Rivian Automotive Inc (RIVN: NSD) recently made headlines as the stock soared nearly 40% on the back of a significant joint venture announcement with Volkswagen (VOW: F). The German automobile giant plans to invest nearly $1 billion in Rivian, with a potential total commitment of $5 billion by 2026. This substantial cash infusion is perceived as a lifeline for Rivian, paving the way towards positive cash flow.

Stock Target Advisor’s Analysis on Rivian: 

Stock Target Advisor has assigned a ‘Hold’ rating to the stock, with a target price set at $13.89. The expected price change over the following 12 months stands at a promising 16.13%. The average analyst target price, meanwhile, is a slightly more optimistic $15.65, reflected in an average ‘Buy’ rating.

Stock Target Advisor’s own analysis of Rivian is slightly bearish, based on a review of 3 positive signals and 4 negative signals. Over the trailing 12 months, the capital gain is noted at -14.2%, while the stock’s sector percentile ranking is 90.91%. Over a five-year term, Rivian has demonstrated an impressive revenue growth of 88732.38%, topping its sector percentile ranking at 100%. However, the profitability ratios present a cautionary picture, with return on assets (RoA) at -21.33%, return on equity (RoE) at -53.13%, and return on invested capital (RoIC) at -40.14%. The company’s debt-to-equity ratio is also relatively high at 48.47%.

Conclusion: 

In light of the Volkswagen JV, Rivian’s stock has experienced a meteoric surge, and analysts anticipate further gains, underpinned by positive market sentiment and potential for future growth.