Latest news with #RivianAutomotive
Yahoo
13 hours ago
- Automotive
- Yahoo
Rivian Stock Dips Below $15: Should You Buy?
Rivian is struggling to grow deliveries but is improving cash burn. The company has a lot of cash and a partnership with Volkswagen. It is aiming to grow production, but is in a tough spot trying to increase customer demand. 10 stocks we like better than Rivian Automotive › Excitement around electric vehicles (EVs) has waned, at least in the United States. Tesla has lost its growth profile and is struggling to ship more units to customers. Chinese brands are taking increasing share in markets outside the United States. One EV upstart stuck in the mud is Rivian Automotive (NASDAQ: RIVN). The maker of high-end trucks and SUVs is experiencing falling deliveries to customers and is struggling to generate positive cash flow. The stock has fallen back below $15 as I write this, and is well off all-time highs from near its initial public offering. Does this make the stock a good buy-the-dip candidate today? The narrative around Rivian Automotive is sound. It is building premium EVs in America, tackling the high-end truck and SUV market, which has strong profit characteristics. It's got new factories under construction and more affordable vehicles coming down the line. And don't forget its EV delivery van product, which has a huge contract from Amazon -- an investor in the company -- as well as other buyers. These tailwinds are not showing up in the numbers today. Rivian expects to deliver 40,000 to 46,000 vehicles this year, compared to 51,579 in 2024. Demand seems to be waning for Rivian vehicles as it serves the high end of the EV space in the United States, which is quite niche. This is a problem that also happened to Tesla before it introduced its more affordable vehicles. Rivian hopes the same can occur with its upcoming R2 product, with plans for a starting price of $45,000. Encouragingly, Rivian has increased its profitability, bringing gross profit to a positive figure in the last two quarters. However, free cash flow is still deeply negative at a $1.86 billion burn over the last 12 months. The company needs more scale and better efficiency in order to build a sustainable business. It has made some progress in this regard, but still has a long slog ahead. Rivian's cash burn is ugly, but it has a lot of funding sources to help it keep building its production capacity over the next few years. There is still $7.2 billion in cash on the balance sheet, along with funding commitments from Volkswagen as part of a joint venture and a proposed $6.6 billion loan from the U.S. government. Volkswagen is a development and software partner for Rivian and plans to invest billions into the stock if Rivian can hit operational and gross profit milestones. Last quarter, Rivian saw a huge increase in its software and services revenue to $318 million compared to $88 million a year prior. A lot of this came from $167 million in revenue from the Volkswagen joint venture, which should help the company get closer to profitability. The segment had positive gross profit of $114 million last quarter. Overall, Rivian will need to get increased scale in its automotive business in order to generate positive free cash flow and become sustainable. It generated a slight gross profit for the automotive segment of $92 million last quarter, which is great progress compared to the ugly figures in years prior. Automotive gross margin was 10% last quarter. This figure will need to grow in the coming years to keep the company improving. If Rivian can return to growing deliveries with its upcoming cheaper models, there is a path to solid profit generation. Rivian generated $5 billion in revenue in 2024 even though its total deliveries were only around 50,000. If total deliveries can grow to 250,000 -- Tesla is close to 2 million, for reference -- I think $20 billion in revenue is possible. A 10% bottom-line net income margin that could occur once gross margin gets higher than today would equate to $2 billion in annual earnings. Given that, a current market cap of $16.6 billion looks mighty cheap. But how likely is the company to return to growth? I am not sure investors should be confident in this occurring. Competition is fierce in the EV space. You have Tesla, legacy competitors, Chinese players selling outside the United States, and other upstart EV brands trying to win customer loyalty. Rivian has a good product, but that does not necessarily mean it can compete and win in this market at scale, which it needs to do in order to succeed. It looks to me like Rivian's product demand is much lower than initially thought, which should keep investors away from the stock. If the company cannot scale customer demand, it will likely never generate a profit, making this a risky stock to buy today. Before you buy stock in Rivian Automotive, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Rivian Automotive wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $656,825!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $865,550!* Now, it's worth noting Stock Advisor's total average return is 994% — a market-crushing outperformance compared to 172% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 2, 2025 John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Brett Schafer has positions in Amazon. The Motley Fool has positions in and recommends Amazon and Tesla. The Motley Fool recommends Volkswagen Ag. The Motley Fool has a disclosure policy. Rivian Stock Dips Below $15: Should You Buy? was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
13 hours ago
- Automotive
- Yahoo
Prediction: Buying Rivian Stock Today Could Set You Up for Life
Rivian is about to reach an inflection point for growth. The valuation does not yet reflect this opportunity. Shareholders must remain patient for the biggest gains. 10 stocks we like better than Rivian Automotive › There may never be another Tesla (NASDAQ: TSLA). Shares of the company have increased in value by 27,000% since 2010. A small initial investment could have become hundreds of thousands of dollars over that time. Tesla's high-profile leader, Elon Musk, has pushed the company into many lucrative verticals, everything from electric vehicles and solar power to distributed energy and robotaxis. While no electric car competitor may reach Tesla's $1 trillion market cap anytime soon, it would still be very profitable to find the next Tesla, at least in terms of a small EV business ready to scale aggressively. No Tesla competitor looks to have more growth upside over the next few years than Rivian (NASDAQ: RIVN). In fact, I think buying Rivian shares now could really pay off. Just be aware of the risks before jumping in. To buy a stock for life you need to be confident that the underlying business can continue growing for decades to come. When it comes to electric vehicle demand, the macro landscape is very promising. Right now, less than 10% of U.S. vehicle sales are electric. By 2030, however, market penetration could approach 20%, according to some estimates, a more than doubling over just five years. Longer term, the growth prospects are even more encouraging. Some developed countries already have EV penetration rates above 90%. By 2040, we could see a majority of U.S. sales being electric, providing a multidecade growth runway for EV manufacturers to sell into. Which companies will dominate this growth opportunity? Manufacturers that can deliver low-cost EVs for the masses. Most EVs right now are priced as luxury options. Tesla's Model X and Model S vehicles, for example, can cost upward of $100,000, depending on options. But more than 90% of Tesla's sales come from its Model 3 and Model Y vehicles -- later-generation EVs with starting prices below $50,000. Tesla got its start with luxury EVs, but it was its low-priced models that really put it on the map. Right now, Rivian is behind Tesla in terms of reaching this mass market. It has only two luxury vehicles, both priced at $70,000 or above. But that should all change next year when Rivian begins producing its first mass-market model, the R2, which will be followed up by even more affordable options like the R3 and R3X. All of these models are expected to debut under $50,000. These mass-market vehicles not only set up Rivian to replicate Tesla's proven road map for growth, but they also position it to compete aggressively as EV penetration rises in the years and decades to come. Without mass-market models, many EV makers will struggle to ride this rising wave, but not Rivian. Rivian's diminutive $17 billion market cap provides huge growth upside, especially compared to Tesla's $1 trillion valuation. Importantly, however, Rivian doesn't have other promising business segments like Tesla's robotaxi initiative that should add big growth to the company long term. Plus, Rivian remains years behind Tesla in terms of rolling out mass-market vehicles that are purchased by the millions. Still, Rivian's relatively cheap valuation more than makes up for these weaknesses. Shares trade at just 3.1 times sales compared to 12.7 times sales for Tesla stock. That valuation is too cheap to ignore, but don't expect quick returns. Tesla stock traded sideways for years even as growth ramped up, leaving the biggest gains for long-term shareholders -- we're talking investors that held on for a decade or more. Rivian looks well positioned for growth over the long term. And its valuation doesn't fully reflect its potential. The biggest risk may not lie with the company but with investor behavior. If you're looking for easy gains, this is not the company for you. But if you're looking for a high-upside stock that you can own for a lifetime, consider building a small position. Before you buy stock in Rivian Automotive, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Rivian Automotive wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $656,825!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $865,550!* Now, it's worth noting Stock Advisor's total average return is 994% — a market-crushing outperformance compared to 172% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 2, 2025 Ryan Vanzo has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy. Prediction: Buying Rivian Stock Today Could Set You Up for Life was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
a day ago
- Automotive
- Yahoo
Does the Future Look Bright for Rivian Stock?
Rivian Automotive is aiming to bring cheaper models to market in the next few years. It should benefit from increased demand for EVs, but it also faces a lot of competition. Shares of the stock may be cheap, but the company's large cash burn makes it highly risky. 10 stocks we like better than Rivian Automotive › It has been tough sledding for Rivian Automotive (NASDAQ: RIVN) since going public in 2021. The stock is down 90% from all-time highs as the company struggles to generate a profit and grow deliveries for its line of electric vehicles (EVs). It is a testament to the bubble in EV stocks that occurred a few years back. Now, Rivian's valuation is back closer to reality. A 90% cheaper stock price may make some contrarian investors perk up. If the company can turn around and ride the EV wave to bigger scale, the stock may have a bright future ahead of it. Let's run the numbers and see whether Rivian stock can reverse its fortunes in the years ahead. Rivian has begun its life at as a manufacturer of EVs by focusing on larger and more expensive vehicles. These are the R1T truck, R1S SUV, and the Rivian commercial van sold to delivery providers such as Amazon. These products can be profitable, but with large price tags they have a limited addressable market. In the future, Rivian is pinning its hopes on more affordable midsize SUVs. First up will be the R2 vehicle, which is coming hopefully in 2026 and will cost $45,000 at the base level. Further on in this decade will be the R3, a much more affordable small SUV expected to cost $37,000. These price points will make Rivian vehicles much more affordable for the average American looking for a car compared to its current vehicles, which can run up close to $100,000 with add-on features. This is needed quickly, because Rivian's deliveries to customers have stalled out and actually declined in recent quarters. Customers love the product, but with a high price point there is only so much demand you will get. These cheaper models can hopefully boost deliveries for the rest of the decade and help Rivian achieve even more scale. Scale is vital in the automotive business due to the high fixed costs of manufacturing cars. This is why Rivian's gross margin is barely positive and free cash flow was negative $1.86 billion over the last 12 months. Demand for EVs is set to grow over the next 10 to 20 years. Analysts estimate that around 20% of car purchases in the United States currently come from battery electric vehicles or hybrid cars. Eventually, close to 100% of new car purchases should be from EVs -- and of these purchases, more and more should come from full battery-electric cars like those Rivian sells. This should be a multi-decade tailwind that companies like Rivian can ride. The company has a lot of liquidity to access on its balance sheet, including $7.2 billion in cash, $3.5 billion in commitments from Volkswagen as a part of a joint venture, and a $6.6 billion loan from the federal government. This is a war chest that can help Rivian scale up its fixed manufacturing base for the R2 and R3 vehicle lines. Burning less than $2 billion in cash a year, it has many years ahead before it will run into cash burn concerns. All sounds well and good, but Rivian is dealing with a hypercompetitive environment with EVs right now. It is a bit better in the United States compared to other markets because of the lack of Chinese brands driving down prices, but it is a tough road even for the leaders such as Tesla. With more and more models coming to market, it looks like the supply of EVs outpaced the growth in demand, and the market is now processing this overcapacity. This flooding of supply will make it difficult for a smaller player like Rivian to compete and try to win customers. Rivian stock is a tough one to value. On the one hand, the company has some of the best products in the EV industry, an industry set to grow for the foreseeable future. On the other hand, there are a ton of competitors in the mix, some with much larger balance sheets and manufacturing capacity than Rivian. It remains to be seen whether Rivian's upcoming cheaper models will lead to more demand from customers, and if that can be done while generating a profit. Putting it all together, it remains unclear whether Rivian's future is bright. The stock trades at what looks like a potentially cheap market cap of $16.6 billion if the company can get any semblance of scale with the R2 and R3 models. I don't know how confident investors should be in this occurring, though. Perhaps now is a good time to take a small position in Rivian stock if you like the brand, but don't bet the entire farm on this highly risky situation. Before you buy stock in Rivian Automotive, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Rivian Automotive wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $657,385!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $842,015!* Now, it's worth noting Stock Advisor's total average return is 987% — a market-crushing outperformance compared to 171% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 2, 2025 John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Brett Schafer has positions in Amazon. The Motley Fool has positions in and recommends Amazon and Tesla. The Motley Fool recommends Volkswagen Ag. The Motley Fool has a disclosure policy. Does the Future Look Bright for Rivian Stock? was originally published by The Motley Fool
Car and Driver
3 days ago
- Automotive
- Car and Driver
View Exterior Photos of the 2025 Rivian R1S Tri-Motor
Read the full review | see interior photos The Rivian R1S is entering its fourth model year, and the electric SUV sees some powertrain changes, including the arrival of the new Tri-Motor model, tested here.
Yahoo
5 days ago
- Automotive
- Yahoo
Prediction: Rivian Stock Is a Buy Before Aug. 5
Rivian's revenue growth rates are about to spike. Bigger scale will improve profitability. The stock's valuation doesn't fully account for these catalysts. 10 stocks we like better than Rivian Automotive › Rivian Automotive (NASDAQ: RIVN) investors have been very happy over the past month. The valuation of this electric car stock has surged by roughly 40%. Looking under the hood, however, it's easy to project significantly more growth to come. There are three major reasons investors should consider buying Rivian shares before the company's next earnings call, which is expected to occur sometime around Aug. 5. Rivian has been experiencing a period of sluggish sales growth in recent years. Its R1T model was released back in 2021, with the R1S variant launched the following year. Sales grew significantly after their launch, but with price tags that can approach $100,000 depending on options, the total addressable market for these vehicles was always rather small. Rivian's flatlining sales growth in recent years suggests the company has reached a level of market saturation with the only two vehicles in its lineup. All of this should change next year when the company begins shipping the first of three new models: the R2, R3, and R3X. All three are expected to have price tags of under $50,000, unlocking millions of new potential buyers that can finally afford one of the company's products. Analysts expect only 5% sales growth in 2025, a figure that bumps up to 41% in 2026. Once production of these models starts to scale, however, revenue growth could explode in 2027 and beyond. Last year, Rivian's management team promised investors it would achieve a positive gross margin by the end of the year. It took until the final quarter, but the company delivered. Last quarter, its gross margin improved even further into positive territory, matching Tesla's profitability levels. The biggest factor in achieving profitability as an electric vehicle manufacturer is achieving scale. The more cars a company sells, the more fixed costs can be spread over a larger volume of sales. If Rivian's mass market vehicles experience as much sales success as Tesla's Model Y and Model 3 vehicles, expect Rivian to experience significant operating leverage, pushing profitability even higher. The two factors above won't be realized before the company's next earnings call. In fact, it will take several more quarters for Rivian's new models to hit the market. From there, it may take another year or so for production to fully scale. The reason to buy Rivian now isn't that there are near-term milestones that will be reached over the next few months. Instead, the valuation simply looks way too cheap to pass up, even if investors have to wait a year or two for the biggest catalysts to arrive. Right now, Rivian stock trades at just 3.3 times sales. Tesla, meanwhile, trades at 12.5 times sales, while Lucid Group trades at 8 times sales. Both of those companies have experienced higher sales growth than Rivian in recent years. But once Rivian's new models hit the market, expect its sales growth and profitability to improve dramatically, earning a significantly higher valuation from the market. Before you buy stock in Rivian Automotive, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Rivian Automotive wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $638,985!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $853,108!* Now, it's worth noting Stock Advisor's total average return is 978% — a market-crushing outperformance compared to 171% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of May 19, 2025 Ryan Vanzo has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy. Prediction: Rivian Stock Is a Buy Before Aug. 5 was originally published by The Motley Fool Fehler beim Abrufen der Daten Melden Sie sich an, um Ihr Portfolio aufzurufen. Fehler beim Abrufen der Daten Fehler beim Abrufen der Daten Fehler beim Abrufen der Daten Fehler beim Abrufen der Daten
