Sign InRivian's Stock Shows Potential for Volatility Ahead of Earnings Announcement
Summary
Rivian's share price is anticipated to display volatility in the upcoming trading days with the looming earnings results, and while there is potential for upward movement based on analyst price targets, the overbought RSI suggests a near-term pullback, leading to a final categorization of 'Hold.' (July 12, 2023)
Company Overview
Rivian Automotive, Inc. (ticker: RIVN) is traded on the NASDAQ exchange. As of the last close on July 12, 2023, the share price was $25.91, seeing a change of 4.27% or $1.06. The volume for the trading day was substantial at 106.93 million shares, well above the average volume of 37.76 million.
Fundamental Analysis
As for the company's fundamentals, Rivian has a market capitalization of $24.14 billion, a negative EPS of -12.55, and PE of -2.06, reflecting a challenging earnings picture. The company's current share price, $25.91, sits within a broad 52-week range from a year low of $11.68 to a year high of $40.86.
Additionally, the impending earnings announcement for Rivian is to occur on August 8, 2023. Depending on the results of this announcement, there could be significant volatility in Rivian's share price around this time.
Technical Analysis
Rivian's recent price action has seen it trading between a low of $23.71 and a high of $26.261, with the 50-day moving average of $15.16 and a 200-day moving average of $20.70, indicating a bullish momentum in the short term. The high RSI of 88 suggests the stock is currently in an overbought state, which might indicate a potential pullback or consolidation.
The MACD, a trend-following momentum indicator, shows positive momentum with a value of 1.15 for the last three months.
Analyzing Analyst Predictions and DCF
The calculated discounted cash flow (DCF) values the stock at $38.58, somewhat higher than current trading prices. On the other hand, market predictions show a wide variance, ranging from a low target of $14 to a high target of $147. The consensus target forecast stands at $53.95, and the median target is set at $35, both higher than the current trading value.
News Impact and Sentiment
The sentiment around Rivian remains mixed, according to recent news headlines. While Barclays analysts have set a price target of $30 on Rivian's stock, reflecting potential growth, some bearish opinions voice concerns about increased competition in the electric vehicle sector.
However, positive news such as Rivian outrunning its delivery expectations for the quarter and continued investor optimism towards the EV market potentially stack favorably for the stock.
Price Prediction and Final Evaluation
Using both technical and fundamental analysis, it can be reasonably anticipated that Rivian's share price will display some volatility in the upcoming trading days, particularly with its earning results looming. Taking into account the DCF and analyst price targets, there is potential for upward movement; however, the overbought RSI may indicate a near-term pullback.
Given the strength of the industry, the positive recent news, and the projected targets, Rivian's shares could close near $26.80 for the next trading day and could potentially approach $28.50 within next week, following some consolidation after recent gains.
However, it's crucial to consider the overarching fundamentals and the company's negative PE and EPS figures, indicating its profit-making challenges.
Hence, the final categorization for Rivian would be a 'Hold.' This is based primarily on the consideration of potential short-term gains based on technical indicators and recent bullish news, balanced against the fundamental headwinds and competitive pressures evident in the company's sector.
