 

Rivian earnings news

The after-hours and now premarket surge seems to be a product of rising reservation figures. Reservations jump about twice the figure for production in the quarter from 98,000 at the end of the second quarter to 114,000 at the end of September. Demand is no problem for Rivian.

Where there is uncertainty in production. In Q3 the EV truck maker produced 7,363 vehicles and delivered 6,584 of them. In order to meet Rivian's full-year goal of 25,000 units produced, which management reaffirmed during the earnings call, it will need to produce about 10,600 units. That is a near 70% increase from the third quarter rate.

Rivian reported a reduced per-share loss in the quarter. Whereas Wall Street consensus had been $-1.83 for adjusted earnings per share, Rivian reported a much healthier $-1.57. This was down from $-1.62 in the second quarter, showing that management is taking cost savings seriously. Rivian revenue of $536 million in Q3, however, missed its mark by a little over 3%.

The company's net loss of $1.72 billion in the quarter was about $500 million worse than Q3 2021, but management blamed this on higher costs for nickel, lithium and copper. The company ended the third quarter with $13.8 billion in cash on its books. This means it burned through $1.1 billion during the quarter, but management was adamant that it had enough cash on hand to funder operations through 2025. This is more than enough time to become profitable, so it takes some of the worries away from investors. 

Truist Securities' Jordan Levy remarked, “We view 3Q results as positive [...] given the company’s notable progress on cost management and operational efficiencies and would expect shares to outperform [Thursday].”

Rivian has pushed about 12% of 2022's capex budget to next year.

Rivian stock forecast

As I have been writing this, RIVN stock has bounced up as much as 13% in Thursday's premarket. While already moving higher on what many saw as a positive quarter of trimmed losses, the Consumer Price Index (CPI) headline figure came in lower than expected at 7.7% YoY. This was 2/10ths of a percent lower than expected, and the market has taken this news as evidence that Fed Chair Jerome Powell's rate hikes have begun working and that the central bank may stop raising rates sooner than originally thought.

The daily chart below shows that Rivian stock climbed above its open on Wednesday when RIVN stock collapsed severely. The next two levels at hand are the $34 support level from late October and the $36 resistance level from last month as well. Beyond here is the all-powerful $40 level that strung together a bearish double top formation in August and September. Above $40 Rivian stock is back to being considered in an uptrend.

Wednesday's drop was a worse low than the October 14 low point, which signals that there is an appetite for a reduced share price, but Thursday's earnings and CPI reaction mean a rally is in the cards for the near term. Expect this upside to persist in RIVN stock until an adverse macro event comes to the fore.

RIVN 1-day chart