24/7 Insights

• Wall Street expectations for where Rivian Automotive Inc. (NASDAQ: RIVN) stock is headed vary considerably.
• Shares of the EV maker got a boost recently, and some analysts see lots of room for them to run.

Some analysts warn that Rivian Automotive Inc. (NASDAQ: RIVN) stock is a trap, but others see huge prospects for the electric vehicle (EV) maker and its stock. This is especially so since the company recently secured a huge deal. Opinions about it vary greatly, so shareholders and would-be investors must be wondering where the share price will be in the next year.

Why Invest in Rivian?

Since going public in 2021, Rivian stock is down more than 86%. The automotive technology and outdoor recreation company is known for its “skateboard” platform that can support a variety of vehicles or be adopted by other companies. Its sport utility vehicles (SUVs) and pickups offer unique features focused on the outdoors. Consumer Reports found that Rivian owners were the most satisfied drivers. Should the stock be doing better? Are investors who buy in now getting a stellar stock at a bargain?

Rivian, the Company

The company designs, develops, manufactures, and sells EVs and accessories. Its consumer vehicles include a two-row, five-passenger pickup truck under the R1T brand and a three-row, seven-passenger SUV under the R1S name. Rivian also provides consumer services, such as digital financing and leasing, telematics-based insurance, vehicle maintenance and repair services, software services, and charging solutions.

Furthermore, Rivian also designs, develops, manufactures, and operates its Adventure Network Direct Current fast chargers and offers access to Combined Charging Standard, as well as FleetOS, a proprietary, end-to-end centralized fleet management subscription platform. The company also offers Rivian Commercial Van platform for Electric Delivery Van with collaboration with Amazon.com Inc. (NASDAQ: AMZN). It sells its products directly to customers in the consumer and commercial markets.

Rivian is based in Irvine, California. It was founded in 2009 by engineer and entrepreneur Robert Scaringe, and it went public in late 2021. Competitors include Lucid Group Inc. (NASDAQ: LCID), Nikola Corp. (NASDAQ: NKLA), and Tesla Inc. (NASDAQ: TSLA).

The company recently inked a $5 billion deal with Volkswagen, which some have seen as a lifeline. Deliveries in the second quarter topped company expectations as well. Meanwhile, first-quarter results were mixed, and the company’s chief accounting officer recently resigned. Yet, the stock just got a boost from a target price increase.

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Rivian, the Stock

Even though the stock has popped almost 64% in the past month, it is still down about 24% since the beginning of the year. The Nasdaq is up about 24% year over year. Note that the $18.09 consensus price target is also lower than where shares changed hands at the start of the year.

Out of 28 analysts who cover the stock, 15 recommend buying shares, six of them with a Strong Buy rating. Canaccord Genuity and Cantor Fitzgerald recently reiterated Buy-equivalent ratings. More than 45% of shares are held by institutional investors, including notable stakes at Amazon, Vanguard, and T. Rowe Price. Note that CEO Scaringe recently shed more than a million dollars worth of shares.

Wall Street expectations vary for where the stock heads in the next 52 weeks. While some analysts clearly lack faith in the company, others see huge upside potential. Even the consensus target signals further upside after the recent run. Strong second-quarter numbers in the August 6 report could prompt price target hikes, which would mean additional upside potential.

Low target	$10.00	−43.8%
Mean target	$18.09	6.2%
High target	$36.00	102.2%

One of Rivian’s biggest challenges is intense competition in the industry. The major automakers have invested billions and are now releasing EVs of their own, and despite some failures, EV startups still abound. Even market leader Tesla has found its market share slipping, recently dropping below 50%. Rivian has lost billions of dollars in recent years, which is why the deal with Volkswagen is so important.

The company has some more space now to effect a turnaround. Rivian has plenty of work to do to get its costs under control and move toward profitability. Yet, analysts on average anticipate the stock has some room to run.

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