Sign InRivian Stock Faces Short-Term Pressure Ahead of Earnings Announcement
Summary
Rivian's stock price closed at $16.17 on October 26, 2023, experiencing a 4.99% drop from the previous close, with lower trading volume and a bearish trend, indicating a potential undervaluation but caution necessary due to ongoing challenges and negative earnings. (Date of analysis: October 26, 2023)
Introduction
Rivian Automotive Inc. (ticker: RIVN), a well-known player in the electric vehicle market, recently closed at a price of $16.17 on October 26, 2023. This represents a drop of $0.85, or 4.99%, from the previous close. With a market cap of approximately $15.20 billion, Rivian has shown significant price fluctuation over the past year, with a high of $36.446 and a low of $11.68.
Volume, Averages, and RSI
Rivian’s last trading volume stood at 28.68 million, which is less than its average trading volume of 36.56 million. The lower volume, combined with the negative change, may indicate a waning interest from investors. The RSI14 value of 31 is below the typical neutral range of 30 to 70, indicating that the stock might be oversold.
The stock is currently trading below both its 50-day moving average of $21.16 and the 200-day moving average of $18.22, a bearish sign.
MACD and ATR
The MACD (Moving Average Convergence Divergence), a momentum oscillator, stands at -1.74, suggesting a bearish trend. The ATR (Average True Range) is 7.78, indicating high volatility, which combined with the lack of support, presents a risky investment for short-term traders.
EPS and PE Ratio
Rivian posted earnings per share (EPS) of -$6.46. The company's negative PE (Price to Earnings) ratio of -2.5 reiterates the fact that it is not currently generating positive earnings. This could be a concern for investors looking at the profitability of the company.
Analyst Ratings and Projections
Analysts have given Rivian a consensus rating of "Buy", with 14 recommending "Buy", two recommending "Hold", and two recommending "Sell". Their target high for the stock is $147, and the target low is $14, with a consensus target of $53.1 and median target of $33.
DCF and Market Sentiments
According to the Discounted Cash Flow (DCF) analysis, Rivian’s share price could be worth around $28.84, raising the possibility that the stock may be undervalued. However, recent news points to investor concern over demand and declining selling prices for the company's green vehicles, suggesting a cautious investor approach.
Upcoming Earnings Announcement
The company's next earnings announcement is scheduled for November 7, 2023. This could induce significant movement in stock prices, considering past news of Rivian's billion-dollar losses and the company's inability to break even.
Prediction
Given the technical signals alongside recent news and upcoming earnings announcement, Rivian stock may continue to face pressure in the short term. It is difficult to pinpoint an exact price for the next trading day on October 27, 2023, but the MVP (most probable value) might be somewhere around the last close price considering no substantial positive news or triggers.
For the upcoming week, if the company’s earnings announcement unveils positive surprises, the stock may rebound towards its 200-day moving average around $18.22.
Final Evaluation
In light of the current technical and fundamental circumstances, the evaluation for Rivian stands at "Hold". While Rivian stock looks potentially undervalued according to the DCF analysis, the company's ongoing challenges signify the need for caution. The negative EPS and the macro economic factors present a risk. However, the promising consensus among analysts, plans to build a second EV plant in 2024, and the valuable partnership with Amazon make Rivian a stock to watch closely.
