Rivian Automotive (NASDAQ:RIVN) is slowly losing its shine. Unlike rivals like Tesla (NASDAQ:TSLA) that have seen a boost from recent earnings, the outlook for Rivian stock is decidedly more mixed.
Despite its key partnership with Amazon (NASDAQ:AMZN), Rivian’s February 2024 report disappointed, leading to a significant stock price drop. In 2023, the company reported a whopping $5.7 billion operating loss and $5.4 net operating loss.
This has raised some concerns from its investors in terms of stability. Thus, selling RIVN stock may be a good choice now.
However, although there has been a recent stock price decline, Rivian offers promising long-term EV investment prospects.
Its unique focus on adventure-oriented EVs like the R1T sets it apart. With a strong $7 billion cash reserve, Rivian can still be well-positioned to overcome its challenges.
Analysts maintain optimism, with an average price target of $17.50, indicating a potential upside of nearly 100%. Let’s dive into whether this stock is a buy, sell or hold in this regard.
$5,000 Gas Car Trade-In Deal
To celebrate Earth Day, Rivian announced some trade-in discount deals with $5,000 off for customers to would trade in select gas vehicles. This includes their R1T or R1S models. Customers will also receive a one-year free charging on the Rivian Adventure Network on top of the $5,000 discount.
Rivian emailed to mark Earth Day, emphasizing their commitment to eco-friendly vehicles. The company introduced the Electric Upgrade Offer, granting up to $5,000 off on a new R1 when trading in select gas-powered cars. The offer includes one year of free charging on the Rivian Adventure Network (powered by 100% renewable energy).
This promotion is open to U.S. and Canadian residents purchasing or leasing an R1 between April 22 and June 30 and applies to specific R1 configurations.
Georgia EV Plant Confirmed, But Postponed
The EV company delayed construction but remains committed to building electric vehicles in Georgia. Despite the setback, Rivian introduced the R2, a smaller, more affordable electric SUV, and opted to start production at its Normal, IL facility instead of the planned $5B Georgia plant.
Rivian’s chief policy officer reiterated the company’s commitment to Georgia and its new plant in a response letter on April 18. The letter emphasized compliance with environmental regulations and ongoing coordination with the Georgia Environmental Protection Division.
While vertical construction is delayed, Rivian will maintain the site, aiming to be ready to start construction once the pause is lifted. Rivian pledged to provide continuous communication and updates to partners and the community throughout the process.
Partnership with MEVCO
MEVCO also recently partnered exclusively with Rivian to supply EVs to the mining sector, aiming for sustainable, efficient electric fleets. CEO Matt Cahir sees Rivian’s R1T as ideal for mining challenges, combining Rivian’s tech with MEVCO’s expertise for top-tier mining vehicles.
The shift to electric solutions offers safety benefits, especially in underground mines. Rivian R1T, known for safety and off-road abilities, earned top safety awards. Dagan Mishoulam, Rivian VP, is pleased MEVCO chose Rivian to electrify its fleet.
Analysts Downgrade RIVN Stock
Rivian continues its winning streak despite mixed Wall Street sentiments. Following Barclays’ (NYSE:BCS) downgrade last week, JPMorgan (NYSE:JPM) also reduced its RIVN stock price target from $11 to $10 per share.
Despite market volatility in recent days, Rivian has shown resilience, rallying and entering positive territory in premarket trading, driven by Tesla’s recent announcements.
While the increase is marginal, with RIVN stock up by 0.87% as of writing, it’s notable given recent downgrades from major Wall Street firms.
Bottom Line on Rivian Stock
Despite recent challenges, Rivian still maintains a positive outlook. The stock has a decline of more than 50% over the past six months, suggesting the market disagrees.
Accordingly, with Rivian also announcing additional layoffs, reducing 1% of its workforce, the outlook for this stock remains uncertain. JPMorgan, although still optimistic for Rivian, changed their price targets to $9 per share.
Investors are losing patience with Rivian stock, unsure of its bottom. Investing in Rivian relies on faith in its innovation, R2’s success, and a successful capital raise.
Rivian’s story highlights the importance of profitability in growth companies to avoid market backlash. In my view, it may be dangerous to take a bullish position in RIVN stock, with the above-mentioned factors likely to outweigh any positive developments with this company.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.