Several factors point to the strength of demand for Rivian’s electric vehicles. Its share price is near a one-year low, it has a low P-S ratio, and it is getting orders for its EV models. These factors, coupled with the company’s burgeoning backlog of orders and reservations, could mean that Rivian is a good stock to buy.
Vivian’s share price is trading near 1-year lows
Rivian is one of the best-funded electric car startups in history and went public in November at a $90 billion valuation. While the stock initially surged after the IPO, it has fallen ever since and has slipped 63% so far in 2022. Analysts aren’t giving up on the company, however, and are maintaining “buy” ratings on the stock.
Despite the recent drop in the stock, Rivian’s shares have doubled in the past couple of weeks, as deliveries of its vehicles started. While it is hard to say exactly what’s causing the stock to plunge, investors should keep this in mind as they wait for the IPO. The company is still in the process of developing its business and will likely have some supply-chain issues to contend with, but these issues should not discourage investors from buying.
It has a high market valuation
New Constructs has criticized Rivian’s current market valuation, claiming the company is worth only $13 billion. The company lacks the manufacturing experience necessary to compete in the EV market and is facing intense competition from other EV makers. The firm believes the company is more than worth $13 billion at most. In China and Europe, sales of electric vehicles are on the rise, while the U.S. is only slowly moving in that direction. With governments setting targets to phase out diesel fuels, consumers are becoming more environmentally conscious.
While Rivian has a large production capacity, Tesla did not hit the $100 billion milestone until 2020, even though it produced more than 500,000 vehicles. In addition, Rivian’s R1T electric pickup starts at just $67,500, making it one of the more affordable electric vehicles on the market. Rivian is expected to reach volume production in 2023, but if it is delayed, the stock could drop by a large margin.
It has a low P-S ratio
Investors may be concerned about the high P-S ratio of Rivians Electric Vehicles (NASDAQ:REV). The company is running out of time, ramp, margins, and competition. Competition from all sides, from the next-gen Ford electric pickup truck to rival Tesla’s Cybertruck, will squeeze out Rivian’s market share. Additionally, Rivian has very little money to pursue its plan to compete with Tesla.
While there are many concerns about the stock, Rivian’s record in the field has led investors to believe it can deliver on its promise. The company has a low P-S ratio. As of June 17, 2022, it is trading at a relatively low P-S ratio. This has the potential to drive profits for investors. In addition, investors are likely to find it hard to pass up the low P-S ratio of Rivians Electric Vehicles.
Its EV models have backlogs of orders and reservations
The demand for Rivian’s EV models is so high that the company is reshuffling its production process to meet demand. As of April 26, the company has a backlog of 55,400 R1T and R1S reservations. Meanwhile, it’s adding $2,000 to each model each month to keep up with demand. That’s not good for Rivian, which is already facing supply shortages, material pricing, and overall demand.
Rivian is one of the few automakers that are actually making their vehicles, following companies like Lucid and Fisker Inc. The company was founded by MIT PhD RJ Scaringe, and has raised more than $10 billion in venture funding. It has gotten the backing of the auto industry as well. Ford, Toyota, and Cox Automotive have all committed to supporting the company, which has a market cap of $34 billion.