Rivian stock is trading at an all-time low. Should I buy the dip? (NASDAQ: RIVN)
Less than six months after its spectacular market debut, electric vehicle manufacturer Rivian (NASDAQ:RIVN) is trading at a historically low level, despite Wall Street analysts still rate the stock as a buy. Should you buy the dip or stay away?
From Darling’s IPO to New Low
Since January, Rivian’s stock has plunged 58%, far more than its US peers. In comparison, Lucid (LCID) fell 33%, Fisker (FSR) 23% and Tesla 13%. The S&P 500 index slipped 6%.
That said, Rivian also fell from a high perch. Shares of Rivian soared after its November 10 IPO. The stock went public at $78 per share in a deal that raised nearly $12 billion and gave Rivian a market capitalization of around $67 billion. Backers of Rivian, which has focused on building “adventure” electric vehicles like pickup trucks and sport utility vehicles, include Amazon and Ford.
Buyers stepped in immediately after the title’s debut. RIVN hit a 52-week high of $179.47 on November 26, but turned around from there. The stock has since fallen to a 52-week low of $33.46 on March 15.
Stocks were particularly hurt by the company’s fourth-quarter earnings report on March 10, which fell short of expectations.
Investors were also spooked by news that the company now expects to ship 25,000 vehicles in 2022, significantly lower than the roughly 40,000 forecast by analysts. Rivian management attributed the shortfall largely to ongoing supply chain issues for parts such as semiconductors. For the year 2021, the company said it produced 1,015 vehicles and delivered 920.
A few days later, on March 14, Rivian announced that it had hired top automotive executive Frank Klein as its new chief operating officer. Klein was most recently chairman of Magna Steyr, the Austrian unit of contract car manufacturing giant Magna International (MGA), which counts rival Rivian Fisker among its clients. Despite the announcement, Rivian shares hit an all-time low on March 15.
Is RIVN a buy?
Wall Street analysts, on average, still rate the stock as a buy. Of the 15 analysts tracked by SA, seven rated the stock a strong buy, four a buy, four a hold, and none rated it a sell. SA authors, on the other hand, rate the stock as Sell, on average.
In notes released after the company’s fourth-quarter results, analysts said while they were somewhat surprised by the size of Rivian’s production shortfall, they remained optimistic about its future.
“Despite what appears to be a tougher-than-initially expected 2022, our buy rating on RIVN is based on our view that the company is one of the most viable among early-stage automakers and also a relative threat to incumbent automakers,” wrote BofA Securities analysts, who maintained their buy rating on the $140 stock and price target.
Meanwhile, Barclays analysts maintained their Equal Weight rating while lowering their price target from $47 to $42.
“Rivian’s differentiated, adventure-centric consumer brand makes it unique in the electric vehicle market and provides a solid foundation for recurring revenue,” Barclays analysts wrote. “We are convinced that RIVN can become a major multi-product OEM. As much of this is already priced in, we have equal weight in the shares. »
Piper Sandler analysts were also bullish, maintaining their overweight rating while reducing their price target to $130 from $148.
“Rivian’s backlog and order rates are resilient, despite price increases, and without supply chain hitches, Rivian would be able to build 50,000 units this year,” Piper analysts wrote. . “Bottom line: Supply chain issues are temporary; they are not a reason to sell the stock.
Wedbush analysts, however, were more pessimistic, reducing their price target to $60 from $130, while maintaining their outperform rating.
“Since its IPO in late 2021, Rivian’s story has been a bad episode out of the twilight zone for the street,” Wedbush analysts wrote. “This visionary EV pickup/sport utility story must start its performance engines in 2022, or competition from Ford, GM, Tesla and more will prey on its potential EV customer base through 2023. “
For a more bullish view of Rivian, read “Rivian Stock Forecast: Where Is It Heading in 2022?” from JR Research, SA contributor. For a bearish view, turn to “Avoid Rivian Until EV Automaker Can Address Manufacturing, Supply Chain Hassles” by SA contributor Doron Levin.