Needham reiterated a Buy rating and $25.00 price target on Rivian Automotive , Inc. (NASDAQ:RIVN) after surveying R1T inventory and updating their Used Vehicle Price Tracker.
“Our confidence in R1T demand increases as both the R1T and the R1S continue to outperform in our data.” Wrote Needham analysts.
Needham holds an optimistic view on RIVN's Q4 data, highlighting the company's notable progress in sequential production as a significant sign of its manufacturing growth. This development has helped alleviate some concerns about the shutdowns in the '24 R1 production line.
Additionally, deliveries have surpassed Needham's expectations. They anticipate that the significant gap between production and deliveries will push up the consensus Q124 delivery estimate. This could potentially drive the stock's performance in the first half of the year, shifting focus away from the current emphasis on 2H gross margin.
However, Needham's primary concern regarding RIVN revolves around how R1T inventories are representative of demand. After checking RIVN's inventory in late December and early January, they found approximately 600 available R1T units. Based on past registration numbers, they estimate RIVN delivers around 20 vehicles per day, indicating a 30-day supply of R1T inventory. This places RIVN ahead of other car manufacturers in terms of supply days, even before considering R1S supply constraints.
Shares of RIVN are up 0.05% in pre-market trading on Tuesday.