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.
Muzzammil is a content writer at Stock Target Advisor. He has been writing stock news and analysis at Stock Target Advisor since 2023 and has worked in the financial domain in various roles since 2020. He has previously worked on an equity research firm that analyzed companies listed on the stock markets in the U.S. and Canada and performed fundamental and qualitative analyses of management strength, business strategy, and product/services forecast as indicated by major brokers covering the stock.
