Well, this morning, Piper Sandler downgraded its rating on the electric vehicle (EV) maker from “overweight” to “neutral.” The firm apparently has funding concerns.
According to analyst Alexander Potter, Rivian’s current growth strategy is overly contingent upon large amounts of investments. Potter speculates that Rivian may need more than $4 billion “to fund long-term growth beyond 2025.”
Of course, the analyst wasn’t completely dismissive of the EV maker, noting that its fundamental business plan was strong. Potter also says the company’s stock will likely continue trading at book value “until funding is addressed.”
Investors seem to be sheepish around RIVN stock currently. Shares closed Thursday at $14.37 per share. That’s well within the low end of Rivian’s 52-week trading range of between $12.58 and $40.86 per share.
So, what else do you need to know about RIVN?
RIVN Stock Sinks Following Profitability Timeline Comments From CFO
Despite Rivian’s current slump, the company does have some bright spots. For example, the EV maker has already beaten its consensus production estimates for the first quarter, delivering 7,946 vehicles in Q1 compared to the 7,752 EVs expected. Rivian even disclosed that it is on track to produce 50,000 vehicles by year-end.
At the Bank of America Securities Summit earlier this month, Rivian Chief Financial Officer Claire McDonough also made some rather compelling claims in regards to the automaker’s future. Apparently, McDonough expects Rivian to achieve profitability by the end of 2024, largely due to the company’s three major pillars: the R1T, the R1S and its EV delivery van. McDonough also shared plans to build 85,000 R1 vehicles in 2024. Meanwhile, R2 production capacity should reach as high as 200,000 during 2026.
Finally, Rivian announced updates to its Adventure Network charging infrastructure. This includes the company pursuing federal charging incentives. The Federal Charging Fund may cover up to 80% of its charger installation costs, with the drawback of the company being required to open its network to other EVs.
On the date of publication, Shrey Dua did not hold (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.