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RIVN or LCID: Which Stock is Better Positioned Pre-Q4 Earnings?
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The electric vehicle (EV) industry is currently at crossroads. Though e-mobility is the future, President Trump’s unfriendly stance on EVs, along with slower-than-expected adoption due to high pricing, presents challenges. In this scenario, let’s see how California-based EV startups Rivian Automotive (RIVN - Free Report) and Lucid Group (LCID - Free Report) are placed now. With RIVN reporting fourth-quarter 2024 results today and LCID next Tuesday, are either of these stocks worth buying ahead of their releases?
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
Q4 Expectations for RIVN
The Zacks Consensus Estimate for RIVN’s loss per share in the to-be-reported quarter is pegged at 66 cents, narrower than $1.36 incurred in the year-ago period. The loss estimate has also narrowed by a cent over the past 30 days. The consensus mark for revenues is $1.43 billion, implying an uptick of 8.5% year over year.
Our proven model predicts an earnings beat for Rivian in the quarter-to-be-reported. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That’s the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Rivian’s fourth-quarter deliveries of 14,183 units surpassed Wall Street estimates and also rose from 3,972 units in the fourth quarter of 2023. Higher deliveries are expected to boost revenues. Rivian’s efforts to improve its cost structure through manufacturing adjustments also bode well. Encouragingly, the company expects to achieve a modest positive gross margin in the quarter to be reported.
In the trailing four quarters, Rivian missed EPS estimates thrice and beat on the other, with the average negative earnings surprise being 7.47%.
The Zacks Consensus Estimate for LCID’s loss per share in the to-be-reported quarter is pegged at 26 cents, narrower than 29 cents incurred in the year-ago period. The loss estimate has remained unchanged over the past 90 days. The consensus mark for revenues is $225.5 million, implying an uptick of 43.4% year over year.
Our proven model doesn’t conclusively predict an earnings beat for Lucid in the quarter to be reported. LCID has an Earnings ESP of +3.85% and a Zacks Rank #4 (Sell).
Lucid sold a record 3,099 vehicles in the December quarter, up 79% on a yearly basis and 11.4% on a sequential basis, which is likely to have driven revenues in the to-be-reported quarter. However, the company’s research and development costs and its selling, general and administrative expenses are likely to have increased, thus putting pressure on the bottom line.
In the trailing four quarters, Lucid missed EPS estimates on all occasions, with the average negative earnings surprise being 14.78%.
While both stocks underperformed the sector and the S&P 500, Rivian shares have risen 6.5% in the past six months, while Lucid lost 6%.
6-Month Price Performance Comparison
Image Source: Zacks Investment Research
At their current levels, Rivian trades at 2.65X forward sales, which is a pleasant discount to Lucid’s 6.5X, although both are at premiums to the auto sector’s 1.48X.
Image Source: Zacks Investment Research
How to Play RIVN & LCID Now
Rivian has overcome last year’s production and supply chain hurdles. With component shortages largely resolved, the company is deepening its focus on cost efficiencies, which should help improve the bottom line. Notably, material costs for its R1 lineup are expected to drop by 20% in 2025, while the upcoming R2 models could see a 45% cost reduction. Rivian’s partnership with Volkswagen (VWAGY - Free Report) is another strong catalyst, alongside the expansion of its product lineup with the R2, R3, and R3X models. However, like many EV startups, Rivian continues to burn cash, which remains a concern.
Lucid, on the other hand, is betting big on its upcoming Gravity model. It benefits from strong financial backing, with Saudi Arabia’s Public Investment Fund (PIF) injecting $8.9 billion since 2018. However, these capital raises come at the cost of significant shareholder dilution, posing a key risk. While Lucid has taken steps to control costs, its high cash burn necessitates continued external funding, making its financial stability a major concern.
From a valuation perspective, Rivian holds the upper hand and has a better near-term outlook. Overall, it appears to be in a stronger position with a clearer path to cost reduction and profitability. Investors will be watching whether the company manages to meet its target of achieving gross profit in the fourth quarter of 2024. For now, existing shareholders should hold Rivian, while potential investors may want to wait for more clarity on execution. In contrast, Lucid's financial struggles and ongoing dilution make it a riskier bet. Until there is clearer improvement in fundamentals, Lucid stock is best avoided.
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RIVN or LCID: Which Stock is Better Positioned Pre-Q4 Earnings?
The electric vehicle (EV) industry is currently at crossroads. Though e-mobility is the future, President Trump’s unfriendly stance on EVs, along with slower-than-expected adoption due to high pricing, presents challenges. In this scenario, let’s see how California-based EV startups Rivian Automotive (RIVN - Free Report) and Lucid Group (LCID - Free Report) are placed now. With RIVN reporting fourth-quarter 2024 results today and LCID next Tuesday, are either of these stocks worth buying ahead of their releases?
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
Q4 Expectations for RIVN
The Zacks Consensus Estimate for RIVN’s loss per share in the to-be-reported quarter is pegged at 66 cents, narrower than $1.36 incurred in the year-ago period. The loss estimate has also narrowed by a cent over the past 30 days. The consensus mark for revenues is $1.43 billion, implying an uptick of 8.5% year over year.
Our proven model predicts an earnings beat for Rivian in the quarter-to-be-reported. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That’s the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
RIVN has an Earnings ESP of +3.54% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Rivian’s fourth-quarter deliveries of 14,183 units surpassed Wall Street estimates and also rose from 3,972 units in the fourth quarter of 2023. Higher deliveries are expected to boost revenues. Rivian’s efforts to improve its cost structure through manufacturing adjustments also bode well. Encouragingly, the company expects to achieve a modest positive gross margin in the quarter to be reported.
In the trailing four quarters, Rivian missed EPS estimates thrice and beat on the other, with the average negative earnings surprise being 7.47%.
Rivian Automotive, Inc. Price and EPS Surprise
Rivian Automotive, Inc. price-eps-surprise | Rivian Automotive, Inc. Quote
Q4 Expectations for LCID
The Zacks Consensus Estimate for LCID’s loss per share in the to-be-reported quarter is pegged at 26 cents, narrower than 29 cents incurred in the year-ago period. The loss estimate has remained unchanged over the past 90 days. The consensus mark for revenues is $225.5 million, implying an uptick of 43.4% year over year.
Our proven model doesn’t conclusively predict an earnings beat for Lucid in the quarter to be reported. LCID has an Earnings ESP of +3.85% and a Zacks Rank #4 (Sell).
Lucid sold a record 3,099 vehicles in the December quarter, up 79% on a yearly basis and 11.4% on a sequential basis, which is likely to have driven revenues in the to-be-reported quarter. However, the company’s research and development costs and its selling, general and administrative expenses are likely to have increased, thus putting pressure on the bottom line.
In the trailing four quarters, Lucid missed EPS estimates on all occasions, with the average negative earnings surprise being 14.78%.
Lucid Group, Inc. Price and EPS Surprise
Lucid Group, Inc. price-eps-surprise | Lucid Group, Inc. Quote
Performance & Valuation Comparison
While both stocks underperformed the sector and the S&P 500, Rivian shares have risen 6.5% in the past six months, while Lucid lost 6%.
6-Month Price Performance Comparison
Image Source: Zacks Investment Research
At their current levels, Rivian trades at 2.65X forward sales, which is a pleasant discount to Lucid’s 6.5X, although both are at premiums to the auto sector’s 1.48X.
Image Source: Zacks Investment Research
How to Play RIVN & LCID Now
Rivian has overcome last year’s production and supply chain hurdles. With component shortages largely resolved, the company is deepening its focus on cost efficiencies, which should help improve the bottom line. Notably, material costs for its R1 lineup are expected to drop by 20% in 2025, while the upcoming R2 models could see a 45% cost reduction. Rivian’s partnership with Volkswagen (VWAGY - Free Report) is another strong catalyst, alongside the expansion of its product lineup with the R2, R3, and R3X models. However, like many EV startups, Rivian continues to burn cash, which remains a concern.
Lucid, on the other hand, is betting big on its upcoming Gravity model. It benefits from strong financial backing, with Saudi Arabia’s Public Investment Fund (PIF) injecting $8.9 billion since 2018. However, these capital raises come at the cost of significant shareholder dilution, posing a key risk. While Lucid has taken steps to control costs, its high cash burn necessitates continued external funding, making its financial stability a major concern.
From a valuation perspective, Rivian holds the upper hand and has a better near-term outlook. Overall, it appears to be in a stronger position with a clearer path to cost reduction and profitability. Investors will be watching whether the company manages to meet its target of achieving gross profit in the fourth quarter of 2024. For now, existing shareholders should hold Rivian, while potential investors may want to wait for more clarity on execution. In contrast, Lucid's financial struggles and ongoing dilution make it a riskier bet. Until there is clearer improvement in fundamentals, Lucid stock is best avoided.