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Rivian's Rebound: Should This EV Stock Be on Your Radar?
RIVNRivian Automotive(RIVN) MarketBeat·2024-12-27 12:01

Stock Performance - Rivian shares have returned 34% in the past month but are still down 41% year-to-date, trading at just over 14[2]−Shareshavebeenvolatilein2024,startingabove14 [2] - Shares have been volatile in 2024, starting above 23, dropping below 9inApril,risingabove9 in April, rising above 18 in July, and falling under 10inNovemberbeforerisingagain[1]ProductionandDeliveryChallenges−Riviandeliveredjustover10,000carsinQ32024,a3610 in November before rising again [1] Production and Delivery Challenges - Rivian delivered just over 10,000 cars in Q3 2024, a 36% drop from Q3 2023 and the lowest figure since Q2 2023 [3] - Vehicle production in Q3 2024 was down 19% compared to the same quarter in 2023, primarily due to significant supply chain issues [3] Financial Performance and Profitability - Rivian's normalized net income margin over the last 12 months is -76%, highlighting the challenge of achieving profitability [4] - The company projects a positive gross margin in Q4 2024, driven by a 20% reduction in material costs compared to Q1 2024 [6] - Rivian plans to sell regulatory credits to achieve gross margin positivity by 2025 [7] Strategic Initiatives and Partnerships - Rivian has established a 5.8 billion joint venture with Volkswagen, which will use Rivian's software in its upcoming EVs [5] - The company expects a 45% reduction in material costs for its R2 model, set to launch in 2026, with a projected selling price of 45,000[8]−ThelowerpricepointoftheR2modelmayattractmorebuyers,potentiallyincreasingeconomiesofscaleandprofitability[8]MarketPositionandGrowthPotential−Rivian′ssalesaredecliningwhiletheoverallU.S.EVmarketgrewby1145,000 [8] - The lower price point of the R2 model may attract more buyers, potentially increasing economies of scale and profitability [8] Market Position and Growth Potential - Rivian's sales are declining while the overall U.S. EV market grew by 11% in Q3 2024, reaching a record size [10] - The company's partnership with Volkswagen provides significant cash and confidence, but its path to long-term profitability remains uncertain [9][10] Analyst Sentiment - The average Wall Street price target for Rivian is 15.74, implying a 12% upside from the current price [9] - Rivian currently holds a "Hold" rating among analysts, with some top-rated analysts suggesting other stocks as better buys [12]