Rivian Automotive, Inc. (NASDAQ:RIVN) Just Reported And Analysts Have Been Cutting Their Estimates

The full-year results for Rivian Automotive, Inc. (NASDAQ:RIVN) were released last week, making it a good time to revisit its performance. Revenues came in at US$4.4b, in line with forecasts and the company reported a statutory loss of US$5.74 per share, roughly in line with expectations. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

View our latest analysis for Rivian Automotive

Taking into account the latest results, the most recent consensus for Rivian Automotive from 24 analysts is for revenues of US$4.88b in 2024. If met, it would imply a notable 10.0% increase on its revenue over the past 12 months. Losses are expected to be contained, narrowing 13% from last year to US$4.84. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$6.03b and losses of US$4.46 per share in 2024. There's been a definite change in sentiment in this update, with the analysts administering a notable cut to next year's revenue estimates, while at the same time increasing their loss per share forecasts.

The average price target fell 25% to US$18.44, implicitly signalling that lower earnings per share are a leading indicator for Rivian Automotive's valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Rivian Automotive, with the most bullish analyst valuing it at US$36.00 and the most bearish at US$8.00 per share. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely different views on what kind of performance this business can generate. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that Rivian Automotive's revenue growth is expected to slow, with the forecast 10.0% annualised growth rate until the end of 2024 being well below the historical 116% p.a. growth over the last three years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 14% per year. Factoring in the forecast slowdown in growth, it seems obvious that Rivian Automotive is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing to take away is that the analysts increased their loss per share estimates for next year. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Rivian Automotive's future valuation.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Rivian Automotive analysts - going out to 2026, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 3 warning signs for Rivian Automotive you should know about.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.