A Financial Expert Predicts Rivian's Share Price Reaching $23. Is it Wise to Purchase Shares at Nearly $10.50?
Investors showcased a variety of responses when Rivian Automotive (RIVN) -3.91% shared their third-quarter figures last week. The financial report was below expectations, featuring a decrease in revenue and an increase in losses. However, the electric vehicle startup remained confident in meeting their annual delivery targets, despite recent challenges affecting production and finances due to supply chain problems.
Post-analysis, one Wall Street analyst suggested that the ambiguous results should encourage investors to purchase Rivian shares right now. Canaccord Genuity analyst George Gianarikas labeled the report as "chaotic," yet indicated that not all news was negative. He highlighted the favorable aspects as being most significant for investors currently, and even more favorable developments came from Rivian following the release of their results.
A real path to profitability
Rivian has been curbing its escalation in production rate due to numerous factors. They are refurbishing to ready their manufacturing facility for the production of the next-generation electric vehicle platform in the upcoming year. More recently, they attributed a slowdown in production to a part supply issue.
The same analyst still advocated for purchasing the stock according to reports, stating, "Surprisingly, management reiterated that it expects to attain a positive gross margin in the fourth quarter." Despite lowering his price target for the stock to $23, Gianarikas still sees value in it at that price. This would translate to over a 100% increase from the current prices within the next 12 months.
Rivian retained their production forecast for the year and anticipates achieving a positive gross margin in the current quarter, strengthening the bullish argument.
After releasing the report, Rivian provided investors with even brighter prospects. They finalized a previously agreed-upon arrangement with Volkswagen (VWAGY) -0.80%. This global automaker will be directly investing in Rivian, and the companies are teaming up to create an electric vehicle technology joint venture. The deal was worth $5.8 billion, which surpassed the initial estimated value of $5 billion.
This partnership points to a positive outlook for Rivian's future growth, making the recommendation to buy the stock here a well-reasoned one.
In light of the partnership with Volkswagen, the investment analyst's recommendation to buy Rivian stocks appears well-founded, as this collaboration could significantly contribute to Rivian's future growth in the finance and investing landscape. Additionally, the company's anticipation of achieving a positive gross margin in the current quarter further strengthens the bullish argument for potential investors interested in the realm of money and investing.
