This week isn’t off to a good start for Rivian (NASDAQ:RIVN) and RIVN stock. The electric truck innovator reported earnings for Q4, but its delivery guidance failed to meet Wall Street expectations. Rivian’s quarterly revenue was $663 million, substantially below the forecasted $742 million. CNN Business considers the company’s biggest problem to be its low delivery expectations, which came in at roughly 10,00 vehicles. That’s well short of the 60,000 that analysts hoped to see.
RIVN shares have been falling since markets opened, and it isn’t helping that the company has also announced a 13,00 EV recall. But not all RIVN stock price predictions are so pessimistic. One investment bank remains bullish on the troubled company and sees RIVN as a potential EV race winner.
Needham recently laid out its bullish case for RIVN stock, issuing a price target of $26 per share. To some, that may seem ambitious, as Rivian trades at less than $16 per share. However, the firm’s analysts make a good case for why the company’s best days may be ahead of it.
RIVN Stock Price Predictions: A Closer Look
It’s no secret that Rivian has given investors plenty of anxiety as RIVN stock trended downward over the past six months. The 2022 bear market bashed many tech stocks the truck maker didn’t fare any differently, shedding more than 50% of its value. But, through it all, RIVN stock price predictions remain primarily positive. Among Wall Street analysts, 13 rate the stock as a “buy,” with only one issuing a “sell” rating. But Needham’s analyst team made a detailed case for why it sees RIVN stock as a winner. As stated in a note:
“RIVN’s initial vehicle production guidance for ’23 is well below consensus delivery estimates, likely causing a material reset in investor expectations. However, RIVN was adamant on achieving positive gross margins in ’24 and their ability to manage through ’24 without requiring further capital. While the steepness of the implied ramp is uncomfortable, we view production issues as solvable, with RIVN’s move to their internally designed Enduro drive unit as a notable tailwind.”
This case makes a lot of sense. It carefully accounts for the problems facing Rivian but highlights why they can be overcome. Additionally, Needham isn’t concerned about the demand factor. Reuters reports that demand for EVs from companies such as Rivian and fellow EV startup Lucid Motors (NASDAQ:LCID) has been fading as supply chain problems persist.
But Needham’s RIVN stock price predictions also account for the company’s net reservations communication and buyer satisfaction levels. It is important to note that the Rivian R1T has garnered a higher approval rating than Tesla’s (NASDAQ:TSLA) Model 3. This may be part of why multiple experts have predicted that Rivian will likely become the next Tesla, taking market share away from the EV leader.
Lots of Ground to Cover
Rivian certainly has a lot of ground to cover before it can reach the bullish price of $26 set by Needham. But that doesn’t mean it can’t get there. And if the analyst team’s case is to be believed, the stock’s current downturn is a classic buy-the-dip opportunity before shares rebound.
It isn’t only Wall Street analysts who believe it can rise. Institutional investment remains intact, even amid Rivian’s recent declines. If Investors can stomach some risk and volatility, listening to these RIVN stock price predictions could be an excellent decision as markets prepare to rebound.
On the date of publication, Samuel O’Brient 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.
