Written by Cláudio Afonso | LinkedIn | X
Barclays analyst Dan Levy reiterated an Equalweight rating and $10.00 price target on Rivian shares this Thursday after meeting with the company’s CFO Claire McDonough and SVP of Software Development Wassym Bensaid.
The analyst highlighted Rivian’s vertically integrated hardware/software approach and details on the revamped models R1S and R1T.
“On Monday we met with Rivian management including CFO Claire McDonough and SVP of Software Development Wassym Bensaid. Our visit provided us with a closer look at Rivian’s vertically integrated hardware/software approach and color on the R1 refresh and Rivian’s path to 4Q gross profit breakeven,” Dan Levy wrote.
The analyst summarised the meeting in five points emphasising the cost reductions of the upcoming refreshed R1 models, the improved autonomous driving capabilities and the possibility of licensing software to competitors.
Transcript of the Summary Points
| 1. 50% of materials in R1 were replaced (parts, materials, suppliers, etc) during the R1 re-rate, far more than a typical mid-cycle refresh. These updates will be a key driver of the cost reductions necessary to achieve gross margin positive in 4Q. |
| 2. Early builds of R1 off the new line performed well in end-of-line testing, with better body fit than Generation 1, even before the body shop equipment/tools were fully dialed in. |
| 3. Rivian focus on in-house ADAS/AV reflected in R1 changes. |
| 4. Management desires 12 months cash runway. |
| 5. Rivian sees opportunities in software, including licensing software to other OEMs. |
In a recent SEC filing, Virtu Financial disclosed that it acquired 404,875 shares of Rivian in the first quarter of the year. With the last closing price at $10.70 per share, this new position is valued at approximately $4.33 million.
The firm previously invested in the electric vehicle startup, initially purchasing 16,765 shares in early 2022 when Rivian’s stock price was significantly higher. Throughout the following quarters, Virtu adjusted its holdings, peaking at 146,008 shares in mid-2023.
According to a form filed last week, the CFO Claire McDonough sold 3,210 shares on May 16 at $10.25 per share, totaling approximately $32,902.
Conducted under a Rule 10b5-1 trading plan, the sale was previously adopted by McDonough on June 14, 2023, the filing discloses. Following these transactions, McDonough’s direct ownership in Rivian Automotive stands at 405,422 shares of Class A Common Stock.
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The automaker has been urging early pre-order holders to finalize their purchase of an R1 model by the end of September or risk forfeiting their grandfathered pricing discount of about $18,000.
This discount enables customers to lease a base R1T for $420 per month with an initial payment of approximately $7,000. In an email sent to all the reservation holders, Rivian says “Now is the time” to take advantage of the discount of “approximately 20 percent”.
The EV manufacturer confirmed last week that is partnering with Google on Google Cast and YouTube integration.
Drivers will now have the capability to stream high-definition video content with premium sound directly to their vehicle’s screen, using both a native YouTube app and Cast-enabled apps on their phone or tablet.
The company has recently reported 13,980 vehicles produced in the first quarter of the year of which 13,588 were delivered to its customers. Despite having previously guided a 10-15% quarter-over-quarter drop from the fourth quarter, Rivian is on track and reaffirmed its 2024 production guidance of 57,000 vehicles.
Written by Cláudio Afonso | LinkedIn | X
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