Could Buying Rivian Automotive Stock Today Set You Up for Life?

Rivian Automotive (NASDAQ: RIVN) attracted a stampede of bulls with its IPO on Nov. 9, 2021. The electric vehicle (EV) maker went public at $78 per share, and its stock opened at $106.75 before touching a record high of $172.01 just a week later.

At that peak, Rivian's market cap hit $153 billion, which was 92 times higher than the revenue it would generate in 2022. It briefly made the tiny EV maker more valuable than Ford or General Motors.

Rivian's stock initially soared for three reasons: It was backed by Amazon and Ford, it was already producing thousands of EVs, and it went public at the apex of the meme stock craze. But today, Rivian shares trade for about $10, giving it a far humbler market cap of $10 billion. That's less than 2 times the revenue it's expected to generate next year.

The bulls fled as Rivian's growth slowed, it racked up steep losses, and rising interest rates popped its bubbly valuations. Ford also ditched its plans to co-develop an electric pickup with Rivian in 2021 and liquidated most of its stake in the company in 2022. But could buying Rivian now while the market is shunning it set you up for massive gains in the future?

Rivian currently produces three models of vehicle: the R1T pickup, the R1S SUV, and a custom delivery van it sells to Amazon. Before its public debut, Rivian claimed it would produce 50,000 vehicles in 2022. Instead, it produced 24,337 vehicles, and only delivered 20,332. It blamed those disappointing numbers on supply chain constraints, the cooling growth of the EV market, and other macro headwinds across the industry.

In 2023, Rivian overcame those challenges to produce 57,232 EVs and deliver 50,122. Its growth accelerated as it resolved its supply chain problems and ramped up production of its in-house Enduro drive unit to cut costs.

But for 2024, Rivian only expects to produce between 47,000 and 49,000 vehicles. Once again, it blamed supply chain problems -- but its problems were exacerbated by the temporary shutdown of its main plant in Illinois for upgrades in April, intense competition in the EV space, and higher interest rates. It expects its full-year deliveries to land between 50,500 and 52,000 EVs.

Rivian's revenue soared by 167% to $4.43 billion in 2023, but it only slightly narrowed its net loss from $6.75 billion to $5.43 billion. For 2024, analysts expect its revenue to rise by just 6% to $4.71 billion, but expect it to narrow its net loss to $4.88 billion. Those losses are steep, but Rivian still had $9.18 billion in total liquidity (including $7.87 billion in cash, cash equivalents, and short-term investments) on its books at the end of June.