Sign InRivian Automotive: Strong Momentum and Positive Sentiment Suggest Potential Upside
Summary
Rivian Automotive, Inc., is a noteworthy company in the electric vehicle industry with strong upward momentum and potential undervaluation, making it a stock to hold despite its lack of profitability as of July 2023.
Company Overview
Rivian Automotive, Inc., operating under the ticker RIVN on NASDAQ, is a company noteworthy for its role in the electric vehicle (EV) industry.
Technical Analysis and Price Momentum
As of the July 10, 2023, trading day, Rivian's shares closed at $25.51, a change of 3.28% or an increase of $0.81. The shares traded within a range of $23.58 and $26.61, showing an upward trend for the day. The daily trading volume has been high, with 172.68 million shares changing hands versus an average volume of 33.98 million.
The 14-day Relative Strength Index (RSI) is at 85, suggesting that Rivian is overbought and could be due for a price correction. However, the moving averages indicate that Rivian has strong upward momentum. The 50-day moving average is $14.65 while the 200-day moving average is at $20.8, significantly lower than the current price level. This suggests that the stock is in a bullish trend. The 3-month MACD, which measures momentum, also suggests an upward trend.
Fundamental Analysis
Talking about the fundamentals, the market capitalization of Rivian stands at $23.76 billion, with approximately 931.51 million shares outstanding. A negative earnings per share (EPS) of -$12.55 and PE ratio of -2.03 indicate that Rivian is currently not profitable.
The discounted cash flow (DCF) analysis reveals a DCF of $38.18, which is way above the company's current price, indicating that the stock might be undervalued at present.
Analysts predict a high target of $147, a low of $14, and a average consensus target of $53.95 for Rivian's stock, suggesting potential upside from the current price.
Recent News and Sentiment
Sentiment towards Rivian seems to be positive with increased interest in the company's call options, which has had an effect on boosting the stock price. The streak of recent gains has drawn comparisons to Tesla, suggesting strong investor interest. The stock has received two $30 price target increases in as many days, indicating a bullish trend in price predictions. Rivian's standing as one of the three EV stocks to watch also adds to its bullish sentiment.
Predictions and Evaluation
Considering the strong upward momentum indicated by technical analysis, increased investor interest suggested by rising call options, and potential undervaluation suggested by the DCF analysis, Rivian's stock price might rise on July 11, 2023. However, the high RSI suggests that the stock could see a price correction in the short term.
Based on current strong bullish momentum and positive news sentiment, Rivian's stock could continue its upward trajectory over the coming week.
While the company's fundamentals currently suggest that it is not profitable, the significant interest in the EV market, strong technical indicators, bullish sentiment, and potential undervaluation make Rivian a stock to hold. The company has significant upside potential, provided it manages to control its costs and start generating profit.
Final Evaluation
Despite the lack of profitability so far, Rivian Automotive, Inc. is considered as a 'Hold' based on the current market conditions and the high growth potential in the electric vehicle market.
