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Investment Opportunities

Rivian Stock: Is it a Buy Right Now?

Rivian stock has many electric enthusiasts excited. This excitement is the result of not only its great-looking vehicles, but more importantly for the American market. Rivian is producing a pickup and an SUV. Deliveries will begin as early as this month.

In a market that has long had only sedan and hatchback-style EVs, Rivian could be key in helping EVs go mainstream. And if Rivian vehicles sell in numbers that match the hype, then Rivian stock could be a big opportunity for investors.

But buying stock solely on some hype is seldom a good idea. In this article, we will take a look at Rivian stock and see whether it’s a buy.

Rivian stock could be a big opportunity for investors.

What is Rivian?

Rivian (Nasdaq: RIVN) is an electric vehicle manufacturer founded in 2009 and its headquarters is located in Irvine, California. Currently, its R1S and R1T are available for preorder and configuration; the lower-priced R1T starts at $67,500.

Rivian produces its vehicles using a “skateboard” platform. It has been dubbed this because it quite literally looks like a skateboard. Perhaps more importantly, the skateboard platform can be used not only to produce future Rivian vehicles; it can also be used by other automakers. Thus, the skateboard platform may be a future source of revenue.

Ford intended to use the skateboard platform for its upcoming electric vehicle, and ended up moving in a different direction last year. Nevertheless, Rivian stock remains a compelling option for new and legacy automakers who are not too keen on reinventing the wheel.

Rivian Stock Price Prediction

We are still in the early stages of Rivian stock, as its public debut was on November 10, 2020. If things go well for Rivian, those who invest now could be rewarded handsomely. That said, Rivian’s share price has been a bit chaotic since its IPO.

To illustrate, the company’s public debut resulted with a share price of $78, eventually doubling to $172 per share. Since then, Rivian stock has cooled, though it remains well about its IPO price. For now, analysis on Rivian stock is limited. However, analysis from large firms should start to arrive in early December. This will bring more clarity to the bigger picture in terms of both Rivian the company and its stock.

Still, it’s tough to predict Rivian’s stock price due to deliveries starting later this month. This will be something to watch as deliveries of Launch Edition vehicles are expected to begin in November 2021 and other trims starting in January 2022. It’s worth noting that Rivian is no stranger to delayed deliveries.

But if Rivian makes good on its promise this time, it’s likely that its share price will get a boost as this would be a very encouraging sign for investors. Plus, in a U.S. market dominated by pickups and SUVs, there is a huge opportunity for EV makers who can captivate the minds of those loyal to this style of vehicle.

Quarterly Financials

This is the dark part of the story for Rivian. Or, at least, one that isn’t very rosy for prospective investors. If we simply look at its most recent earnings report, things look a bit gloomy for Rivian stock. For example, despite having a market cap of nearly $115 billion, Rivian has yet to post revenue for Q2 2021.

But that doesn’t tell the whole story: as of September 30, 2021, Rivian has received 48,390 preorders, according to a Fox Business report. Even with the base price of $67,500, that is over $3 billion in potential revenue. And, of course, most of these vehicles are not going to ship with the base configuration.

With that context, we can feel a little better about its posted -$580 million in net income. The same can be said for its diluted earnings per share (EPS) of -5.74. Plus, its net change in cash was $423 million; an increase from its -$375 million figure last year.

Investor Sentiment

Investor sentiment around Rivian stock is neutral at the moment, which we can expect until deliveries begin. Other than delays, there simply isn’t anything against which we can judge Rivian. We see that neutral sentiment in the short, mid and long term. As things continue to develop further, it’s likely investor sentiment will be more indicative of how Rivian is doing.

Is Rivian Stock a Buy?

If you are wondering whether Rivian stock is a buy, the answer may only be “yes” for the most energetic of Rivian enthusiasts. But because deliveries are set for later this month, it may be best to wait a little while. Given the uncertainty that remains, it’s no surprise to see that Rivian stock has fluctuated quite a bit since its IPO.

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Rivian may be promising, but questions will remain until deliveries begin. Until then, we will continue to keep an eye out as those holding Launch Edition reservations eagerly await their special interior badging and exclusive paint color.


About

Bob Haegele is a personal finance writer who specializes in investing and planning for retirement. His hefty student loan burden inspired him to pay off his loans, and now he’s helping others get their finances in order. When he’s not writing, he enjoys travel and live music.

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