It has been less than a month since Rivian’s (RIVN) IPO, when the EV startup made a huge splash upon entering the public markets.
The stock came zooming out of the gates amidst electric vehicle mania which immediately raised valuation questions; the company quickly became the U.S.’ biggest by market cap for one without any revenue (barring the sale of a few dozen vehicles). The stock has pulled back a bit from November’s peak and now boasts a market cap of “only” $104 billion.
In any case, Wedbush’ Daniel Ives believes that whether the valuation is deserved or not, the Rivian story is a “game changer,” representing an opportunity in an industry going through its biggest transformation since the 1950s.
That opportunity is one Ives’ estimates to be worth $5 trillion – not for Rivian alone – but for the EV segment over the next decade. That said, Ives thinks undisputed EV leader Tesla is set to claim half of the market, leaving 2.5 trillion “up for grabs.” And here, the analyst believes Rivian has “strong potential to be a clear leader.”
So, what is the bull case for Rivian and how does it differentiate itself from the competition in this most talked about segment?
Well, Rivian specializes in SUV/Pickup Truck EVs, an “untapped” segment “virtually non-existent” in the EV market today.
Not for long, however. Its debut vehicles – the R1T and R1S – are expected to enter the market early next year and will go toe-to-toe with GM’s all-new Hummer and Ford’s “stalwart” F-150, with Tesla’s Cybertruck entering the fray at a later date.
Over the next five years, the company is looking to sell over 742,000 units and there are already 48,000 reservations for the two flagship models.
Rivian also has the backing of some of the world’s biggest companies with $10 billion invested in the company prior to going public with Ford and Amazon chipping in. Amazon actually holds a 20% stake and has put in an order for 100,000 last-mile delivery vehicles.
“With the popularity and consumer demand for EVs on the trucking/SUV market,” the 5-star analyst summed up, “We believe Rivian is in the catbird’s seat to take considerable market share in this EV arms race under its visionary CEO and founder RJ Scaringe.”
So, great for Rivian, but what does it all mean for investors? Ives initiated coverage with an Outperform (i.e., Buy) rating and $130 price target, suggesting shares have room for an extra 11% run over the coming months. (To watch Ives’ track record, click here)
Unsurprisingly, Rivian has quickly gained the Street’s attention and most of it appears to be positive. Of the 13 reviews on record, 9 are to Buy and 4 say Hold, resulting in a Moderate Buy consensus rating. The average price target stands at $134.08, suggesting room for 15% share appreciation in the year ahead. (See Rivian stock analysis on TipRanks)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
