It has been a slippery and unforgiving drive lower for Rivian Automotive (NASDAQ:RIVN) investors. But is now a good time to take a second look at RIVN stock?
Rivian stock is down almost 40% year-to-date, and 8.5% in early February alone.
Not RVIN investors are alone in their misery. Far from it of course.
Shopify (NYSE:SHOP), Block (NYSE:SQ), Tesla (NASDAQ:TSLA) … the list goes on. Big tech titans like these have all fallen from grace. They’re among a diverse group of large-cap growth plays hit particularly hard since late 2021 on rekindled rate and inflation concerns, geopolitics, Covid-19 woes and plenty of company-specific bearish propaganda.
In such an environment, enthusiasm for RIVN stock’s November IPO was bound to run into trouble.
A Quick Look at RIVN Stock
The electric vehicle (EV) truck and van play still isn’t cheap by traditional metrics. Shares maintain a hefty valuation of about $55 billion. Yet by the end of 2021, Rivian had managed to hand out the keys to 920 of its R1T EV pickup trucks.
Without getting too wrapped up in the numbers, let’s just say that a price-to-sales multiple of around 44,000 makes even Warren Buffet’s somewhat controversial Snowflake (NYSE:SNOW) P/S proposition of around 73x appear like a value trade.
Still, Rivian is executing and making good on its sales forecasts. Furthermore, management anticipates exponential sales growth with deliveries of about 55,400 vehicles by the end of 2023 based on its pre-order backlog.
If you’re unfamiliar with what RIVN is bringing to the table, its Rivian’s R1T landed MotorTrend’s prized Truck of the Year award for 2022. Also, significant stakes from Ford (NYSE:F) and massive delivery van order of 100,000 vehicles by Amazon (NASDAQ:AMZN) strongly suggest there’s even more under the hood.
Finally, RIVN’s value is also looking technically stronger on today’s stock chart.
Rivian’s Daily Price Chart
Source: Charts by TradingView
There’s always a bull market somewhere. Right now, the earmarks of a new bullish cycle in RIVN stock should have investors’ attention. Technically, this past week Rivian shares confirmed a doji formed off the stock’s all-time low.
The upside reaction above $68.07 coincided with a downtrend breakout. It’s bullish, but investors have also elected to apply the brakes on the pair of technical signals.
Today, RIVN is fetching just under $61. Interestingly though, the stock is in a testing position of the downtrend line. And former resistance is trying loosely to act as support.
Coupled with a potential higher-low daily chart pattern and a neutralized stochastics on the cusp of a bullish crossover, RIVN stock could be putting in a meaningful bottom and ready to embark on a fresh bullish phase.
For investors that want to better appreciate a new bull market in Rivian with less worry of becoming a crash test dummy, I’d go with a slightly unorthodox, actively managed April $65/$80 RIVN stock collar or its vertical equivalent.
On the date of publication, Chris Tyler 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.
Chris Tyler is a former floor-based, derivatives market maker on the American and Pacific exchanges. For additional market insights and related musings, follow Chris on Twitter @Options_CAT and StockTwits.
