Rivian Automotive Inc.’s RIVN stock saw a surge of over 24% on January 3, following the company’s announcement of its production and delivery results for the fourth quarter and full year of 2024. This boost indicates that Rivian successfully met its targets, a fact that captured the attention of Wall Street despite the challenges faced.
In light of this price jump, investors may be questioning whether now is an ideal time to invest in Rivian shares. To answer this, we will examine the company’s fundamentals.
Strong Production and Delivery Numbers
Rivian disclosed last Friday that it produced 12,727 electric vehicles (EVs) in the December quarter of 2024 and delivered 14,183 EVs during that same period.
For the entire year of 2024, the company delivered 51,579 vehicles and produced 49,476 units. These figures are in line with Rivian’s earlier projections, which estimated production between 47,000 and 49,000 vehicles and deliveries between 50,500 and 52,000 vehicles.
This positive announcement was particularly significant as concerns about overall EV market demand continue to grow. This comes on the heels of Tesla Inc. (TSLA) announcing a year-over-year decline in deliveries for the first time.
Global Expansion with Volkswagen Partnership
Rivian stands to gain considerably from its joint venture (JV) with Volkswagen (VWAGY). This collaboration allows Rivian to tap into Volkswagen’s vast global resources and manufacturing know-how, helping to scale production while trimming development costs.
By blending its innovative EV technologies with Volkswagen’s infrastructure, Rivian aims to accelerate the introduction of next-generation EVs to the market, expecting new models by 2026. The integration of Rivian’s technology into future Volkswagen vehicles will further enhance its presence and create new revenue opportunities.
Financially, Rivian will also benefit from Volkswagen’s commitment of up to $5.8 billion by 2027, which will facilitate innovation and expansion. This relationship is expected to improve Rivian’s automated driving capabilities and over-the-air updates, adding significant value to its vehicles. The collaboration positions Rivian to hasten global EV adoption while emphasizing the quality of its offerings.
Diversifying Beyond Amazon
Among Rivian’s significant clients is Amazon.com Inc (AMZN). In 2024, Rivian ramped up its production and delivery of electric delivery vans to Amazon, aligning with the company’s shift towards cleaner energy solutions.
Looking ahead to 2025, Rivian seeks to sell these electric vans to additional businesses with delivery fleets. However, this process can be lengthy, as companies need to modify their infrastructures—like adding charging stations and training staff for vehicle maintenance. Despite these hurdles, Rivian remains hopeful that demand will grow as more firms pursue greener delivery options.
Is RIVN a Good Investment Bet?
Rivian’s recent achievements correspond with impressive stock performance. Over the last three months, its stock has surged 57.2%, outperforming its industry peers, which grew by 51% during the same time.
Three-Month Price Chart
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Despite this upward momentum, investing in Rivian carries certain risks. The company is still working towards consistent profitability and depends on substantial capital for its operations. Additionally, analysts have reduced their profit forecasts for 2024 and 2025 over the past 60 days.
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As such, Rivian presents itself as a high-risk investment aiming to carve out a significant role in the EV sector.
Investors willing to take on this risk might consider waiting for a more favorable entry point. The stock, currently rated as a Zacks Rank #3 (Hold), is perceived as overvalued, trading at a trailing 12-month price-to-sales (P/S) ratio of 3.67 compared to the industry average of 2.81. A comprehensive list of today’s Zacks #1 Rank (Strong Buy) stocks is available here.
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