Rivian Automotive (RIVN) Stock Analysis: Potential Upside Amidst Uncertainty

Stock Analysis: Rivian Automotive, Inc. (RIVN)

Technical Analysis

The last close price for Rivian Automotive, Inc. shares (RIVN) on August 22, 2023, was $20.08, representing a -5.19% change. The day saw a low of $19.77 and a high of $21.47. Notably, the stock has been trading below its 50-day moving average of $21.27 and just above its 200-day moving average of $19.42. This indicates a potential downward trend in the short term.

The RSI14 (relative strength index) for RIVN stands at a very low 19, suggesting that it is currently oversold and may be approaching a reversal point if other indicators confirm. The Average True Range (ATR), which measures volatility, is at a high 7.56, indicating considerable price fluctuation.

The technical overview also shows a critical support level at $19.56 and a resistance level at $20.43 for the stock. Further, the MACD (Moving Average Convergence Divergence) value, -1.06, reveals a bearish momentum for the stock.

Fundamental Analysis

Rivian Automotive has a massive market capitalization of $18.88 billion, with approximately 940.31 million outstanding shares. Unfortunately, the company posts a negative EPS (Earnings Per Share) of -6.53, suggesting that it is not currently profitable.

The company's PE ratio (Price to Earnings) is meaningless in this context as it's negative due to the absence of earnings. This condition is not unusual for startups or companies early in their growth phase, which invest heavily into scaling the business at the expense of short-term profitability.

Recent news demonstrates that Rivian is looking to increase profitability through scaling and leveraging fixed costs. Also, the company's proprietary software is stated as a potential competitive advantage. However, one piece of news suggests that their cash position is not as strong as it seems, indicating potential financial instability.

Analysts' consensus shows a sentiment leaning towards "Buy", with 11 indications to buy, 3 to hold, and 2 selling opinions. The median target for the stock stands at $32.5, which if reached, represents a substantial upside potential from the recent close, while consensus target is at $52.85. Nevertheless, it is necessary to consider that the highest target set by analysts is $147, indicating a wide range of possible outcomes, reflecting uncertainty about the stock's future performance.

The next earnings announcement is scheduled for November 7, 2023, which might likely cause considerable price movements, depending on the results.

Forecast and Recommendation

Given a significant discrepancy between the last close price and the analysts' consensus target, combined with the ambition to increase profitability and recent overselling reflected by the RSI indicator, Rivian's stock price might experience upward pressure in the upcoming week and over the next trading day on August 23, 2023.

Yet, considering that the company is not currently profitable and concerns raised about its cash position, as cited in recent news, there are risks associated with the stock. These risks, coupled with the stock's recent performance, might deter some investors.

Based on the available data and analyses, RIVN could be rated a "Hold" for the short-term as the inherent uncertainty suggests risk management as a prudent strategy. Nevertheless, investors should monitor its progress towards profitability closely and evaluate analyst recommendations and target prices as they get updated based on the company's performance and market changes. Matched with its potential for growth as reflected by the high analysts' target, the stock suggests promising long-term "Buy" considerations for speculators and investors with a high risk tolerance level.