Sign InRivian Automotive's Stock Shows Positive Momentum and Potential Growth
Summary
Rivian Automotive, Inc.'s stock is showing positive technical indicators and news sentiment, suggesting a potential slight increase in the next trading day and an upward trend in the long term, although high volatility should be considered.
Technical Analysis
As of September 29, 2023, Rivian Automotive, Inc. (RIVN) traded at a closing price of $24.28, marking a 5.20% increase. The stock showed a high of $24.5 and a low of $23.39 for the day. Its Relative Strength Index (RSI14) stands at 55, suggesting the stock is moderately trending towards overbought conditions but still within a normal range.
The stock's 50-day moving average is $23.20 and the 200-day moving average is $18.29. The fact that the stock price is significantly higher than both its 50-day and 200-day moving averages indicates that the stock is on an upward trend. Additionally, the positive 3-month MACD of 0.67 points towards bullish momentum.
Rivian shows a substantial Average True Range (ATR) of 5.14, suggesting high levels of volatility that investors should take into consideration. The immediate support and resistance levels are $22.35 and $24.7, respectively, providing potential targets for the stock's price movement.
Fundamental Analysis
Rivian Automotive holds a massive market cap of $22.83 billion, with around 940.31 million shares outstanding. The negative earnings per share (EPS) of -$6.98 and a negative Price to Earnings (PE) ratio of -3.48 reflect the company’s current lack of profitability.
The projections shown in the Discounted Cash Flow (DCF) model value the stock at around $36.95, indicating that the stock might be undervalued at the current price of $24.28. The wide range between the target low and target high ($14 to $147) shows uncertainty and high speculation around the stock's future price, with a target median at $33 and consensus at $53.1.
Under the analyst recommendations, 'buy' signals dominate the pool with 11 recommendations, while 'hold' and 'sell' come with 3 and 2 picks, respectively. No 'strong sell' or 'strong buy' opinions were expressed.
Recent News Analysis
News sentiment around Rivian appears largely positive. The stock received an upgrade from an investment analyst at Baird earlier in the week which likely contributed to its recent increase. It is also set to ramp up production and cut costs, two critical steps towards higher profitability and competitiveness in the electric vehicle (EV) market. The company does not seem worried about the competition from Tesla, implying confidence in its unique customer base and product offerings.
Prediction
Taking into consideration the technical and fundamental indicators along with the news sentiment, Rivian's stock price may experience a slight bump on the next trading day, October 2, 2023, possibly surpassing its current resistance level of $24.7. The upward trend may continue over the next week but the level of volatility foreseen implies that investors should tread carefully.
Final Evaluation
Given the overall analysis, Rivian Automotive, Inc. (RIVN) may be a 'Hold' for short-term traders due to the current high volatility with an upward trend. For long-term investors, the stock leans towards a 'Buy' considering the positive news sentiment, the bullish technical signals, and the significant potential growth in the EV market. The company's planned production ramp-up and cost reduction strategies suggest it is taking steps towards profitability. However, investors should be cautious about the negative EPS and the considerable range in future price estimates.
