EV startup Rivian Automotive, Inc. RIVN went public in early November by offering 153 million shares at $78 a share, giving it a massive initial public offering valuation of over $100 billion.
Founded in 2009, Rivian entered the EV market with a five-passenger pickup truck, R1T, and started deliveries in September this year. Rivian has beaten every other company that is launching an all-electric pick-up truck, and that’s one reason behind investors’ enthusiasm. As of Oct. 31, Rivian has delivered 156 R1Ts. The model’s price starts at $67,500.
In December, Rivian plans to launch its next model, the R1S, a seven-passenger SUV. The R1S starts at $70,000. By the end of 2021, the company plans to deliver around 1,000 R1Ts and 15 R1Ss.
Following the expiry of the IPO quiet period, Wedbush analyst Daniel Ives initiated coverage of Rivian shares with an Outperform rating. He is giving a $130 price target, suggesting a roughly 25% upside from current levels.
Rivian Automotive last week sent out emails telling reservation holders to expect deliveries of their R1T electric pickup trucks and R1S electric SUVs beginning in March, according to postings on the Rivian Forums enthusiast website.
Rivian Automotive is a “stalwart EV startup” focusing on redefining the sports utility vehicle with its innovative R1S and R1T models, analyst Ives said. The company is looking to strategically launch itself into an untapped market as SUV/ pickup truck EVs are virtually nonexistent in the EV market today, he added.
Responses to an online Rivian Forums poll indicate that deliveries of Launch Edition vehicles may be evenly divided among three delivery windows: March-April, April-May, and May-June.
Should one buy Rivian?
Rivian Automotive’s (NASDAQ: RIVN) management deserves praise for listing RIVN stock at the perfect moment as the stock shot to $180.
Despite the drop, RIVN stock could see ~ $180 again. If investors look at what brought the stock there in the first place Rivian management’s celebration proved short-lived. The next day after the peak, sellers emerged.
Although Rivian stock has fallen significantly from its high of over $170, it is still valued loftily. Rivian doesn’t have a head start, with so many competitive offerings lined up in the coming months. How Rivian’s pickup trucks will differentiate from upcoming competing models isn’t clear yet. In the absence of differentiation, it might be difficult for Rivian to carve a place for itself in the competitive EV space.
Rivian shares are relying on buying momentum to rebound. It will need to solve its supply problems and build over 10,000 EV units. The firm needs to carve a moat in the Truck EV market.
It offers a nice design and has brand recognition. It could potentially out-flank Ford, too. Ford’s F-150 may have production delays, quality issues, and recalls that slow sales. This would give Rivian a chance to prove that it deserves a richer valuation.
