RIVN: Can Rivian Stock Touch $75 Next Year?
Shares of electric vehicle (EV)
manufacturer Rivian Automotive (NASDAQ:
RIVN) have burnt massive investor wealth in 2022. RIVN
stock went public last November and touched a record high of $179.
ItU+02019s currently trading at $40, which is 77% below all-time
Let’s see if Rivian stock price
can move higher in the coming months and outpace the broader
markets going forward.
The bull case for Rivian stock
Rivian is backed by stalwarts
such as Amazon (NASDAQ:
AMZN) and Ford (NYSE:
F). Amazon, in fact, has
a 20% stake in Rivian and has pre-ordered 100,000 EVs, which will
be delivered through 2030. Rivian continues to expand its
partnerships and just inked a deal with Mercedes-Benz Group
to manufacture large electric vans
The joint venture between the two
will allow the automobile manufacturers to share costs and scale
operations at a sustainable rate. It is, without doubt, a
big-ticket deal for Rivian, which is still trying to gain a
foothold in the rapidly expanding EV market.
Rivian and Mercedes will
reportedly share factory space at an unspecified plant in Europe
which the latter already owns. They will build two electric vans.
One van will be based on Mercedes’ electric van architecture, while
the other will be called the Rivian Light Van.
According to Rivian’s press
release, the two companies will “leverage shared investments,
shared costs and will pursue operational synergies to rapidly scale
electric van production.”
The electric van market is
forecast to touch $22 billion in 2027, up from just $2.7 billion in
2022, unlocking the potential for Rivian to drive sales
significantly higher in the upcoming decade.
Analysts expect Rivian to
accelerate sales at a stellar pace while driving costs lower (as a
percentage of revenue) and generate stable cash flows similar to
what is achieved by market leader Tesla
In Q2, Rivian delivered 4,467
vehicles, up from just 1,227 vehicles in the March quarter. The
company ended Q2 with a pre-order backlog of 98,000 units.
Additionally, Rivian’s manufacturing unit in Illinois already has
the capacity to produce 150,000 vehicles each year.
The bear case for RIVN stock
While Rivian is forecast to
increase sales from $1.85 billion in 2022 to $6.45 billion in 2023,
it will remain unprofitable in the foreseeable future. Rivian needs
to focus on lowering its cost base amid a challenging
macro-environment. In the past few months, Rivian and several EV
peers had to wrestle with supply chain shortages, rising commodity
prices, and higher interest rates.
In Q2 of 2022, Rivian posted a
net loss of a whopping $1.7 billion, compared to a net loss of $580
million in the year-ago period. Between 2021 and 2023, analysts
expect Rivian to report a cumulative net loss of $12.6 per share,
indicating an adjusted loss of over $11 billion.
Yes, Rivian ended the June
quarter with almost $15 billion in cash, but it will have to start
generating positive cash flows by the second half of 2024 or raise
additional capital in the form of equity or debt.
Due to supply chain disruptions,
lowered production goals
which lowered revenue forecasts for
the next 12 months.
RIVN stock is trading at a market cap of $34 billion,
valuing the company at 18.4x forward sales, which is quite steep
for a loss-making entity.
Rivian is a high-risk,
high-reward stock, as a lot can go wrong before it manages to post
a consistent profit. Alternatively, the backing from Amazon, a
strong order book, and the global shift towards EVs make it an
ideal bet for the high-risk investor.
Analysts tracking RIVN stock have
a price target of $53, indicating an upside of 30% in the next
Graphique Historique de l'Action
De Nov 2022 à Déc 2022
Graphique Historique de l'Action
De Déc 2021 à Déc 2022