Rivian Cars Today
Rivian Cars
As of 05:45 PM ET
- 52 week range
- $8.26
▼
$20.30
- Price target
- $15.74
Rivian Automotive Company Nasdaq: Raven The stock rose more than 15% in the morning after the company reported fourth-quarter deliveries that came in well above analyst estimates.
Better yet, the electric vehicle (EV) manufacturer announced that it is no longer experiencing a component shortage that has been limiting production of select models.
The company announced deliveries of a total of 14,183 vehicles for the three months ending December 31, 2024. Here’s some context on those numbers:
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It came in at a historically lighter quarter as Rivian’s largest customer, Amazon.com Inc Nasdaq: AMZN Deliveries are usually curtailed.
Rivian first reported component shortages with its third-quarter delivery numbers in October. The shortage affected parts the company used in its R1 SUVs, R1T pickup trucks and delivery vans.
At the time, the company cut its annual production target, and RIVN stock, which was trading at about $18.11 in July 2024, had nearly halved by the beginning of November.
However, with this major constraint on production removed, analysts will now be looking for Rivian to prove it can become a profitable company. Keep in mind that despite beating estimates for the vehicles it built in the fourth quarter, Rivian still undershot full-year deliveries by about 13%. This was reflected in the company’s revenues, which declined sharply year-on-year.
However, the 49,476 vehicles it built were higher than its revised forecast of 47,000 to 49,000 vehicles.
A major step towards profitability
After hitting a 52-week low in November, RIVN stock has been on the rise after it announced A joint venture worth $5.8 billion with Volkswagen OTCMCTs: my regiments. Under the terms of the agreement, Volkswagen will use Rivian’s software in its upcoming electric vehicles. Investors were excited about how this additional revenue stream, which is less capital-intensive and therefore more profitable, could push the company toward profitability.
However, for the company to achieve sustainable profitability, it will have to demonstrate its ability to build electric vehicles in a cost-effective manner. The company is unlikely to answer this question until it launches its new models with lower material costs in 2026.
Meanwhile, analysts will be looking for Rivian to raise its delivery forecasts for fiscal 2025. One analyst from Truist Financial commented: “…the focus will now be on RIVN’s ability to execute on its path to profitability as we see only modest year-on-year growth in Fiscal 25 Ahead of the company’s planned 2026 R2 launch in regular mode Truist reiterated its Hold rating on RIVN stock in October and cut its price target from $16 to 12. $.
Does hacking have legs?
The 15% rise in RIVN stock is impressive, especially since it’s occurring on high trading volume. On the morning of January 3, trading volume in RIVN stock was approximately 40% above average.
But at a time when all auto stocks are under pressure, should you chase the stock higher? If you are a trader, you will notice that RIVN stock still carries a high short interest of around 19%. These short positions will be under pressure, which could mean the stock still has a slight upside to go.
However, if you are considering a long position, it may be necessary to exercise caution. At $15.74 per share, RIVN is now at the resistance level it faced in mid-December 2024. It is also in line with the current February 2025 options series.
With the stock now slightly above the consensus price target among analysts, now may be a good time to wait for a better entry point. As of midday trading on January 3, analysts had not responded to the company’s news.
That could come when Rivian reports earnings in February. At this point, analysts will be looking for confirmation that the company is indeed approaching profitability.
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