Can Rivian soar higher after friday’s 24% stock jump?

Rivian Automotive, Inc. (NASDAQ:RIVN) experienced a significant increase in stock value, rising by 24 percent on Friday, ultimately closing at $16.49 per share, attributed to better-than-expected vehicle deliveries for the fourth quarter.

The company reported production of 12,727 vehicles at its Normal, Illinois plant during the fourth quarter and a total of 49,476 units for the full year. Deliveries reached 14,183 for the fourth quarter and 51,579 for the entirety of 2024, exceeding analysts’ expectations, which estimated about 13,400 EV deliveries for that quarter and 51,000 for the year.

Rivian also announced a joint venture with Volkswagen amounting to $5.8 billion, named “Rivian (RIVN) and VW Group Technology,” aimed at developing electrical and electronic architecture and software for electric vehicles for both companies’ use.

RIVN ranked first among the eleven companies in the technology, energy, and aviation sectors that led Friday’s market rally, with the Dow Jones Industrial Average rising 0.80 percent, and the S&P 500 and Nasdaq Composite increasing by 1.26 percent and 1.77 percent, respectively.

Despite its strong quarterly performance, Rivian faced a challenging year in 2024, with shares down 40 percent from 2023 and nearly 90 percent from their peak above $100 during their IPO in 2021. The company has struggled with computer chip shortages and stiff competition from Tesla, as well as mounting operational losses and workforce reductions initiated in 2022.

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In the third quarter of 2024, Rivian reported its first revenue drop since going public, with a 35 percent decline to $874 million, falling short of the $980 million anticipated by analysts. This decrease was attributed to a miscommunication with a key supplier that led to production disruptions.

Analysts have varied opinions on Rivian’s outlook according to Yahoo Finance. RBC Capital Markets analyst Tom Narayan maintains a neutral rating, projecting shares may hover around $12 over the next twelve months. In contrast, CFRA analyst Garrett Nelson continues to hold a sell rating with a target price of $8, stating that Rivian’s bottom-line losses are expected to persist.

The full fourth-quarter results for Rivian are scheduled to be reported on February 20.

Rivian’s potential to soar further after its 24% stock jump depends on several factors. Strong Q4 delivery numbers and the promising Volkswagen joint venture highlight operational progress, but challenges like ongoing losses, production disruptions, and stiff competition from Tesla remain headwinds. While exceeding delivery expectations may boost short-term investor confidence, Rivian’s long-term performance will hinge on its ability to stabilize operations, manage supply chain issues, and achieve profitability in a competitive EV market. Analyst opinions remain mixed, suggesting limited consensus on Rivian’s trajectory.

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Featured image credit: Rivian