Rivian Automotive Inc (NASDAQ: RIVN) has already gained some 40% since its year-to-date low but a Guggenheim analyst is convinced it’s not too late to invest in it yet.
Shares of the EV firm are still down about 45% versus the start of 2024.
Rivian stock could climb to $18
Ronald Jewsikow assumed coverage of the electric vehicles company this morning with a “buy” rating. His $18 price objective suggests more than a 50% upside from here.
The analyst is bullish on Rivian stock as he expects the R2/R3 optimism to serve as a catalyst moving forward. His research note reads:
We see a credible path to breakeven gross margin in 4Q24, informed by a detailed margin build and encouraging updates surrounding the 2025 model year R1 lineup.
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Why else is he bullish on RIVN shares?
Ronald Jewsikow expects Rivian Automotive to lower cash burn in the coming quarters that, he added, will remove a near-term overhang from its shares.
The Guggenheim analyst agreed that the broader EV sentiment is still negative.
Still, he recommended buying Rivian stock as it’s “uniquely positioned to demonstrate to a growing share of younger, digitally oriented consumers” that thoughtful design elements and software/technology can make an electric vehicle a superior product than an ICE vehicle.
RIVN has spent $12 billion on assembling and selling cars over the past two years which in turn has generated about $7.0 billion in sales. Rivian shares do not currently pay a dividend.
Rivian saw its revenue jump 82% in Q1
The Guggenheim analyst sees now as the suitable time to invest in Rivian shares as he expects the EV company to report a positive gross profit this year and generate positive EBITDA in 2026.
Our analysis of RIVN breakeven glidepath and R2/R3 economic potential leads us to the conclusion that it will emerge from EV winter as a market leader and advise clients to buy Rivian ahead of anticipated positive 2H inflection in result.
The bullish call on Rivian stock arrives more than a month after the Nasdaq-listed firm reported a better-than-expected 82% annualised growth in revenue to $1.20 billion for its fiscal first quarter.
At the time, Rivian Automotive did not, however, raise its production guidance for 2024. It continues to see production to be capped at about 57,000 vehicles this year – roughly the same as it did in 2023.
RIVN ended its recent quarter with just over $9.0 billion in total liquidity. RIVN shares traded at a high of $130 during the pandemic.
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