Shares of EV Start-up Rivian Plunged as Much as 16.5%, Fall Below Their Issue Price

Vivek Kumar
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Shares of Rivian, manufacturer of electric vehicles, dropped as much as 16.5% and fell under their issue price of $78 for the first time on Thursday in tandem with broader losses in electric-vehicle stocks.

According to a Reuters report, Rivian’s stock also dropped a day after Amazon.com, one of Rivian’s biggest investors, announced the signing of a deal with Fiat and Alfa Romeo carmaker Stellantis. Stellantis and Amazon.com said they would collaborate on the development of electric delivery vans using Amazon.com’s software and Stellantis’ software.

Last month, the Irvine, California-based EV startup reported a quarterly adjusted loss of $7.68​​ per share in the fiscal fourth quarter ended in Sep 2021, worse than the Wall Street consensus estimates for a loss of $5.52 per share. The company’s revenue also came in below analysts’ estimates at $1.00 million.

Rivian shares plunged as much as 16.5% to $75.13, which is way below their IPO price of $78 on Thursday.

Analyst Comments

“Rivian is a well-capitalized pure EV startup OEM that can leverage its strategic relationship with Amazon to derive scale and build software and services competencies for its consumer business,” noted Adam Jonas, equity analyst at Morgan Stanley.

“We forecast Rivian to sell ~1.5mn BEVs annually in 2030 (801k Consumer / 653k Commercial). We forecast Rivian’s total revenues to grow at a 34% CAGR from 2025 to 2030. Rivian’s software services business can grow from $641mn revenues in 2025, ~$7bn in 2030 and ~$36bn in 2040, as the installed base grows in size exponentially. We value Rivian at $147, ~1.3x 2030 EV/Sales, expensive vs Auto OEMs but not versus software/tech companies and in-line with EV startups such as Tesla and Lucid.”

Rivian Stock Price Forecast

Fourteen analysts who offered stock ratings for Rivian in the last three months forecast the average price in 12 months of $134.64 with a high forecast of $170.00 and a low forecast of $94.00.

The average price target represents a 66.04% change from the last price of $81.09. Of those 14 analysts, ten rated “Buy”, four rated “Hold” while none rated “Sell”, according to Tipranks.

Morgan Stanley gave the base target price range of $94-$165 with a high of $200 under a bull scenario and $40 under the worst-case scenario. The firm gave an “Overweight” rating on the electric vehicles manufacturer’s stock.

Several other analysts have also updated their stock outlook. Barclays cut the target price to $115 from $120. Deutsche Bank initiated with a buy rating and set the target price to $130. Mizuho initiated with a buy rating and set the target price at $145.

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This article was originally posted on FX Empire

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