Rivian Automotive (NASDAQ:RIVN) has struggled to regain the enthusiasm seen during its 2021 IPO, where it reached a valuation exceeding $100 billion. Currently, the company’s market capitalization has fallen to just under $15 billion, with a share price decline of about 25% over the past year. Despite these challenges, Rivian has reported positive quarterly gross profits for the last two quarters—$170 million in Q4 2024 and $206 million in Q1 2025.
Investor Weebler Finance expresses optimism regarding Rivian’s future prospects, particularly with the anticipated R2 product line, which is expected to have a starting price of $45,000. This model aims to attract a more budget-conscious market, with estimated material costs significantly lower than those of the earlier R1 model. Weebler believes that as production scales up at Rivian’s Illinois facility, the R2 line could significantly enhance overall profitability.
However, the investor maintains a cautious stance, highlighting that Rivian’s current valuation is concerning, with its trailing Price-to-Sales ratio of 2.8 and an EV-to-Sales ratio of 2.7 notably higher than the consumer discretionary sector averages. The broader macroeconomic challenges and the risk of potential delays in the R2 rollout add to the uncertainty surrounding the stock.
Overall, Wall Street’s sentiment aligns with Weebler’s cautious outlook, as evidenced by a consensus rating of “Hold” on the stock, with 15 Hold ratings surpassing 7 Buy and 3 Sell ratings. Rivian’s 12-month average price target of $14.74 suggests there could be a potential upside of over 13%.
In summary, while Rivian faces hurdles, the launch of the R2 model and ongoing improvements in profitability present a glimmer of hope for investors.