Needham reiterated a Buy rating on Rivian Automotive (NASDAQ: RIVN ) with a 12-month price target of $31.00 after performing a used vehicle marketplace check.
According to the checks, Rivian's used market is looking stronger compared to its only rival in the electric pickup game. The transaction data also reveals steady pricing for used vehicles, boosting confidence in owner satisfaction and vehicle demand, and the path towards Needham’s above-consensus 2027 adjusted EBITDA estimate.
Analysts wrote in a note, “We track used vehicle listings on cargurus.com as a measure of demand, and we were encouraged to hear RIVN management mirror our focus on used vehicle residual values as a way to measure demand on the Q2 earnings call.”
According to the data pulled There are fewer used RIVN R1T pick-up trucks listed for sale vs. Ford (NYSE: F ) F150 Lightning vehicles despite a higher number of RIVN unit sales. Furthermore, the data shows longer-seasoned R1T pick-up truck prices have held steady in recent months, with secondary market R1S SUV prices still holding firm compared to the new R1S prices.
“RIVN has spoken to a reservation backlog that takes it through '24, with RIVN vehicles making it to the secondary market in lower numbers vs peers and holding their value better, an indicator of strong secondary market demand matching strong primary market demand,” wrote analysts.
Needham lowered 2024 vehicle delivery estimates to better account for planned downtime on the R1 production line next year, but are still 10%+ ahead of consensus.
“Our longer term estimates that drive our valuation are largely unchanged, and our confidence in our estimates moves higher.” added analysts.
Shares of RIVN are down 2.78% in morning trading on Thursday.
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