Buy Or Fear Rivian Stock?
RIVN stock (NASDAQ: RIVN) surged by close to 8% in Friday’s trading, driven by a broad market rally after the head of the U.S. Federal Reserve hinted at potential rate cuts. Growth-focused stocks like Rivian are typically more sensitive to interest rate changes, and the news gave the EV maker’s shares a lift. The company also reported its second-quarter results, with revenues coming in at $1.30 billion, beating expectations. However, earnings missed the mark, with net losses of $0.97 per share. Production for the quarter stood at 5,979 units, down 37.8% from the same period in 2024 due to supply chain challenges and trade-related uncertainty. Deliveries were also weaker, falling 22.7% year-over-year to 10,661 units. That said, sales momentum improved in July, with U.S. volumes hitting a 10-month high at over 4,200 vehicles, representing a 20% increase compared to June.
Image by Gerd Altmann from Pixabay
Product Strategy and Partnerships
The long-term bull case for Rivian depends on its ability to scale beyond niche premium models and build strategic alliances to strengthen its technology and distribution reach. Rivian currently sells two high-end models, the R1T full-size electric pickup and the R1S full-size electric SUV, both priced above $70,000. Looking ahead, the company is targeting the mass market with its upcoming R2, a midsize lower-cost SUV slated for launch in 2026.
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Rivian is also deepening its strategic ties with Volkswagen through a joint venture aimed at integrating Rivian’s EV electrical architecture and software into future Volkswagen models by 2027. As part of this partnership, Volkswagen made a $1 billion equity investment in June, marking the first step in a planned $5.8 billion technology collaboration that pairs Rivian’s drivetrain expertise with Volkswagen’s manufacturing scale. See what can drive Rivian’s rival Tesla stock’s next surge.
Fundamentals and Risks
Rivian’s fundamentals present a mixed picture. On valuation, the stock looks moderately priced relative to the broader market, with a lower price-to-sales of 2.9x versus about 3.2x for the broader S&P 500. For more details see: RIVN Valuation Ratios Growth has been a bright spot, with revenues expanding at an average annual rate of nearly 184% over the past three years, well ahead of the S&P 500, though more recent growth has slowed to the low single-digits. Profitability, however, remains very weak, as Rivian continues to post steep operating and net losses with operating margins hovering near -70%. On the balance sheet side, financial stability looks pretty good. Rivian’s Debt was $6.3 billion at the end of the most recent quarter, while its current Market Cap is about $15 billion.
This implies a Debt-to-Equity Ratio of 41.9%. Cash-to-Assets Ratio is also reasonably strong at 48.1%. That said, Rivian has shown very weak resilience in downturns, with its stock plunging over 90% during the 2022 inflation shock and failing to meaningfully recover since. Overall, while Rivian demonstrates strong growth potential and solid liquidity, its ongoing losses and poor stock performance underscore significant risks. But the risk is not limited to major market crashes. Stocks fall even when markets are good – think events like earnings, business updates, outlook changes. Read RIVN Dip Buyer Analyses to see how the stock has recovered from sharp dips in the past.
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