Sign InRivian Automotive (RIVN) Shows Potential for Growth Amidst Positive Market Sentiment
Summary
Rivian Automotive, listed on NASDAQ, has a market cap of $23.12 billion as of July 14, 2023, with stock performance showing some volatility but potential for growth, a negative EPS and P/E ratio indicating lack of profitability, a consensus target price of $53.95, and positive news suggesting a potential increase in stock price on the next trading day and throughout the upcoming week, making it advisable to hold onto current stock.
Company Overview
Rivian Automotive, Inc. (RIVN) is a well-established entity in the electric vehicle (EV) market, listed on the NASDAQ exchange. As of the last close on July 14, 2023, the company's market cap stood at $23.12 billion.
Stock Performance
On July 14, 2023, RIVN closed at $24.82, a drop of $0.70 (-2.74%), with a volume of 55.42 million shares, above its average volume of 40.35 million shares. In terms of price range, the stock demonstrated a low of $24.54 and a high of $25.79 for the day – a relatively narrow band compared to its 50-day moving average of $15.68 and the 200-day moving average of $20.62.
Looking at stock performance within the year, RIVN experienced a low of $11.68 and a high of $40.86, indicating volatility but also potential for significant growth. The stock's relative strength index (RSI14) score is 88, suggesting a possible overbought condition.
Business Fundamentals
RIVN's EPS stands at -$7.31 and demonstrates a P/E ratio of -3.4, indicating the company is not currently profitable. Considering the provided discounted cash flow (DCF) of $37.49, it's clear that some analysts believe Rivian has considerable growth potential.
Target Price Outlook
Consensus target for RIVN is $53.95, with a high estimate of $147 and a low of $14. These figures illustrate bullish optimism from some analysts and caution from others, resulting in a median target of $35. Also, there seems to be a large gap between analysts’ expectations and current trading price, indicating possible future upward movement.
Recent News
Recent news reveals that Rivian's stock price surge is due to the increased production and narrowed the gap in delivery, thanks to enhanced demo drive programs and expanded showroom/experience centers. The firm's "production master plan" predicts production of 62K vehicles in FY2023, marking a growth of 154.8% YoY. Some skepticism revolves around RIVN, but improved production figures and the company's strategic initiatives appear to be alleviating these concerns.
Next Trading Day Prediction
Due to the positive news, it can be projected that the price might increase on the next trading day, July 17, 2023, barring any unforeseen negative events affecting the entire market sector or the company specifically.
Upcoming Week Prediction
In the upcoming week, the price is anticipated to trend upwards as well, considering Rivian's positive production forecast and the thriving EV market. However, the high RSI score must be acknowledged, as this overbought indication could provoke a slight pullback.
Final Evaluation
Considering Rivian's production improvement, the significant potential indicated by the DCF model, and the recent stock price uptrend spurred by positive market sentiment for EVs, it is advised to categorize Rivian as a Hold. The rationale is that current investors could capitalize on possible future increases in stock price, while potential investors must factor in the RSI score hinting at an overbought condition, indicating it may not be the best entry point. Yet, as Rivian continues to prove its production capabilities and expansion potential, the stock may later transition to a Buy rating.
