Revving Up Rivian: Why This Analyst Believes RIVN Stock Is a Steal
Electric vehicle manufacturer Rivian Automotive (NASDAQ:RIVN) has to deal with fierce competition, including from Tesla (NASDAQ:TSLA). One big-bank analyst has an optimistic outlook for Rivian, so perhaps the skeptics ought to give RIVN stock a chance.
I’ve previously discussed how Rivian Automotive is outpacing rival EV startups in 2023.
On the other hand, Citigroup analysts recently warned that stock selection in the EV manufacturer category “should be considered very carefully.”
I actually agree with that, so don’t buy RIVN stock until you’ve conducted your due diligence on Rivian.
Still, at the end of the day (and after considering the growth of Rivian Automotive’s charging network) you may be persuaded to take a small share position.
Analyst Stays Bullish on RIVN Stock
In recent weeks, RIVN stock has moved above and below the $24 price target published by Morgan Stanley analysts. Yet, Morgan Stanley analyst Adam Jonas continues to lean bullish on Rivian Automotive, especially after meeting with Rivian’s management at a recent conference.
It’s hard to blame Jonas for feeling optimistic about Rivian Automotive after hearing what Rivian CEO R.J. Scaringe had to say.
As Seeking Alpha reported, Scaringe pointed to Rivian’s gross profit improvement in the most recent quarter. Moreover, the chief executive expects this positive trend in gross profit to continue.
In addition, Scaringe touted Rivian Automotive’s vertically integrated operational model. Rivian controls the “entire perception stack, compute stack and control stack,” the CEO declared.
Scaringe reportedly added that, while Rivian currently uses some third-party systems, the “goal is to move towards entirely in-house sensors.”
On top of all that, Rivian Automotive is apparently on track to start building its 2,000-acre Georgia production site in early fiscal 2024.
Then, the equipment installation phase is slated to commence later in fiscal 2024.
Rivian Achieves a Fast-Charging Milestone
By now, the critics should understand why Jonas is still leaning bullish on RIVN stock. Yet, there’s another intriguing recent development to consider.
According to a report from autoevolution, Rivian Automotive’s fast-charging DC network has expanded to 50 charging stations in operation. That’s a notable milestone, and could be just the beginning of a larger fast-charging station build-out for Rivian.
Rivian Automotive has already agreed to adopt the North American Charging Standard, which is also informally known as Tesla’s charging standard. Can you really blame Rivian for making its vehicles compatible with Tesla’s gigantic network of fast-charging stations?
It might seem futile for Rivian Automotive to try to compete with Tesla’s charging network by building its own network. Yet, I don’t see this as a competition.
It’s just a matter of offering Rivian Automotive’s vehicle drivers more choices and more places to charge their EVs.
If they can use an NACS charger or one of Rivian’s own proprietary chargers, there’s nothing wrong with that. All parties benefit in the end, really.
Feeling Adventurous? Give RIVN Stock a Try
Rivian Automotive’s fast-charging network is tiny compared to the NACS network, but so what? It’s good news that Rivian’s vehicle drivers can have more fast-charging options to choose from.
It’s reasonable for Jonas to be impressed by Scaringe’s bullish arguments for Rivian Automotive. I’m prepared for RIVN stock to surpass the $24 price target established by Morgan Stanley analysts.
After that, $30 will be the next target for Rivian’s loyal investors to look forward to.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
