Rivian Stock Price Prediction 2025

The honor of the largest initial public offering of 2021 went to Rivian. It marked the most significant capital raise — $11.9 billion — of any U.S. company since Facebook’s public debut in 2012.

Unfortunately, the shareholder returns haven’t been as sweet. Could Rivian make a comeback, or is an investment in this stock dead money?

Learn: 5 Things You Must Do When Your Savings Reach $50,000

What Is Rivian?

Rivian is a U.S. electric vehicle manufacturer based in California. Right now, it sells its R1S SUV and R1T pickup truck. It also provides fleet services for vans, all of which run on the Rivian operating system, and sells branded accessories and ancillary services.

Will Rivian Be Successful?

Rivian has developed a unique brand targeted at adventurers and environmentally conscious consumers. It’s run by a mission-driven CEO, Robert Scaringe, whose overarching goal is to shift transportation to more environmentally friendly alternatives.

The company has built an ecosystem of products that could support a recurring revenue model in the future. It has a charging network and insurance services in addition to its core vehicles.

However, Rivian arguably doesn’t have a meaningful competitive advantage. It currently lacks the resources to produce vehicles at scale and faces heavy competition from rivals such as Ford and Tesla.

Is Rivian Stock a Buy, Sell or Hold?

Rivian, at its height, was a company worth more than $150 billion. Now, the company is valued at roughly $18.96 billion. Yet, it had nearly $14 billion in cash and equivalents as of Q3 2022. It must be a bargain, right? Not necessarily.

Burning Cash

Rivian is in a difficult situation because of its aggressive cash burn. The company is expected to burn through over $21 billion in cash through fiscal year 2025, and it spent $2.07 billion in Q3 2022 alone. Currently, there isn’t enough revenue growth to justify this spending, as the company posted revenue of just $536 million in sales in the quarter.

If Rivian continues to burn through cash so aggressively without seeing a massive increase in sales volume and production, it will continue to lose money. Its valuation and the stock price are likely to fall in tandem.

Production Difficulties Improving

Rivian management cited both inflationary pressures and supply chain issues as reasons for elevated costs and limited production — factors that may take some time to resolve.

But in Rivian’s Q3 2022 earnings release, the company maintained that it would reach its year-end target of producing 25,000 vehicles. And whereas it produced just 4,401 in the second quarter, according to the shareholders letter, in Q3 it increased production to 7,363 vehicles, 67% more than it produced in the same quarter in 2021.

Time will tell whether the improved production is enough to woo back investors. Billionaire George Soros, for example, sold millions of Rivian shares earlier this year and instead invested for the first time in rivals Tesla and Ford. While this could be just a diversification strategy, it doesn’t register as a vote of confidence for Rivian.

What Is the Forecast for Rivian Stock?

What are analysts saying about Rivian stock? A number of analysts have weighed in on its price.

The estimates range from a high of $70 to a low of $21.46, with a median 12-month price target of $46.22. Of the 20 polled analysts who follow the stock, 11 gave a strong buy or buy rating, five have hold ratings and two have underperform ratings, according to Yahoo Finance.

The Bull Case for Rivian

Rivian is one of the first manufacturers to deliver an all-electric pickup truck successfully. Given its first-mover advantage, it has the potential to capture a healthy chunk of the market as consumers transition to EVs. The company had 114,000 net pre-orders already lined up for R1s as of Nov. 7, plus an additional order of 100,000 electric vans from Amazon.

However, Rivian is a long way from fulfilling these deliveries.

The Bear Case for Rivian

Rivian continues to burn through cash at a rapid rate, and it had produced just 15,000 vehicles from the start of production through Sept. 30. Even if the company were to somehow reach its 25,000-vehicle target by the end of 2022, this is still very few compared to other companies in the automotive industry.

Tesla, for example, produced 365,923 vehicles in Q3 2022, while Ford sold nearly 4 million vehicles in 2021. In spite of all the excitement surrounding Rivian, the company still has to deal with real-world economics. If inflation and supply chain issues don’t allow the company to produce its product and generate revenue, it may run out of money before it can fulfill its promise.

Analyst Estimates for Rivian 2025

PandaForecast.com’s Rivian stock price prediction for 2025 is $15.23, down from $47.88 a month ago.

However, a multiple-year price target is essentially a guess, given market conditions, stock price volatility and an uncertain macroeconomic environment. These forecasts will be heavily revised over the coming years.

Over the next 12 months, the 18 analysts following the stock and offering year-out price targets have a wide range of opinions on the company. Forecasts range from a low of $21.46 to a high of $70, with an average forecast of $46.22.

Final Take

From its previous sky-high valuation, Rivian has taken a massive hit, as have many other hyped-up stocks from 2020 and 2021. Although the company shows some promise in the long term due to the inevitability of EV adoption, there are still a lot of red flags.

With shares down over 78% in 2022 alone, even those with a high risk tolerance should approach it cautiously.

FAQ

Here are answers to the questions people are asking about Rivian stock.

• What is Rivian's price target?

  • Rivian's price target is $46.22 as of Dec. 20, 2022. That's the median forecast among 16 analysts offering 12-month predictions.

• Can I buy Rivian stock now?

  • Yes. Rivian trades on Nasdaq. You can purchase shares through any stock brokerage or via an investment app, such as Robinhood.

David Granahan and Daria Uhlig contributed to the reporting for this article.

Information is accurate as of Dec. 20, 2022.

This article originally appeared on GOBankingRates.com: Rivian Stock Price Prediction 2025