Wrapping up Q2 earnings, we look at the numbers and key takeaways for the automobile manufacturing stocks, including Rivian (NASDAQ:RIVN) and its peers.
Much capital investment and technical know-how are needed to manufacture functional, safe, and aesthetically pleasing automobiles for the mass market. Barriers to entry are therefore high, and auto manufacturers with economies of scale can boast strong economic moats. However, this doesn’t insulate them from new entrants, as electric vehicles (EVs) have entered the market and are upending it. This has forced established manufacturers to not only contend with emerging EV-first competitors but also decide how much they want to invest in these disruptive technologies, which will likely cannibalize their legacy offerings.
The 10 automobile manufacturing stocks we track reported a mixed Q2. As a group, revenues beat analysts’ consensus estimates by 1.8%.
While some automobile manufacturing stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 4.7% since the latest earnings results.
Best Q2: Rivian (NASDAQ:RIVN)
The manufacturer of Amazon’s delivery trucks, Rivian (NASDAQ:RIVN) designs, manufactures, and sells electric vehicles and commercial delivery vans.
Rivian reported revenues of $1.66 billion, up 27.2% year on year. This print exceeded analysts’ expectations by 7.9%. Overall, it was an incredible quarter for the company with an impressive beat of analysts’ EBITDA estimates and full-year EBITDA guidance exceeding analysts’ expectations.
RJ Scaringe, Rivian Founder and CEO, said: “This quarter we began external deliveries of R2. I believe R2 will be a game changer for our customers and a driver of Rivian’s long-term growth and profitability. This quarter we also hosted over 57,000 demo drives, a Rivian record. The U.S. automotive marketplace is starved for high-quality EV choice, and I believe R2 is an attractively priced option for everyday adventures that will resonate with a broad set of consumers.”
Rivian achieved the biggest analyst estimate beat in the group. Investor expectations, however, were likely higher than Wall Street’s published projections, leaving some wishing for even better results (analysts’ consensus estimates are those published by big banks and advisory firms, not the investors who make buy and sell decisions). The stock is down 11.9% since reporting and currently trades at $14.82.
We think Rivian is a good business, but is it a buy today? Read our full report here, it’s free.
