Rivian (RIVN) Price Prediction and Forecast

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Electric vehicle maker Rivian Automotive ( NASDAQ: RIVN ) IPO'ed in November 2021 and immediately made a splash with its stock price skyrocketing to $180 in just its first week trading.

The cash infusion was a much needed lifeline for Rivian, with $3.7 billion in operating expenses in 2021 and only delivering 920 vehicles. The company also had backers in Amazon ( NASDAQ: AMZN ) and Ford ( NYSE:F ) , who held 260 million shares of Rivian collectively at IPO.

But as the covid lockdown investing frenzy died out, it left a SUV sized hole the Rivian's stock price , currently trading for $16.58 per share. Down 78.74% since its IPO 3 years earlier.

24/7 Wall Street aims to provide readers our assumptions about the stocks prospects going forward and what growth we see in Rivian for the next several years and what our best estimates are for Rivian's stock price each year through 2030.

The following is a table of Rivian's revenues, operating income and share price for the first few years as a public company.

Here's a table summarizing performance in share price, revenues, and profits (net income) from 2014 to 2018.

Revenue and net income in $millions

Now lets take a look at Tesla the first few years it manufactured and sold the Model S (the official launch of the Model S was June 22, 2012).

While revenue growth for both firms after launching their first mass market vehicles are similar, Tesla's operating expenses where much more favorable, particularly around SG&A and R&D expenses.

Elon Musk, Tesla's CEO,  has always been a proponent of word-of-mouth marketing and hawkish approach to minimizing product costs, allowing his company to stay afloat while moving to new lines of automobiles.

The biggest question facing Rivian investors today is can they lower costs and when will positive net income be realized?

• EV Technology and Cost Curves :  Rivian's next generation (G2) R1 vehicles are designed for performance upgrades while at the same time reducing component costs. For example, the number of electronic components will be reduced by 60%, over 60 parts will be eliminated, compact motor redesign and close to 2000 connections or welds will be removed. These changes alone are expected to drop materials costs by 20% and speed up the assembly line by 30%. Looking into the back half of 2026, Rivian sees material cost reduction of 45% for the R2 line of vehicles. Rivian is also investing into enhanced advanced driver assistance systems with improved cameras, radar and NVIDIA powered computing power, creating highway assist and 360-degree visibility.
• Electric Vehicle Demand and Incentives: Rivian is currently delivering around 13 thousand vehicles per quarter, which was above analyst estimates and producing 9 thousand new G2 vehicles per quarter, which keeps it on pace to produce 57,000 units in 2024. Total plant capacity is 215,000 vehicles with expansion plans of 400,000 additional vehicles in Georgia.
• Managements Path to Profits: Rivian also expects profitability from the R1 platform through premium configurations and scale benefits. The company targets positive adjusted EBITDA by 2027, with long-term goals of 25%  gross margin, high teens adjusted EBITDA margin, and 10% FCF margin
  • Material cost Reduction : Introduction of the Gen 2 platform and commercial cost downs are expected to reduce material costs by ~20%.
  • Fixed Cost Reduction : Improved labor and overhead costs, reduced depreciation, and lower LCNRV charges due to a 30% increase in production line rate and design changes.
  • Increased Revenue from Credits: Strong demand for regulatory credits, with over $200 million contracted for FY24.

Taking a historic look at pricing Rivian stock would start by comparing sales multiples Tesla received in 2012 to 2015 when the Model S scaled. Tesla was feeling the weight of expansion and keeping its debt load manageable and the market priced Tesla stock close to 10x sales.

While Rivian is in a similar situation, albeit with more debt and higher expanses, the market is only valuing the stock at under 3 times sales. Lets take a look at why that is the case.

• Market Position and Brand Recognition :
  • Tesla : By 2011-2015, Tesla had already established itself as a leading innovator in the electric vehicle (EV) market, with significant brand recognition and a first-mover advantage.
  • Rivian : Rivian is relatively new to the market and still building its brand and market position.
• Production and Sales Volumes :
  • Tesla : During 2011-2015, Tesla was ramping up production and sales, particularly with the Model S, which was gaining popularity and market traction.
  • Rivian : Rivian is still in the early stages of production, with limited sales volumes compared to Tesla's growth phase.
• Investor Expectations and Sentiment :
  • Tesla : Investors had high expectations for Tesla's future growth and disruptive potential in the auto industry, leading to higher valuation multiples.
  • Rivian : While Rivian has potential, it has not yet demonstrated the same level of market disruption or growth trajectory that Tesla did during its comparable early years.
• Competitive Landscape :
  • Tesla : Had fewer direct competitors in the EV space during its early years, allowing for a larger market share and higher investor confidence.
  • Rivian : Faces more competition from established automakers entering the EV market and other new entrants, impacting its relative valuation.

Revenue in $millions

Rivian Price Forecast and Prediction for 2024: Wall Street analysts have Rivian's stock price over the next year to be $17.54 which gives the stock a 5.79% upside over today's price. Of the 28 analysts covering the stock, the consensus recommendation is a 2.1 'Outperform' Score.

Rivian Price Forecast and Prediction for 2025 : We expect to see strong revenue growth of 60% for the year and a price to sales multiple of 2x, which puts our price target at $21.82.

Rivian Price Forecast and Prediction for 2026: We estimate the price to be $33.72, with another strong 50%+ revenue bump. However, with EBITDA still well in the negative, we see the market not rewarding the stock as much and giving it a lower valuation multiple.

Rivian Price Forecast and Prediction for 2027: We expect the stock price increase to leap forward to $64.30 with another strong 50%+ revenue growth year-over-year. That is a 97% year-over-year gain and up 287.82% from today’s stock price.

Rivian Price Forecast and Prediction for 2028: We expect Rivian's P/S ratio in 2028 to be 2.5x and top line growth of 50%. In 2028, we have Rivian's revenue coming in around $25 billion, suggesting a stock price estimate at $95.00 or a gain of 472.98% over the current stock price.

Rivian Price Forecast and Prediction for 2029 : 24/7 Wall Street expects Rivian's stock to continue its revenue growth and to generate $37 billion in revenue. The stock price in 2029 is estimated at $127.00, or a gain of 665.98% over today’s price.

Rivian Price Forecast and Prediction for 2030 : We estimate Rivian's stock price to be $140.00 per share. Our estimated stock price will be 744.39% higher than the current stock price of $16.58.

Recent Rivian Stock Updates and News

7/12/2024

Mizuho analysts raised the price target for Rivian today to $15 from its previous price target of $11 and keeps the "Neutral" rating on the stock. Mizuho was impressed with June vehicle deliveries and the firm adjusted the price target to reflect a better balance sheet and reducing some liquidity risk.

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