SUVs and pickups are among the most profitable segments of the consumer vehicle market, and Rivian’s vehicles are promising a leap in both durability and range per battery charge. Access to Rivian’s skateboard platform, which has a separate electric motor for each wheel, is a key motivation for Ford’s stake. For several years, Ford has had ambitious plans to increase capital spending on the development of electric vehicles, per Barron’s.
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- This latest leasing step is just a little more good news for the EV company that has so far avoided price wars and largely sidestepped a slowdown in production and deliveries.
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- For Bloomington-Normal residents, Rivian is one of the first publicly traded companies with a major local presence; you can’t buy stock in State Farm or Illinois State University.
- For example, it may not be worth the risk if you think you will need that money in less than five years.
- The downtime will impact two quarters (Q2 and Q3), but Q4 will become the “run rate potential for the business.” Rivian will ramp up both R1 and commercial volumes.
While earning his doctorate at MIT, Scaringe worked with top engineers from major automakers at the prestigious Sloan Automotive Laboratory, per Bloomberg. After rebuilding vintage Porsches as a youth, Scaringe began dreaming of founding his own car company at age 18, the Times says. “I wanted to have an impact, and the highest-impact approach was to build the company myself,” he said, regarding his concerns about climate change and air pollution. Depending on the choice of battery pack, the Rivian R1S promises to deliver from 240 to 410 miles of driving between charges, per InsideEVs.com.
Rivian’s total book value, the difference between its assets and liabilities, was $5.5 billion as of June 30, 2021. Total cash and cash equivalents on the company’s balance sheet at the end of the June were $3.7 billion. Rivian said that it expects to generate most of its revenue in the near term from sales of vehicles, accessories, and regulatory credits.
If you see RIVN stock at $15 or $16, this it’s below all of the aforementioned price targets. To me, this suggests that the market has already priced in all of Rivian Automotive’s challenges and worst-case scenarios. Again, there’s a sense that investors are completely overlooking Rivian’s opportunities to grow and recover in 2024.
The company confidentially filed for an initial public offering on Aug 27, 2021 that valued the electric vehicle maker at around $80 billion, according to reports at the time. Back then, Rivian expected to have an initial public offering (IPO) as soon as mid-November, https://bigbostrade.com/ according to Bloomberg. It also hasn’t produced its electric vehicles in very high volumes yet. It’s not clear how quickly it can ramp up production, especially amid the global chip shortage and port constraints that have plagued automakers this year.
Earnings and Valuation
The IPO will generate more money for the company to invest in expanding its business. “Rivian’s products are not really meant to be work trucks,” counters Stephanie Brinley, principal automotive analyst with IHS Markit, per the Times. “They aim to be lifestyle products, capable but meant for recreational use,” she elaborated. 22 analysts have issued 1 year price targets for Rivian Automotive’s stock. On average, they anticipate the company’s stock price to reach $27.24 in the next twelve months.
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Some in Bloomington-Normal may feel compelled to buy some Rivian stock, given that local connection. Scaringe said he started the company 12 years ago by himself. Now Rivian has 9,500 employees, including over 3,400 in Normal.
Rivian’s 2023 production guidance appeared to be decent, but this turned out to be -20% below the market’s prior consensus forecast of 62,200 units. As such, it doesn’t come as a surprise that Rivian’s stock has performed poorly in recent times. Rivian stock will start trading on Nov. 10, but the exact time hasn’t been revealed yet.
There are some rules of thumb within the automotive industry. Some are well known, such as that trucks and SUVs are much more profitable than passenger cars. Another rule from the past is that while luxury vehicle sales accounted for between 10% and 20% of the market, they typically generate over one-third of profits — it varies among brands and how does forex work manufacturers. Founded in 1993, The Motley Fool is a financial services company dedicated to making the world smarter, happier, and richer. The Motley Fool reaches millions of people every month through our premium investing solutions, free guidance and market analysis on Fool.com, top-rated podcasts, and non-profit The Motley Fool Foundation.
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Rivian will make a trade-in offer during our online purchasing experience. We accept most makes and models of vehicles as trade-in, though some may require manual review. Rivian estimates that its net loss for the recent quarterly period was between $1.2 billion and $1.3 billion. Those quarterly losses were more than four times larger than the same quarter a year earlier.
Tesla’s IPO stock soared more than 40 percent on its first day of trading. Rivian IPO stock is scheduled to start trading under the “RIVN” ticker symbol on Nov. 10, 2021 but the exact timing hasn’t been disclosed. For Bloomington-Normal residents, Rivian is one of the first publicly traded companies with a major local presence; you can’t buy stock in State Farm or Illinois State University.
The company has been able to finance its operations primarily through the sale of securities and from borrowing. Rivian’s stock price recovered significantly through the first half of 2023, reaching a period high of $28.06 on July 27, 2023. However, momentum has subsequently reversed with a $1.5bn convertible green note received poorly by the financial markets, causing the share price to decline to a daily low of $15.88 on October 26, 2023. Rivian has been one of the few EV makers (or automakers in general) to avoid cutting prices. According to Rivian’s CEO, RJ Scaringe, new orders are driving up the average sales price (ASP) on its vehicles.