RIVN: Should I buy it or not buy it? That's my idea! It's my opinion!
Recently, $Rivian Automotive(RIVN.US$ There has been a lot of discussion about it, and opinions are divided between supporters and skeptics. Some people compare RIVN to Tesla. Analyst Gary Black suggests that “today's RIVN is like 2019's TSLA.” Let's analyze the strengths and weaknesses of RIVN as we know it.
positive factors
The main factor is Volkswagen's recent $5 billion investment, which has greatly increased liquidity.
Other important considerations:
Strong balance sheet with $7.9 billion in cash/investments as of Q1 2024
New plant under construction + tax incentives for existing facilities
Loving feelings for trucks and vans and a very loyal fan base
Research and development in Serbia, cost reduction
Migrating to the base platform+add-on model
The number of reservations for the new R2 model exceeds the number of units produced per year
Possibility of expanding partnerships.
There is a possibility that the stock price will rise to the range of 20 to 25 dollars due to gross profit expected by the end of the year
Assessment and Analyst Perspectives
The current P/S ratio is 1.8 times, which is below the 3-year average of 3.0 times.
12-month average price targets from 23 analysts:$14.52(range $8-21)
conclusions
Rivian's profile has improved significantly, and previous concerns have been addressed. Investing in Volkswagen is a breakthrough in risk reduction. However, free cash flow for the first quarter of 2024 was negative by $1.5 billion, and cashburn remains a concern. The new investment will extend the runway for 8 to 9 quarters, reducing immediate financial pressure.
I intend to keep a close eye on Rivian's performance and how he deals with challenges from China's rivals in particular.
What do you think about RIVN? Will you buy it, keep it, or don't touch it?
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
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