Rivian stock price has risen in the past five consecutive days and is hovering at its highest level since August 8 of this year. It has soared by 52% from its lowest level in November, pushing its valuation to over $14.7 billion.
Rivian stock jumps after key upgrade
RIVN shares jumped to a high of $14.9 on Monday after a Benchmark analyst upgraded the company to a buy. In a note, he cited the fact that the company has continued to see more demand this year.
The analyst also noted that the company’s commercial business was doing well, and that it will continue providing cash to support the other segment.
Rivian’s commercial business manufactures vehicles that are used by companies like Amazon for their deliveries. It ended its exclusivity with Amazon in 2023, meaning that it can now sell the vehicles to other clients.
Other analysts are largely muted on Rivian, with Goldman Sachs and Mizuho having a neutral rating. Stifel, RBC, WebBush, and Piper Sandler have a buy rating. The average Rivian stock forecast among analysts is $15, a few points above the current $14.45.
Concerns about RIVN remains
Rivian stock has collapsed from its all-time high as concerns about its business have remained. While its vehicle sales have risen, the company has continued to make substantial losses. In most periods, it losses thousands of dollars for each vehicle it sells.
The most recent results showed that its revenue dropped from $1.3 billion in Q3’23 to $874 million. This decline happened as the company delivered 10,018 vehicles, a big drop from the 15,564 it sold in the same period last year.
These numbers showed that demand for its vehicles has softened as customers have embraced hybrid vehicles.
Rivian’s gross loss was over $393 million, while its net loss narrowed to over $1.1 billion.
The company hopes to sell between 50,000 and 52,000 vehicles this year and turn a positive gross profit this quarter.
Rivian has also made progress in the past few months. The most notable one was raising about $5 billion from Volkswagen, the biggest German automaker. The two formed a joint venture that will be used to develop technologies for their vehicles.
Read more: Rivian soars 13% on Monday after double dose of good news
RIVN has made progress
Rivian has also made progress in building R2, its more affordable vehicle that will go into production in 2026. Analysts believe that the R2 will be a more popular vehicle since it will start at $45,000.
Historically, EV companies have started their businesses selling more expensive vehicles and then using the cash to fund cheaper versions.
Rivian R2 will have an estimated range of over 300 miles and have a sitting capacity of 5 seats.
The management believes that the cash in its balance sheet, together with the recently funding from VW, will be enough to see it through the launch of R2.
The challenge, however, will be how to ensure that there is strong demand for its vehicles as competition in the industry rises.
Rivian stock price analysis
RIVN stock chart by TradingView
The weekly chart shows that the RIVN share price has remained in a consolidation phase in the past few years. It has found a strong support at $8.85, where it failed to move below several times since April this year.
This performance mirrors that of most altcoins like Cardano and Shiba Inu, which bottomed in 2022 and then rebounded this year.
Therefore, there is a likelihood that the Rivian stock price will have a strong bullish breakout in the next few months. This rebound will be confirmed if it rises above the descending trendline that connects the highest swings in September 2022.
If this happens, the next point to watch will be at $27.82, its highest level in July 2023. A break above that level will point to more gains, potentially to $40.47, the highest level in August 2022.
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