It’s been a roller-coaster ride for investors in electric vehicle (EV) stocks in 2024. The year started on a somber note, as startup EV names like Rivian (RIVN) and Lucid Motors (LCID) continued their dismal run from 2023, and hit fresh record lows. Even Tesla (TSLA) was in the red for the year until just a few days ago.
TSLA has now rebounded, and far from being the worst-performing S&P 500 Index ($SPX) stock, it is now in the green and looking strong. Rivian, meanwhile, has now more than doubled from its 2024 lows. What’s the forecast for RIVN stock, and can the startup EV company continue to go up in 2024?
Why is Rivian Stock Going Up?
To begin with, we should understand why Rivian stock has been going up. First, there has been a broad-based rally in EV stocks, which also helped spark the upside in RIVN.
Late last month, Rivian and Volkswagen (VWAGY) announced a strategic partnership, under which the German auto giant will invest a total of $5 billion in RIVN. Notably, Volkswagen last year also invested in Chinese EV startup Xpeng Motors (XPEV), and its stock price rallied on the news – just as Rivian did this year.
Rivian’s Q2 deliveries were also better than expected, and the company maintained its 2024 production target of 57,000 vehicles. While a company merely maintaining its guidance wouldn’t necessarily be big news, the current EV industry turmoil means that even a reaffirmation of the modest forecast was perceived as positive by the markets.
Finally, amid the continued decline, Rivian’s valuations had fallen to nearly absurd levels, and as a result, the stock reacted sharply to a flurry of positive developments.
RIVN Stock Forecast: Analysts Raise Their Target Prices
After Volkswagen announced the massive investment in Rivian, brokerages went into overdrive in raising RIVN’s target price. Canaccord raised its target to a Street-high of $30, which is 83% higher than Wednesday’s closing prices. RIVN's mean target price is a much more modest $17.36, which is only about 6% higher.
Of the 23 analysts covering Rivian stock, 12 have a “Strong Buy” rating, while 1 analyst rates the stock as a “Moderate Buy.” Nine analysts rate RIVN as a “Hold,” while 1 says it's a “Strong Sell.”
Can Rivian Stock Continue to Rise in 2024?
I believe RIVN stock still has room to run higher from these levels, as the company works towards a sustainable and profitable business model. Rivian has maintained its guidance of turning positive on the gross profit level in Q4, and reaching positive adjusted earnings before interest, tax, depreciation, and amortization (EBITDA) in 2027.
The company’s pivot to affordable cars should also help propel its deliveries. Notably, Rivian’s upcoming R2 platform will be priced at around $45,000, and deliveries are expected to start in the first half of 2026. The company then plans to start delivering vehicles based on the R3 platform, which will be priced even lower than the R2. These mass-market models will help Rivian achieve economies of scale, which - coupled with ongoing cost cuts - will help it to reach profitability.
During the investor day last month, Rivian CEO RJ Scaringe talked about an “extreme sense of urgency” in driving profitability. The company expects to achieve a free cash flow margin of 10% over the long term, and speaking at the investor day, Scaringe said, “We’re very, very fast driving towards the improvements necessary to get to positive free cash flow.”
RIVN Offers an Attractive Product
Rivian offers an attractive product – which includes both the hardware and the software. The company’s models have received good reviews from both auto analysts as well as buyers. For instance, Car and Driver rated its 2025 R1T as 10/10, and was quite impressed with the model.
In its review, the publication wrote, “though the ranks are growing—we see you Ford F-150 Lightning and Chevrolet Silverado EV—the Rivian R1T beat them both to market, and its multifaceted personality makes it a C/D favorite worthy of its place on our 2024 Editors' Choice list.”
Rivian also has a strong balance sheet, which was further strengthened after the Volkswagen investment. For me, Rivian ticks all three boxes that a startup EV company should have to survive the current markets – an attractive product, a strong balance sheet, and a credible management team.
All of that said, while Rivian might look a bit overbought in the short-term – its 14-day relative strength index (RSI) is above 75% - the stock looks like a good long-term buy based on its still-reasonable valuations, as its next 12-month (NTM) price-to-sales multiple of 3x does not look too demanding.
On the date of publication, Mohit Oberoi had a position in: RIVN , TSLA , XPEV , LCID . All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
