Rivian Stock: Beaten-Down EV Stock Could Soar 425%+

RIVN Stock Poised to Quintuple?

When it comes to brand identity, specifications, and price, one of the best electric vehicle (EV) companies is Rivian Automotive Inc (NASDAQ:RIVN). And in its recent letters to shareholders, the company has given long-suffering investors reasons to celebrate.

That’s a nice change for shareholders who’ve watched Rivian stock trend steadily lower since Rivian Automotive Inc went public in November 2021. As of this writing, RIVN stock is down by:

  • One percent over the last month
  • 32% over the last three months
  • 75% over the last six months
  • 72% year-to-date

Despite that bloodshed, most of the Wall Street analysts who watch Rivian Automotive Inc have bullish near-term outlooks for Rivian stock. They’ve given RIVN stock an average rating of “outperform” and have set 12-month share-price targets ranging from $24.00 to $147.00, which points to potential returns ranging from a loss of 13% to gains of 427%.

Chart courtesy of StockCharts.com

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About Rivian Automotive Inc

Rivian is an EV company that designs, develops, and manufactures vehicles and accessories. The company’s EVs include pickup trucks, sport utility vehicles (SUVs), and delivery vans.

The company’s “R1” line features a pickup truck and an SUV, both of which can go from zero to 60 miles per hour in three seconds. The R1 vehicles include “Driver+,” an advanced driver assistance system. (Source: “R1T” and “R1S,” Rivian Automotive Inc, last accessed June 10, 2022.)

Rivian Automotive Inc’s “R1T,” which is one of the first electric pickup trucks on the market, can tow up to 11,000 pounds. MotorTrend named the R1T its 2022 “Truck of the Year.” (Source: “The Rivian R1T Is the 2022 MotorTrend Truck of the Year,” MotorTrend, December 13, 2021.)

The R1T’s starting price is $67,500, but Sandy Munro, a former Ford Motor Company (NYSE:F) manufacturing engineer, says it’s “way underpriced for what it is and what it does.” (Source: “Sandy Munro Says Rivian R1T ‘Way Underpriced,’ Should Cost $100K,” InsideEVs, June 6, 2022.)

The “R1S,” which Rivian Automotive Inc describes as the world’s first “electric adventure vehicle,” has a towing capacity of 7,700 pounds. Its starting price is $72,500. The first R1S deliveries are expected this summer.

Rivian’s electric delivery van, “EDV,” is a commercial vehicle that was developed in collaboration with Amazon.com, Inc. (NASDAQ:AMZN).

Key Takeaways From Rivian’s Letters to Shareholders

Subsequent to the end of the first quarter of 2022, Rivian Automotive Inc held its first annual meeting since going public and released two letters to shareholders.

The June 6 letter said that, over the course of the previous year, the company launched its three flagship vehicles and its direct-to-customer delivery and service operations, which are critical for its consumer and commercial business. (Source: “Letter to Shareholders,” Rivian Automotive Inc, June 6, 2022.) 

During the first quarter of 2022, Rivian delivered 1,227 EVs, generating $95.0 million in revenue. This brought the company’s total number of EV deliveries to 2,148. Rivian has produced about 5,000 vehicles. (Source: “Q1 2022 Shareholder Letter,” Rivian Automotive Inc, May 11, 2022.)

Rivian reported a first-quarter 2022 net loss of $1.6 billion and an adjusted earnings loss of $1.1 billion.

Rivian Automotive Inc ended the first quarter of 2022 with $17.0 billion in cash. This year, the company expects to spend more than $7.0 billion on capital and operating costs. It has enough liquidity to fund its operations through 2025, which includes the launch of its second vehicle line, “R2.”

Management said one of the biggest areas of change over the coming decade will be the demand for batteries, with the global production capacity projected to expand by more than 20 times.

To ensure that Rivian Automotive Inc isn’t caught in the crosshairs of a supply chain crunch, the company has been building partnerships with cell providers and other strategic companies in the battery supply chain.

Maximizing its production is the key to Rivian’s long-term success. The company has built a fully operational production facility in Normal, IL with an annual production capacity of 150,000 units. In 2022, it expects to ship 25,000 units.

The demand for the company’s EVs is high. Rivian Automotive Inc has more than 90,000 reservations for its R1T and R1S vehicles and an initial order from Amazon of 100,000 EDVs.

Analysts don’t think the company will produce more than 100,000 vehicles per year until 2024, though. Coincidentally, that’s the year Rivian Automotive Inc is projected to report annual positive gross profits.

Analyst Take

Rivian stockholders have had a rough go of it since the company went public in 2021. But it appears as though the company has turned a corner.

Rivian Automotive Inc has launched its flagship vehicles, it has a large order backlog, its manufacturing plant has an annual production capacity of 150,000 units, and it’s sitting on $17.0 billion in cash—which is more than enough for the company to be able to launch its second vehicle line, the R2, in 2025.