Rivian Stock Is Outrageously Cheap, but Does That Make It a Buy Now?

Core Viewpoint - Rivian shares are currently undervalued compared to other electric vehicle (EV) stocks, trading at a price-to-sales ratio of 2.9, significantly lower than Tesla's 15.8 and Lucid's 3.3, but this valuation gap is justified due to Rivian's stagnating growth and financial limitations [1][2][5]. Valuation Comparison - Rivian's current market capitalization is $19 billion, with a day's price range of $14.92 to $15.54 and a 52-week range of $10.36 to $22.69 [2]. - Rivian's gross margin is reported at -276.59%, indicating financial challenges [2]. - The valuation gap between Rivian and Tesla is substantial, and while relative valuation techniques are useful, they should be interpreted cautiously [2][4]. Growth Potential - Rivian's growth has stagnated, with previous high valuations (above a price-to-sales ratio of 8) corresponding to annual sales growth rates of over 50%, which have since flatlined [7]. - Analysts expect Rivian's sales growth to be conservative at 6% in 2026, despite the anticipated release of its first mass-market vehicle, the R2, which is expected to drive significant growth [10]. - The R2, along with two other models priced under $50,000, is projected to be released in 2026 and 2027, potentially leading to a surge in growth similar to Tesla's experience with its affordable models [9][10]. Competitive Landscape - Tesla maintains a significant advantage in capital and manufacturing capabilities, allowing it to invest heavily in growth opportunities, including autonomous and AI technologies [3][4]. - Rivian's efforts in self-driving technology and AI are promising, but it lacks the financial resources to compete with Tesla and major tech firms like Alphabet [4].