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Should You Buy Rivian Stock While It's Below $14.50?
RIVNRivian Automotive(RIVN) The Motley Fool·2025-02-22 23:24

Core Viewpoint - Rivian has significant growth potential in the long term, with projections indicating it could become a major player in the electric vehicle (EV) market, similar to Tesla [1][10]. Sales and Financial Performance - Rivian's sales reached 5billionlastyear,butthecompanyremainsunprofitableduetohighcostsassociatedwithvehicledesign,manufacturing,andshipping[3].−Thecompany′smarketcaphasdecreasedfromover5 billion last year, but the company remains unprofitable due to high costs associated with vehicle design, manufacturing, and shipping [3]. - The company's market cap has decreased from over 100 billion in 2021 to approximately 14billion,complicatingitsabilitytoraisecapital[4].−Rivian′sstockiscurrentlyvaluedatjust3timessales,astarkcontrasttoTesla′svaluationof12.7timessales[5].RecentDevelopments−Rivianannouncedaquarterlygrossprofitof14 billion, complicating its ability to raise capital [4]. - Rivian's stock is currently valued at just 3 times sales, a stark contrast to Tesla's valuation of 12.7 times sales [5]. Recent Developments - Rivian announced a quarterly gross profit of 170 million, marking a significant achievement for the company [6]. - The CEO highlighted a reduction of 31,000inautomotivecostofgoodssoldpervehicledeliveredinQ42024comparedtoQ42023,emphasizingcostefficiencyascrucialfortheupcomingR2vehiclelaunch[7].FutureGrowthProspects−Rivianplanstolaunchthreenewmass−marketvehicles(R2,R3,andR3X)in2026,allpricedbelow31,000 in automotive cost of goods sold per vehicle delivered in Q4 2024 compared to Q4 2023, emphasizing cost efficiency as crucial for the upcoming R2 vehicle launch [7]. Future Growth Prospects - Rivian plans to launch three new mass-market vehicles (R2, R3, and R3X) in 2026, all priced below 50,000, which is expected to significantly expand its sales base [8]. - The introduction of mass-market vehicles has historically driven substantial growth for companies like Tesla, suggesting a similar trajectory for Rivian [9]. - With positive gross margins achieved, Rivian is expected to improve its access to equity and debt markets, facilitating the launch of its mass-market vehicles [10].