The stock price of Rivian (NASDAQ: RIVN), known for its electric trucks and SUVs, has experienced a tumultuous journey since its initial public offering in November 2021.
Notably, RIVN has struggled over the past year, posting significant losses and failing to keep up with industry giants such as Tesla (NASDAQ: TSLA).
By press time, Rivian was trading at $12.69, down more than 2% since the last trading session. Over the past year, RIVN has plunged 21%, while the equity is down over 5% year-to-date.
Picks for you
RIVN stock path to $20
Rivian has mostly maintained its price above the $10 support level in recent months, with investors eyeing a potential climb to the $20 resistance zone.
However, achieving this target hinges on addressing challenges that have plagued the company since going public, with profitability ranking as a top priority.
The company is taking several strategic steps to boost profits, such as expanding its vehicle lineup and production capacity. For instance, introducing more affordable models like the R2, R3, and R3X aims to broaden market appeal, with R2 deliveries slated for 2026.
Additionally, a $6.6 billion loan from the U.S. Department of Energy will fund a new manufacturing facility in Georgia, expected to commence production in 2028. Until then, Rivian plans to ramp up output at its Illinois facility, which can produce up to 215,000 vehicles annually, including electric delivery vans for Amazon (NASDAQ: AMZN), one of its main customers.
Despite these efforts, Rivian faces significant financial hurdles. In the first three quarters of 2024, the company reported $3.2 billion in revenue but incurred a $4 billion operating loss.
With cash reserves declining from $7.9 billion to $5.4 billion in 2024, Rivian must carefully manage its resources.
However, its partnerships with Amazon and Volkswagen could position it to weather headwinds, offering immediate funding and long-term opportunities.
Rivian’s path to profitability
It’s worth noting that Rivian sought to establish profitability in the last quarter of 2024. In this context, the upcoming Q4 2024 earnings report, slated for February 20, 2025, will be a key focus for investors.
For the quarter, Rivian is projected to post $1.43 billion in Q4 2024 revenue, an 8.43% increase year-over-year. For 2024, analysts estimate $4.66 billion in revenue, up 5.12%, with 2025 growth accelerating to 10.89%, reaching $5.17 billion.
While short-term dips are expected in early 2025, long-term forecasts remain strong, with high-end estimates projecting $8 billion in revenue next year.
Another aspect to watch is the impact of the new Donald Trump administration, which is expected to roll back several EV subsidies initiated by the Joe Biden White House. In this case, Rivian, attempting to establish its market share, could struggle to maintain its position amid Tesla’s domination.
Meanwhile, the stock has experienced notable insider trading activity, which might dampen investor interest. Specifically, insider sales often signal a gloomy outlook for a company in the short term. This is particularly concerning given Rivian’s recent struggles in the stock market.
Wall Street’s take on RIVN stock price
Regarding RIVN’s next stock price target, a consensus of 22 Wall Street analysts at TipRanks gave the stock a “Moderate Buy” rating. Out of these, eight analysts issued a “Buy” recommendation, 12 advised “Hold,” and two recommended “Sell.”
The consensus 12-month price target for Rivian is $14.48, representing a potential upside of 14.83%. Analysts forecast a high price of $23 and a low target of $8.
Rivian’s climb to $20 in 2025 depends on overcoming financial challenges, expanding production, and leveraging key partnerships. While headwinds remain, strategic initiatives like new model launches and long-term growth prospects in the EV space keep the target within reach.
Featured image via Shutterstock
