Rivian Stock Still a ‘Buy’ Despite Headwinds — Here’s Why It’s Worth Your Money

Mandatory Credit: Photo by John Bazemore/AP/Shutterstock (12649743a)Rivian logo is shown on one of the company's electric pickup trucks, in AtlantaRivian, Atlanta, United States - 15 Dec 2021.
John Bazemore/AP/Shutterstock / John Bazemore/AP/Shutterstock

Electric vehicle (EV) company Rivian — which had a blockbuster IPO in November but has since been struggling with supply chain issues and chip shortages — saw its stock rise on May 31 following a bullish analyst note.

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Mizuho analyst Vijay Rakesh said that current prices were a “good entry point” for Rivian stock following an event with Rivian CFO Claire McDonough, Barron’s reported.

Rakesh said that production is improving, thanks to shifts being added — notably at Rivian’s Illinois plant, per Barron’s. He has a Buy opinion on the stock, with a $80 price target.

Rivian stock is down 69.4% year-to-date, and up 0.7% in pre-market trading on June 1.

Barron’s reports that 65% of analysts covering the stock have a Buy opinion.

Wedbush Securities analyst Dan Ives also has an Outperfrom rating on the stock, despite some earlier skepticism. Ives said that while the past quarter was not without issues for the EV manufacturer, it does finally appear that Rivian is on the right track, showing strong demand and a supply chain that should produce 25,000 deliveries this year. 

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In his note, Ives added that from a core engineering and design perspective — and in light of a commercial relationship with Amazon which would see Rivian provide Amazon with ~8,000 delivery vans — the company has the potential to be a major EV stalwart over the next decade.

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Analyst Echoes Bullish Sentiment on Rivian

Howard Smith, contributing analyst at The Motley Fool, told GOBankingRates that in a growing field of competition among EV makers, Rivian stands out for several reasons. First, compared to other startups, Rivian has raised enough capital prior to its public debut (and through its IPO) to hold about $17 billion in cash, cash equivalents, and restricted cash as of March 31, 2022, Smith said. In addition, he noted, one of its early backers was Amazon, which also has given Rivian an added base load of up to 100,000 electric delivery vehicles (EDVs) on its order book. Rivian also sports a product that won early acclaim, with the R1T pickup truck being named MotorTrend’s 2022 Truck of the Year, he added.

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“For investors, the question is valuation. The company has a market cap of about $28 billion, and there are near-term headwinds that include supply chain challenges and increasing input costs,” Smith said. “So there is already solid execution built into the stock price. But the company has the pieces in place for long-term success if it can navigate the short-term challenges. There’s no guarantee that it will, but for investors wanting exposure to the EV sector with a long-term time horizon, Rivian looks to be a solid option right now.”

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About the Author

Yaël Bizouati-Kennedy is a full-time financial journalist and has written for several publications, including Dow Jones, The Financial Times Group, Bloomberg and Business Insider. She also worked as a vice president/senior content writer for major NYC-based financial companies, including New York Life and MSCI. Yaël is now freelancing and most recently, she co-authored  the book “Blockchain for Medical Research: Accelerating Trust in Healthcare,” with Dr. Sean Manion. (CRC Press, April 2020) She holds two master’s degrees, including one in Journalism from New York University and one in Russian Studies from Université Toulouse-Jean Jaurès, France.
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