Rivian Automotive (RIVN, Financial) shares experienced a significant drop, with the stock falling by 7.05% following the company's announcement of revisions to its vehicle production forecasts due to part supply shortages. This adjustment affected both consumer R1 models and commercial delivery vans, though the decrease is not attributed to a lack of demand.
Rivian announced a revised production forecast of 47,000 to 49,000 electric vehicles (EVs) for the year, down from the previous estimate of 57,000 units. CEO R.J. Scaringe had previously alluded to supply chain challenges without providing specific details, citing issues with in-house motors and component supply. However, Rivian remains optimistic about surpassing its previous delivery numbers from 2023 by utilizing existing inventory.
In terms of financial health, Rivian (RIVN, Financial) shows several warning signs that investors should consider. The company has an Altman Z-Score of -1.37, placing it in the distress zone which suggests a potential risk of bankruptcy in the next two years. Additionally, the Piotroski F-Score is low at 3, indicative of poor business operations. Insider selling has also been significant over the past three months.
Despite these challenges, Rivian is not considered likely to be manipulating its financials as indicated by its Beneish M-Score of -2.28. Currently, Rivian is trading at a price of $10.0201, with a price-to-book ratio of 1.48. The GF Value assessment labels Rivian as a "Possible Value Trap," with a GF Value of 47.59. For more detailed valuation, visit the GF Value page.
While the market cap stands at approximately $10.1 billion and the company boasts significant revenue growth year over year, challenges persist with negative net margins and high volatility. Investors should exercise caution given the current valuation metrics and the company's financial health warnings.
