Is Rivian ready for a comeback? Stock forecast for the next 12 months
Rivian is a hot electric car stock that has been falling steadily since its IPO. But the company’s new financial report has analysts speculating that the worst may be behind Rivian. Let’s try to examine if this is the time when we can invest in stocks on the lows and achieve success.
Rivian is a California-based company that produces futuristic electric vehicles – imagine watching a movie released in 2000, circa 2033. The company went public in 2021 and its stock rose sharply right after the IPO. But then a series of unfortunate events took place.
You could say that times are tough for all markets right now. But comparing Rivian stocks with the S&P 500 index is better. We clearly see – this is a problem with Rivian and not just general models. Also, you should remember that many factors influence Rivian as well as other assets. In order to predict future market movements, you can use the economic calendar. It will show you all the most important economic events.
Rivian’s earnings report for the first quarter of 2023 generated positive investor sentiment. Overall, corporate results are still far from a fairy tale, but several key indicators turned out to be better than expected. That’s why the stock rose about 10%, although after that it adjusted to lower levels than before the report.
First, the electric vehicle maker posted a better loss per share (yes, loss, not profit) — that’s $1.25 versus an estimate of $1.59. Additionally, Rivian’s first-quarter revenue simultaneously exceeded expectations ($661 million vs. $652.1 million) and increased nearly $100 million from the first quarter of 2022.
Second, Rivian’s results turned out to be better than those of participants like Lucid, Fisler and Nicola. Consequently, Rivian may now rank higher in the eyes of investors.
Third – and this is a big deal – the company hasn’t changed its plans to have 50,000 electric vehicles manufactured by the end of 2023. This means Rivian will produce more than double the vehicles compared to 2022.
Among the other pluses, we can highlight the continuation of the partnership with Amazon (AMZN action) and the reduction of costs through the layoff of 900 employees (the latter is positive for the balance sheet but also demonstrates that the company is still far from its peak performance).
The other fact that we must pay attention to is their bet on expensive models of electric vehicles. On the one hand, it can generate more profit, but on the other hand, customers can make a choice in favor of other manufacturers.
Consensus forecasts prove that most analysts believe in Rivian stock. It says the stock has a “Buy” rating and could rise 77% over the next 12 months. It may sound like an offer you can’t refuse, but you have to remember that the stock has likely had the same outlook at many stages of its downfall. This is why you should do your own thorough analysis before trading in any market.