Rivian (RIVN) Valuation Check as Major Van Recall Collides With R2 Plans and Volkswagen Partnership

Rivian Automotive (RIVN) is back in the spotlight after announcing a recall of nearly 35,000 electric delivery vans in the U.S. over a seat belt pretensioner cable issue, raising fresh questions about execution and long term upside.

See our latest analysis for Rivian Automotive.

Even with the recall noise, investors have been leaning back toward the story. A roughly 35% year to date share price return and a 38% one year total shareholder return suggest momentum is rebuilding rather than fading at the current 17.95 dollar share price.

If the recall has you reassessing the whole EV space, it could be a good moment to compare Rivian with other auto manufacturers that are navigating similar production and demand swings.

With recalls stacking up, gross profit turning positive, and options traders leaning bullish, is Rivian still trading at a discount to its long term roadmap, or are markets already pricing in every mile of future growth?

Most Popular Narrative Narrative: 21% Overvalued

With Rivian closing at 17.95 dollars versus a narrative fair value near 14.83 dollars, the latest consensus frames today’s rally as running ahead of fundamentals.

The launch of the R2 platform represents a step-change improvement in Rivian's cost structure, with management securing supplier contracts and component sourcing that reduce bill of materials by nearly 50% versus R1, significantly lowering per-unit costs; this operational overhaul is expected to improve gross margins and path to profitability as scale is achieved.

Read the complete narrative.

Curious how a lower cost platform, rising software revenue, and a rich future profit multiple all combine into that valuation call? Want to see the full playbook behind those assumptions?

Result: Fair Value of $14.83 (OVERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, expiring EV incentives and persistent cash burn, including heavy R2 and plant spending, could delay profitability and force more dilutive capital raises.

Find out about the key risks to this Rivian Automotive narrative.

Build Your Own Rivian Automotive Narrative

If you see the story differently or want to dig into the numbers yourself, you can build a custom narrative in just a few minutes, Do it your way

A great starting point for your Rivian Automotive research is our analysis highlighting 1 key reward and 2 important warning signs that could impact your investment decision.

Ready for more high conviction ideas?

Put your research momentum to work now, or risk watching the next big mover run without you, by scanning focused stock ideas tailored to different strategies.

• Target potential multibaggers early by reviewing these 3573 penny stocks with strong financials with balance sheets and fundamentals that can support long term growth.
• Explore opportunities in artificial intelligence by checking out these 26 AI penny stocks positioned at the intersection of powerful algorithms and scalable business models.
• Review these 911 undervalued stocks based on cash flows to identify stocks that markets may be pricing below their estimated future cash flows.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com