Shares of electric vehicle manufacturer Rivian (RIVN, Financial) surged by 12.96% today, driven by positive analyst coverage. Benchmark analyst Mickey Legg initiated coverage with a Buy rating and set a price target of $18, creating optimism among investors.
Rivian Automotive Inc (RIVN, Financial), trading on the NASDAQ, has seen a recent boost in its stock price to $14.69. Despite the positive momentum, the company still faces challenges. Rivian's financial stability is under scrutiny, as indicated by the severe warning of an Altman Z-Score in the distress zone, suggesting potential bankruptcy risks within the next two years. Furthermore, insider transactions over the past three months have shown significant insider selling, with five sell transactions and no buys, totaling 261,307 shares sold.
On the valuation side, Rivian's Price-to-Book ratio stands at 2.56, and its GF Value is calculated at $34.59. This indicates that Rivian might be trading significantly below its GF Value, suggesting potential undervaluation. However, Rivian is still considered a "Possible Value Trap, Think Twice" according to GuruFocus GF Value.
Looking ahead, Rivian is expected to benefit from anticipated improvements in domestic electric vehicle production starting in 2025 and accelerating through 2027. This is likely to be supported by declining average selling prices and an expansion in charging infrastructure, as highlighted by Benchmark analyst Mickey Legg.
