Did Rivian Stock Finally Bottom?

Core Viewpoint - The electric vehicle (EV) sector, particularly Rivian Automotive, is experiencing a potential turnaround after a significant downturn, with Rivian's stock showing signs of recovery despite ongoing unprofitability [1][2]. Company Overview - Rivian remains unprofitable but has substantial backing and plans to expand its manufacturing capabilities throughout the decade [2][8]. - The current stock price is approximately $15 per share, having rebounded from previous lows, but it has remained in a similar trading range since late 2022 [2][10]. Product and Market Position - Rivian launched its R1 models in 2022, which include a premium SUV and truck, alongside commercial delivery vans for clients like Amazon [2][3]. - The R1 models are well-received but have not achieved widespread adoption due to their high price points, starting at $75,000 [3][4]. - Quarterly deliveries peaked in 2023 but have since declined, with Rivian delivering just over 10,000 vehicles in the last quarter, indicating a small market presence [3][5]. Expansion Plans - To address delivery challenges, Rivian is expanding its Illinois factory and has begun construction on a new facility in Georgia, aimed at producing more affordable R2 and R3 models [4][5]. - Achieving scale is crucial for profitability, as competitors like Tesla only became profitable after reaching significant delivery volumes [5][10]. Financial Projections - Rivian's current revenue stands at $5 billion, with potential growth in quarterly deliveries to over 50,000 if R2 and R3 production scales successfully [7][10]. - This could lead to projected annual revenue of around $20 billion and net earnings of approximately $1 billion by the end of the decade, assuming a profit margin between 0% and 10% [7][10]. Valuation Insights - Rivian's market capitalization is currently $17.7 billion, and traditional valuation methods based on earnings or cash flow are not applicable due to negative figures [6][8]. - If Rivian can successfully scale production and achieve positive earnings, it may improve its financial standing significantly [8][10].