Rivian (NASDAQ:RIVN) has enjoyed an excellent week, even as momentum from yesterday’s news slowly begins to subside. Shares skyrocketed yesterday after Volkswagen (OTCMKTS:VWAGY) announced plans to make a significant gradual investment in the electric truck maker. This sparked a rally for many other EV producers, but today, RIVN stock is in the news with another positive update.
Today marked Rivian’s annual Investor Day, and on it, Rivian affirmed its production forecast for the year, signaling that things are expected to go well for the remainder of 2024. This development positions the company to close out this week in an excellent position.
What’s Happening With RIVN Stock
Even in the face of this news, trading has been fairly volatile for Rivian today. As of this writing, shares are down 2% on the day, and they have struggled to garner momentum after markets opened. But even with this turbulence, RIVN stock is still up more than 40% for the week, demonstrating that even after a difficult month, the startup is still able to continue making gradual progress.
Now that Rivian is on track to meet its production goals for the year, investors have even more reason to be optimistic that a turnaround is imminent. After speculation about Rivian’s potentially bleak long-term prospects, this development should be reassuring to the more skeptical investors. As Seeking Alpha reports:
“The company published some investor slides ahead of the event that indicated it was reaffirming guidance of 57,000 units of production for 2024. For Q2, production of 9.1K to 9.3K units is anticipated, and a deliveries tally of 13.0K to 13.3K units is expected.
Looking ahead, Rivian Automotive (RIVN) said the Gen 2 model introduction, combined with commercial cost downs and commodity tailwinds, is expected to reduce material cost by ~20%. Rivian (RIVN) also said it is on a path to positive gross profit in Q4 and positive adjusted EBITDA in 2027. A long-term financial target is for ~25% GAAP gross margin and a ~10% free cash flow margin.”
Given how far it has fallen over the past two quarters, RIVN stock isn’t out of the woods yet. However, the company’s positive projections indicate that a slow turnaround has already begun, especially with the cash infusion coming from Volkswagen.
Why It Matters
If Rivian is indeed beginning its gradual climb back to the top of the EV market, its current low price will be tempting for investors with some patience. The last few days have seen Wall Street sentiment significantly improve as well, as multiple analysts have issued bullish takes on RIVN stock. Both Daniel Ives of Wedbush Securities and Andres Sheppard of Cantor Fitzgerald have raised their price targets and maintained positive ratings. While Rivian still holds only a “moderate buy consensus” on TipRanks, 12 out of 23 analysts still rate it as a “buy.”
If Rivian can indeed meet its production forecasts, there will be nothing stopping it from continuing its slow climb upward and regaining the ground it lost in the first half of 2024. Plenty of smaller EV stocks still appear highly questionable, but Rivian is well-positioned to continue leading a market resurgence.
On the date of publication, Samuel O’Brient did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
