On Monday, Benchmark initiated coverage on shares of Rivian Automotive Inc (NASDAQ: NASDAQ:RIVN) with a Buy rating and set a price target of $18.00, above the current stock price of $13. The stock has shown strong momentum with a 9.5% gain over the past week. The firm's analysis predicts that Rivian is poised to capture a significant portion of the expansive market opportunity that lies ahead in the next decade.
Benchmark's commentary highlighted the company's promising outlook, noting that after a slowdown this year, Rivian's domestic electric vehicle (EV) production is anticipated to pick up in 2025 and then further accelerate between 2026 and 2027.
The growth is expected as average selling prices (ASPs) decrease and the expansion of the EV charging infrastructure progresses. According to InvestingPro data, Rivian's revenue grew by 20.3% in the last twelve months, with current revenue at $4.55 billion.
Rivian is considered to be in an advantageous position when compared to other new entrants in the EV market. The company's existing contracts with major corporations such as Amazon (NASDAQ:AMZN) and Volkswagen (ETR:VOWG_p), along with its highly rated vehicles, are seen as key factors that will contribute to its growth.
Moreover, Rivian is expected to report a positive gross profit in the current quarter, which is further complemented by its strong financial liquidity, with a current ratio of 5.09 and more cash than debt on its balance sheet.
The firm's outlook for Rivian is optimistic, as the EV manufacturer is forecasted to benefit from the overall growth in the EV sector, driven by declining costs and infrastructure development. Benchmark's initiation of coverage with a Buy rating and an $18 price target reflects confidence in Rivian's potential to thrive in the competitive EV landscape.
InvestingPro analysis indicates the stock is currently near its Fair Value, with 10 additional ProTips and a comprehensive Pro Research Report available for subscribers.
In other recent news, Rivian Automotive has been a focus of several key financial developments. The electric vehicle manufacturer recently secured a conditional commitment from the U.S. Department of Energy for a loan of up to $6.6 billion, intended to enhance its growth and domestic production capacity. This is in addition to a deepened partnership with Volkswagen, which is expected to offset operational expenses and improve Rivian's financial standing.
Truist Securities, Deutsche Bank (ETR:DBKGn), DA Davidson, Mizuho (NYSE:MFG), and Stifel have all maintained a Hold or Buy rating on Rivian's shares, while adjusting their stock price targets. Despite supply chain disruptions, Rivian managed to produce 13,200 vehicles and deliver around 10,000 units, generating revenues of $874 million for a recent quarter, which fell short of the consensus estimate of $982 million.
The company forecasts delivery growth in the low single-digit percentage range year-over-year and aims to achieve a positive gross margin by the fourth quarter of 2024. These recent developments highlight the resilience of Rivian and its potential for growth amidst ongoing industry challenges.
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