Rivian Automotive's Stock Price Faces Downward Pressure Amidst Competition Concerns

Introduction

Rivian Automotive, Inc. (RIVN) is a US-based electric vehicle manufacturer listed on NASDAQ. As of the last close on July 17, 2023, the stock price stood at $23.99, marking a 3.34% decrease from the previous trading day.

Stock Price Movement and Trading Volume

RIVN witnessed a low and high price of $23.24 and $24.58 on July 17, 2023, respectfully. However, these figures are distanced apart from the yearly performance, where the stock recorded a year high of $40.86 and a year low of $11.68. Despite the price fluctuations, the stock boasts a substantial market capitalization of $22.53 billion.

In terms of trading volume, RIVN presented an active day with shares traded reaching 66.13 million, well above the average volume of 40.84 million. This heightened activity suggests surges in either buying pressure or selling pressure, critical for trend identification.

Technical Analysis

The Relative Strength Index (RSI14) for RIVN stood at 84, indicating the stock is in the overbought territory. Stocks in this area are often due for a correction, implying potential downward price movement in future sessions. The 50-day moving average of $15.92 and the 200-day moving average of $20.57 both sit below the current price, indicating a current uptrend. The MACD (Moving Average Convergence Divergence), another momentum indicator, presented a value of 2.37, verifying the bullish sentiment in the market.

Fundamental Analysis

RIVN exhibited an EPS (Earnings per Share) of -6.79, which illustrates the company's lack of profitability in the recent period. Also, with a negative PE ratio of -3.53, the valuation is currently not justified by the company's earning capacity. The DCF (Discounted Cash Flow) value was calculated to be $36.66, suggesting undervaluation at the current stock price level.

Analysts' Predictions and Relevant News

The analyst target consensus for RIVN stood at $53.95 with a high and low target of $147 and $14 respectfully. This shows a marked variance in the views of the analysts about the realistic future price.

News about intensifying competition from Tesla, Ford, and GM seemed to negatively impact investor sentiment. Tesla's first Cybertruck rolling off the assembly line over the weekend and Ford slashing prices for some F-150 Lightning electric trucks by 17% might have contributed to the stock price dip on July 17, 2023.

Prediction

Given the analysis of the technical indicators and recent market events, it can be predicted that there will be potential downward pressure on the stock price in the short term due to overbought conditions signified by the high RSI. Therefore, the stock price might decline on the next trading day on July 18, 2023. In terms of the upcoming week, the stock price might stabilize due to market correction and reflect the underlying business performance and macroeconomic conditions.

Overall Evaluation

RIVN is categorized as a 'Hold' given its current stock price nearing the DCF value & support levels of its 50 & 200-day moving averages. There seem to be short-term pressures affecting the stock price negatively, however, watching for a bounce-back from these levels could be promising. The recent negative EPS and PE could improve as the company ramps up its production and sales. The news of increased competition might put pressure in the short term but variety in the EV market is inevitable and Rivian, being a front runner, might stand to gain in the longer term. Investors should continue to scrutinize the market conditions and company performance to make informed decisions.