Electric pickup startup Rivian Stock (NASDAQ: RIVN) has leveled off somewhat after seeing a big sell-off since its November IPO. Inventory has only gained about 20% in the last two weeks (about 10 trading days), it is still about 16% below its IPO price. So what are some of the recent advancements that have fueled Rivian’s inventory? First, EV inventories have, in general, recovered somewhat from their early January selloff, after Tesla posted a strong set of effects in Q4 2021 with emerging earnings and better margins. Second, in late January, Bloomberg reported that Rivian was ramping up production of its first electric vehicle, the R1T pickup, to almost two hundred sets a week. While still a small number, it marks an improvement over the 50 sets for the week the company was reportedly producing towards the end of December, indicating that Rivian may be getting a handle on teething production issues. Separately, Ford, a major Rivian shareholder, said it has no plans to sell its Rivian stake when the lockdown period ends in May, which will also help inventory.
So do recent advances make Rivian stock a buy at existing levels of $65?We don’t believe it. As already noted, inventory looks expensive from a relatively consistent perspective, with other EV players and classic car players trading at much hotter valuations. (see update below) Competition in the EV truck area will also increase with Tesla and Ford looking at the area with their own compelling trucks. In addition, while Rivian has resolved some initial production issues, the company is likely to experience more problems as it plans to meet its production target of 150,000 electric cars through 2023 at its plant in Normal, Illinois. This may result in increased access issues for Rivian inventories.
Do you need to be exposed to the electrification of the automotive industry, without opting for individual brands of electric vehicles?Check out our EV Component Supplier Inventory for a list of corporations that can take advantage of the wonderful EV transition. See also our automotive inventory stock topic, which includes classic car manufacturers and natural electric vehicle stocks.
Below is our previous Rivian inventory policy, where you can see our vision over time.
[24/01/2022] Rivian shares are at 60% of their peaks, but they still don’t buy
The Rivian inventory of electric pickup truck startup (NASDAQ: RIVN) has fallen nearly 37% so far in 2022, due to the broader sale of futuristic high-growth inventories, as investors brace for interest rate hikes and U. S. political financial tightening. U. S. this year. Now, we’ve been bearish in Rivian’s inventory since its IPO in November (see updates below), given its rich valuation (over $110 billion at its peak) and the fact that it hadn’t started advertising sales yet. Inventory in spite of everything a purchase now, given that it is down more than 60% from its all-time highs?
While it’s tricky to price a company like Rivian, given that it’s not yet generating profits and operating in a high-growth market, we believe inventory still looks expensive from a relative perspective. about $60 billion, which is just ahead of Honda and slightly below GM, which delivers millions of cars a year. There are also less expensive games in the EV space. which is expected to generate a profit of around $10 billion in 2022, is priced at around $43 billion.
While Rivian’s product is very strong, other players like Tesla and Ford also have convincing electric trucks in sight, and demand is stronger. -binding reservations for your next F-150 electric truck. By comparison, Rivian had about 71,000 pre-orders in mid-December.
Also, as we’ve already pointed out, increasing production isn’t simple for automotive startups like Rivian. In perspective, Tesla’s inventory experienced drops of nearly 50% in 2019 when it faced ramp issues and liquidity issues. While we’re not saying Rivian may not succeed with its accelerated production, there will likely be maximum issues along the way, and we may see even more access stuff for inventory in the coming years.
Do you need to be exposed to the electrification of the automotive industry, without opting for individual brands of electric vehicles?Check out our EV Component Supplier Inventory for a list of corporations that can take advantage of the wonderful EV transition. See also our automotive inventory stock topic, which includes classic car manufacturers and natural electric vehicle stocks.
Below is our previous Rivian inventory policy, where you can see our vision over time.
[14/12/2021] What’s going on with Rivian Stock?
Electric pickup startup Rivian went public in early November and is lately trading at around $119 in line with the stock, marking an increase of about 50% from its IPO price. So what are some of the recent advances driving Rivian’s inventory?
The quiet and steady period in Rivian’s stock after its initial public offering recently expired, meaning analysts are now free to evaluate the stock and most brokerage houses appear to be bullish, with the average value target at around $134 per share, about 13% ahead of the stock. existing value in the market. In addition, Rivian’s R1T pickup won the 2022 MotorTrend Truck of the Year award, which is considered one of the most coveted awards in the automotive industry. The publication called the cars “the most remarkable van” he has ever driven. while praising Rivian for its engineering excellence. There have also been some negative expansions. In mid-November, Rivian and Ford announced that they no longer plan to jointly expand electric cars. is pronounced, given that corporate is still in the early stages of growth.
So what’s our take on Rivian’s inventory? We remain cautious with Rivian. While the company has a lot going for it, adding a strong product serving one of the auto industry’s most successful segments and a major flagship customer of Amazon, which has ordered 100,000 delivery vans with Rivian to deliver through 2030, we Rivian’s current valuation is very risky. Ramping up production is rarely very simple for young auto companies, and we’ve seen this in the case of Tesla as well. While we’re not saying that Rivian may not be successful with her ramp, there will likely be some hiccups along the way, and we may see more inventory access issues in the years to come. Plus, there may be less expensive tactics to play into the electric pickup space. For example, Ford’s inventory, which is valued at around $82 billion (compared to Rivian’s $100 billion), has big EV ambitions and initial interest in its new F-150 lightning EV has been incredibly strong, with the company seeing around 200,000 bookings. , compared to around 55,000 Rivian pre-orders. Ford trucks will likely have greater logo loyalty, and the company also has a proven production history.
Do you need to be exposed to the electrification of the automotive industry, without opting for individual brands of electric vehicles?Check out our EV Component Supplier Inventory for a list of corporations that can take advantage of the wonderful EV transition.
[11/08/2021] Avoid Rivian’s IPO. Do you bet on electric vehicle suppliers?
Electric pickup starter Rivian is looking to raise about $10 billion through its IPO this week, with its stock priced at $72 to $74, according to its most recent filing with the SEC, valuing the company at more than $60 billion. Smart bet for investors? We don’t believe it. While ev stocks are the most dynamic game in the existing market, given the urgency of fighting weather replacement and the strong returns provided through Tesla, Rivian’s stock isn’t worth making an investment at the requested price. Let’s take a closer look at Rivian’s actions. business to see why.
Rivian has some advantages. It has some initial name investors, including Amazon, which has a stake of more than 20%, and Ford. The company has two cars in its lineup, and adds the R1T pickup and R1S SUV, which will cater to the maximum lucrative. segments of the automotive market. SUVs and crossovers count as the most popular vehicle structure taste in the United States, while pickups have some of the widest margins. In addition, the company is also preparing a delivery van for Amazon, which plans to deploy around 10,000 vans by 2022 and 100,000 vans by 2030.
However, we have multiple considerations about making an investment in the initial public offering. First, it is not clear what the competitive merit of the company is. Tesla, for example, has been innovating on the battery, autonomous driving and software fronts while ramping up production capacity relatively quickly. Competition in the electric truck market is also expected to intensify. For example, Tesla, which has so far focused largely on luxury cars and SUVs, is looking to enter the pickup truck market with its Cybertruck entering production starting in 2022. Orders are expected to start in around $40,000 compared to Rivian’s offering, which will start at a much higher value of $67,500. Ford will also make an electric edition of its F-150 pickup, America’s best-selling car, and initial demand for the vehicle has also been strong. Presumably, consumers will have several more electric trucks and SUVs to choose from in the coming years. The $60 billion-plus valuations Rivian is seeking are ahead of established automakers like Honda and come from Ford’s market-place capitalization of around $70 billion. This comes despite the fact that the company only started producing its cars a few months ago and expects deliveries of just 1,025 this year. There’s too much worthwhile threat to inventory at those levels, in our opinion.
While electric cars are the future, making an investment in EV stocks is tricky right now, given the higher valuations of natural EV stocks and the relatively low barriers to accessing the EV market, which sees a multitude of new entrants vying to share. The moves of ev suppliers, on the other hand, deserve to be a safer way to play the broader electrification of the automotive industry, without having to decide on individual OEM stocks. See our topic EV Component Supplier Inventory for more details.
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