Rivian Share Forecast January 2022 – Time to Buy RIVN?
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Shares of EV maker Rivian (NASDAQ: RIVN) is in the red today after closing at $79.95 as of January 14th (19:59 EST). Rivian shares fell to $75.13 per share on Friday before closing at $79.95 per share, marking the first time that the shares fell below their IPO price of $78 per share.
Rivian – Technical Analysis
The financial statement of Rivian indicates that the market cap is at $71.98 billion with $8.488 worth of assets.
Moving averages such as Exponential Moving Average (10)(87.12), Simple Moving Average (10)(87.95), Exponential Moving Average (20)(93.92), Simple Moving Average (20)(93.68) and Exponential Moving Average (30)(100.05) are indicating a sell action. Oscillators such as Relative Strength Index (14)(37.22)and Stochastic %K (14, 3, 3)(22.10) are neutral.
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Recent Developments
Rivian shares have dropped with many high growth tech names. One of the biggest reasons for Rivian shares to drop was the news that Amazon was starting a partnership with Chrysler parent Stellantis to supplement its supply of electric delivery vans. Prior to this, the only positive news from Rivian was that Amazon had placed an initial order of 100,000 electric vans. By the end of 2021, Rivian reported that it had produced its first 1000 vehicles.
Rivian has a factory based in Illinois which has a 150,000 annual production capacity. But the company is already making investments to raise that to 200,000. The company has also invested in an upcoming second manufacturing plant in Georgia where it hopes to begin production in 2024. This means Rivian cannot produce more for Amazon beyond the 71,000 reservations for the R1T pickup truck it already has.
Should You Buy RIVN Shares?
Investors interested in Rivian for the long-term have a nice entry point with the recent drop in valuation. There are definite reasons why Rivian hasn’t performed as well as other major automakers. Compared to other automakers, Rivian was worth $93.4 billion and Lucid Group (NASDAQ: LCID) was worth $62.6 billion on December 31st 2021. Both are now $70 billion.
Rivian has several things going for it such as around quadruple the number of reservations, more than triple manufacturing capacity, and double the cash that Lucid has. But what it lacks is accountability. The main difference between the two is that Lucid continues to hit its targets while Rivian has already overpromised and underdelivered. On top of that Rivian’s chief officer left last month.
While Rivian has fallen from the all-time high that it experienced in November, it still has a good market capitalization. It faces increasing competition in the pickup trucks and SUV market too. This includes Ford, which is recording reservations for its upcoming pickup truck F-150 Lightning. Others include Tesla and General Motors, are planning to launch their electric pickup trucks soon.
It still faces risks despite having delivered the first electric pickup trucks ever. Traders can either wait for a more attractive entry point or wait until the company’s growth story evolves enough to justify the valuation.
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