RIVIAN AUTOMOTIVE
START - $14.84 | FINISH - $17.37
- HORIZON: 4 months
- FROM 12-12-2024 | UNTIL 12-04-2025
- MANAGEMENT ASSESSMENT: 17.05% growth
- RECOMMENDATION: BUY
TRADING PLAN
Buy Rivian Automotive shares from the $14.84 level with a target of $17.37 for a maximum period of 4 months.
WHY THESE SHARES HAVE POTENTIAL FOR PROFIT
- Recent Earnings: Rivian reported Q3 revenue of $874 million, below the $1 billion estimate. However, key positives from the report include the production of 13 157 vehicles, deliveries of 10 018 units, and reduced operating expenses year-over-year, from $777 million to $963 million. A supply deal with LG Energy Solutions signals growth opportunities despite short-term profitability challenges.
- Strong Position in the EV Market: Rivian is positioned to benefit from the global push for sustainability, with a focus on adventure and utility EVs (electric vehicles), targeting underserved market segments. The EV market is projected to grow 23.1% from 2023 to 2030.
- Strategic Partnerships: Rivian’s backing from Amazon and its significant order for electric delivery vans, along with its acclaimed R1T truck and R1S SUV showcase its unique value proposition and market credibility.
- ESG Appeal: Rivian’s technology, manufacturing capabilities, and alignment with ESG trends strengthen its position, while plans to monetize software and subscription services offer promising long-term revenue growth.
INDICATOR
The company’s balance sheet metrics:
- Rivian has $14.26B in total assets and $5.9B in total equity.
- Cash on hand is $6.74B.
- Debt/Equity ratio is 0.99.
- Total liabilities are $8.36B.
RISKS
1. Rivian’s high capital expenditures are essential for scaling production and developing new vehicles, but they force the company to continually raise funds, resulting in ongoing losses. The company’s ability to manage cash flow and convert investments into profitability will be crucial for its long-term sustainability.
2. Rivian faces supply chain risks related to sourcing critical components like batteries and microchips, which could impact production and profitability.
3. Rivian’s partnership with Amazon, which includes a large order of electric delivery vans, provides steady revenue but also exposes the company to risks from overreliance on a few large clients. Any changes in Amazon’s strategy, delays, or shifts in demand could negatively impact Rivian’s financial performance and limit its ability to diversify revenue streams.
Disclaimer:
*Any opinions, views, analysis or other information provided in this article is provided by BCS Markets SA trading as BROKSTOCK as general market commentary and should not be viewed as advice according to the FAIS Act of 2002. BCS Markets SA does not warrant the correctness, accuracy, timeliness, reliability or completeness of any information provided by third parties. You must rely upon your judgement in all aspects of your investment decisions and all decisions are made at your own risk. BCS Markets SA and any of its employees shall not be responsible for and will not accept any liability for any direct or indirect loss including without limitation any loss of profit which may arise directly or indirectly from use of the market commentary. The content contained within the article is subject to change at any time without notice. BCS Markets SA is an authorised financial services provider FSP No. 51404.
** This article was prepared by BROKSTOCK analyst Maboko Seabi
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