Rivian stock price could be on the verge of a multi-year bull run ahead of the R2 launch later this year. RIVN shares surged by over 24% on Friday, moving to a high of $16.50, its highest swing since July 2024. It has soared by almost 100% from its lowest point in 2024.
Rivian R2 could be a game changer
Rivian share price has staged a strong bull run in the past few months, helped by the ongoing hype surrounding R2, the cheaper version of its popular R1 brand.
R2 will be a smaller, but highly capable vehicle, costing about $45,000, much cheaper than R1, which starts at $69,000. It will have an estimated range of over 300 miles, slightly higher than the cheapest R1, which has 270 miles.
Rivian’s R2 will be more highly successful because of R1s success in the United States, where it has become one of the most popular EVs.
Results released last week showed that Rivian produced 49,476 vehicles in 2024 and delivered 51,579. These numbers were in line with the previous guidance, and is a sign that it is still seeing strong demand.
Rivian’s key challenge over time was that its vehicles were always too expensive for the average consumer. For example, with $65,000, one can opt to buy a Rivian R1 truck or a Ford F-150, which starts at $38,710.
One can also buy the Ford Ranger, which starts at $32,820 or even the Maverick, which sells at $23,920. Given this choice, many people are opting to buy the Internal Combustion Engine vehicles that have a long track record.
The Rivian R2 – sort of – changes the view by introducing a quality vehicle at a highly affordable price. It could do better as Tesla’s Model 3, which has become the company’s best-selling vehicle.
RIVN Profitability in sight
The other main reason why the Rivian stock price may be on the cusp of a multi-year bull run is that the company has started to focus on profits.
For a long time, the Rivian stock price has struggled because of its huge losses. Its net loss in 2023 was over $5.4 billion, lower than the $6.7 billion it lost in the previous year. Its trailing twelve months (TTM) loss was over $5.52 billion.
This loss-making will continue in the near term. However, the company has started to focus on slowing costs, which will help it deliver the first quarterly gross profit when it publishes its financial results. This is a good progress, and I expect the firm to turn a net profit in the next few years.
At the same time, Rivian has improved its balance sheet to offset its cash burn. It received a big $5 billion investment from Volkswagen, and most recently, the firm received a $6.6 billion loan from the Joe Biden administration.
Therefore, a combination of modest sales growth, future profitability, and a stable balance sheet may help it continue to thrive. Also, the company may benefit from Elon Musk’s proximity to Donald Trump, the incoming president since he will not promote policies that may hurt Tesla.
Read more: Rivian (RIVN) stock rises almost 50% after hours off back of investor call
Rivian stock price analysis
The weekly chart shows that the RIVN share price has been in a tight range in the past few years amid concerns about its loss-making trajectory. There are signs that the stock has been going through the accumulation phase.
Just recently, the accumulation and distribution indicator moved above the key resistance shown in red. This is a popular indicator that looks at the trends of investors in the market. The two lines of the Smart Money Index (SMI) have formed a bullish crossover.
Rivian’s stock has also moved above the descending red trendline. Therefore, the path of the least resistance for the RIVN stock will be bullish, with the next key level to watch being at $28.10, its highest swing in June 2023, which is about 70% above the current level.
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