Rivian stock forecast 2022: Will quarterly earnings restore hope in the stock?
Rivian stock forecast 2022 can be divided into two parts. One, just after its IPO and the other in long term. While the performance just after IPO is mainly driven by investors’ sentiments and hype created by media and various other factors, stock’s long-term performance can be attributed to its strong fundamentals and overall sentiments for the broader market.
Rivian had a stellar start after its IPO on 10th November last year, and it went up by nearly 70 percent in a couple of days post IPO. It hit an all-time high of $172 on 16th November and since then it has been a dismal show by the EV maker. It has been volatile in these last three months but the overall trend has been bearish leading to a downfall of 42% (as on 7.02.2022) from the IPO price and 66% from the all-time high.
As the overexcitement for EV IPO fizzled out, this was around the corner. Let’s dive into what factors can drive Rivian price in 2022 and whether it will reverse back to its IPO price.
Rivian Stock Forecast 2022: Bear Case
- Missed Delivery Estimates for 2021-For a start, Rivian has missed its own target of deliveries for 2021.It was expected to deliver 1015 vehicles by end of 2021, but has delivered only 920. Although it is not a big miss, but company should outperform on its own targets in the initial years to set the tempo. Also, initial numbers are important as it creates image, whether company will meet its long term targets.
- Breakup of partnership with Ford – A large part of IPO success of Rivian belonged to the partnership with Ford which had invested $500 million in the automaker. Prior to IPO, Ford announced plans to develop electric vehicle in collaboration with Rivian on its platform. But soon after IPO, Rivian acknowledged that there are no such plans as of now and both companies are focusing on their individuals plans to excel in the EV field. This will impact the Rivian stock forecast 2022.
- Amazon partners with Stellantis- Amazon partnership is a big positive for Rivian which has a target to deliver 100,000 electric delivery vans to Amazon by 2030. But recently Amazon announced that it is working with Fiat Chrysler parent Stellantis to buy same electric commercial vehicles. It is taken as a setback for Rivian and seen through the lens of mistrust on Rivian to deliver on its promises. However, Amazon clarified that deal with Rivian is intact.
- Still expensive after correction- It is hard to judge the valuation of company like Rivian which has yet not started generating revenue on its balance sheet. But, at current stock price, market cap of Rivian is around $60 million, which is slightly greater than Honda and little less than General Motors, the difference being both Honda and GM deliver millions of vehicles annually. Also in EV space, there are cheaper options available, for example Nio, which is expected to post $10 million revenue in 2022 is still valued at $43 million.
- Strong Competition – Primary product of Rivian is electric truck and although it is very strong, other players are too offering electric trucks that cannot be ignored. For example, Tesla’s Cybertruck and Ford F-150, both have received promising reviews from users. Also, Tesla and Ford are much ahead in numbers of pre bookings. While Ford has 200,000 non-binding reservations for F-150 truck and Tesla has more than 1.25 million pre orders for Cybertruck, Rivian has only 71,000 orders. The competition is going to be intensified in future.
Also Read: Pton stock forecast 2022
Rivian Stock Forecast 2022: Bull Case
- Ambitious Two Year Plan- Although, Rivian fell short of its 2021 target by 100 vehicles, it has an ambitious plan to deliver 55,400 vehicles by end of 2023 and same has been pre booked. During the recent earnings meet, management is all focused to meet this target and deliver on its promises. Also Rivian has 100,000 electric delivery van order from Amazon which is bound to push Rivian to improve each upon year in terms of output from each factory.
- MotorTrend 2022 Truck of the year Award- Rivian has time and again proved superb quality of its product. MotorTrend 2022 Truck of the year award to Rivian is yet another testament for the same. Company has also received positive feedback for its products from News outlets such as Forbes and Electrek.
- Rivian’s charging network – The another positive factor for Rivian stock forecast 2022 is that it is developing its own charging network across US. By end of 2023, Rivian intends to install more than 3500 fast chargers and 10,000 level 2 chargers. It will help boost confidence among users about Rivian and also shows intentions of management that they intend to be in this space for long haul.
- No Dealer Model for Rivian- The company has adopted the policy of direct sales model and no dealer model. Rivian wants to be responsible for everything for its products – from sales to charging to services. This model is expected to provide a differentiated experience to customers and create a long term positive effect. Also, it will allow Rivian to offer membership and software services, finance, insurance and create a recurring revenue apart from sales.
Rivian Stock Forecast 2022: Technical Analysis
Rivian stock is down and beaten in last couple of months. Obviously, it has entered the bear territory a long back. It is a sell signal from every technical indicator barring a few. It is trading below every moving average, be it simple and exponential, for both short term spans like 10 days and long term spans like 50 days (100 days and 200 days MA does not exist till now).
Oscillators like RSI (14) and Average Directional Index (14) are neutral and exceptions are MACD (12,26) which is showing buy signal. Going forward $50 will act as strong support and if it breaks that then Fibonacci next support will be around $40. The pivot point is around $74, and stock will surely face resistance to achieve it, but if it breaks that strongly in 2022, it can march towards $88.
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Rivian Stock Forecast 2022: Conclusion
No doubt, Rivian is a hot stock on the table, which cannot be kept aside from news for a long time. This makes it a very volatile stock for the near term. In respect to valuations, all EV’s are priced higher than traditional automakers as it is assumed that EV makers can deliver at higher margins. But for Rivian, higher-margin is still a distant dream, goal for 2022 should be to generate revenue first in every quarter reporting. As media hypes can fizzle out but numbers not balance sheet figures. This will impact Rivian stock forecast 2022.
Rivian is well placed for long-term goals but it is imperative that partnerships with Amazon and Ford should pan out positively. But, as of today Rivian at this valuations, even after a 42% correction is best suited to be watched from the sidelines till it does not meet its quarterly delivery estimates and beat market expectations.
Note: Crowdwisdom360 collates Predictions and data from all over the net and has no in-house view on the likely trends in the Stocks or Crypto Coins. Please consult a registered investment advisor to guide you on your financial decisions.