Sign InRIVN: Fundamentals, Technicals, and Analysts Point to Strong Buying Opportunity
Summary
Rivian Automotive (RIVN) is categorized as a BUY based on fundamental and technical analysis, analyst recommendations, news updates, and the potential for future growth, despite its high volatility and oversold condition. (Analysis conducted on October 17, 2023)
Fundamental Analysis
Rivian Automotive, Inc., with a ticker symbol of RIVN, operates at NASDAQ. It has a market capitalization of $17.14 billion, with approximately 940.31 million outstanding shares. The Electric Vehicle (EV) company reported a last close of $19.90 on October 17, 2023, with a change of 1.22% or a $0.24 increase. The company's earnings per share (EPS) is -6.45, which exhibits a negative profitability measure, thereby resulting in a negative Price to Earnings (PE) ratio of -2.83.
For the yearly price performance of the stock, the highest price recorded is at $36.45 and the lowest is at $11.68. In the day's trading on the said date, the stock fluctuated between $19.21 and $20.22. Also, an average of approximately 39 million shares of RIVN are traded daily, although, on October 17, 2023, a notable decrease was seen, with only 28.15 million shares traded.
The company is expected to release its earnings on November 7, 2023. This could set a potential trigger for the stock’s price movement as investors will focus on the company’s profitability.
Technical Analysis
RSI14 suggests a near oversold condition at 39, indicating a potential opportunity for investors to enter the market. Comparing the last closing price with its 50-day moving average of $21.75 and 200-day moving average of $18.22, the stock's short-term performance is slightly bearish, but it remains bullish looking at it from a longer-term perspective. The ATR of 6.96 suggests that the stock has high volatility, while the negative MACD of -0.95 suggests a bearish momentum.
The stock has a support level at $19.64 and resistance at $22.35. A breakout beyond these levels could indicate a potential change in the price trend.
Analysts Recommendations and DCF Analysis
Based on analyst recommendations, 13 recommend buying RIVN; three suggest to hold, and two advise selling. The consensus is a "Buy". The target prices for the stock range from $14 to $147, with a consensus target price of $53.1 and median target price of $33. Despite the negative profitability measure reflected by the EPS, the discounted cash flow method shows a value of $30.90, indicating the potential for substantial growth based on future expected cash flows.
Recent News
In recent news, Amazon has reached 10,000 in its fleet of Rivian vans, which could be an indicator of Rivian's sales growth. Additionally, Rivian’s CEO assured stakeholders that an earlier-than-expected bond issuance was intended to secure the company’s balance sheet amidst geopolitical risks and should not be interpreted as a reflection of the company’s financial health.
Conclusion: Evaluation of the Stock
Considering both the fundamental and technical aspects, together with the analyst recommendations, news updates, and the potential for significant future growth reflected by the DCF value, RIVN is categorized as a "BUY." This is underpinned by the increasing adoption of Rivian's vehicles coupled with the support of a large company like Amazon and positive signals from the subsequent target price and consensus. However, caution should still be applied due to its high volatility and current oversold condition, which could suggest a potential trend reversal.
