Is Rivian stock a screaming buy after new model launch?

For the first time in a long time, investors were excited about the prospects of electric vehicle manufacturers. rivian‘S (RIVN 13.42%) In stock on Thursday. It introduced not one, not two, but three new models, and also gained strength from researchers’ new purchase recommendations. However, Rivian is still suffering from an overall slowdown in EV sales growth and remains very unprofitable. Perhaps investors should temper their enthusiasm.

New models and new analyst coverage

The three models unveiled on this day are expected to capture the hearts of enthusiasts with their future-oriented, sophisticated feel and the company’s unique styling. But since it doesn’t stray too far from the EV maker’s basic R1T pickup and R1S SUV, I’m concerned that the company may not expand its consumer base with the new vehicle.

There are greater concerns about Rivian’s operations. Launch of new model and initiation of favorable stock coverage (provided by veteran investment bank) Jeffries) Of course it was encouraging. Still, they don’t properly address the bad news sprinkled throughout Rivian’s latest earnings report.

It’s true that sales have almost doubled, but that’s to be expected for a young company in an industry that was hot until very recently. Rivian is still losing money. Non-GAAP (adjusted) net loss for the period was a notable $1.31 billion, an improvement of more than 20% compared to the same quarter in 2022. Alternatively, Rivian habitually and consistently loses billions of dollars.

Weak production guidance is a concern

As any smart investor knows, stocks trade on their future potential, not on their performance. Considering that old saw, the Rivian doesn’t look that sexy. Despite the new hardware, total production this year (57,000 units) is showing essentially flat annual growth, well below 2023’s 135% increase.

So it’s unlikely that Rivian will have a successful year in 2024, and it would have to do well to kick its loss-making habits. To me, the stock is a long-term play at best, and given the current situation, there’s a good chance it’s a pass.