Why One Analyst Thinks RIVN Stock Is a ‘Black Eye’ for EV Stocks

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Rivian (NASDAQ:RIVN) stock gained nearly 18% on Thursday after reporting first-quarter results. However, one analyst thinks Rivian is a “black eye” on the electric vehicle sector, calling into question its long-term trajectory.

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The analyst in question appears to be contradicting the market majority. Wall Street has generally been celebrating Rivian in the wake of its Q1 report.

Yesterday, the company reported $95 million in revenue, which missed analyst expectations for $131 million. Rivian also reported a loss per share of $1.43, coming in just above expectations for a per-share loss of $1.45.

More interesting to investors was that Rivian reiterated its full-year forecast, suggesting that it will produce 25,000 vehicles in 2022. This will likely come with an adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) loss of $4.75 billion. Wall Street appears pleased with the fact that Rivian is holding tight to its latest full-year production guidance.

However, one analyst disagrees.

Bank of America Knocks RIVN Stock

According to Wedbush analyst Dan Ives, perhaps these numbers were much more mediocre than the market believes. At least, that’s according to his recent note, in which he calls the company a “train wreck.” In this note, Ives cut his price target in half from $60 to $30, to reflect reduced estimates and a lower valuation multiple.

Ives took issue with Rivian’s communication with investors, calling it a “case study of what not to do.” Since its IPO, the company has reduced its production targets for 2022 and raised scrutiny after discussing price hikes for its electric vehicles.

That said, Ives did say that Rivian could be a “stalwart” in the sector. To do so, he says it will need to leverage its engineering capabilities and stay on track.

So with Ives’ ruling apparently out of alignment with Wall Street, how should retail investors react? The bottom line is that now is the time to make independent judgements on individual companies.

On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Chris MacDonald’s love for investing led him to pursue an MBA in Finance and take on a number of management roles in corporate finance and venture capital over the past 15 years. His experience as a financial analyst in the past, coupled with his fervor for finding undervalued growth opportunities, contribute to his conservative, long-term investing perspective.

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