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My RIVN stock price prediction for 2025


The dust seems to settle when it comes to Rivian Automotive (NASDAQ:SHORE). So far in 2023, RIVN stock is down just 2%.

In the eyes of investors, the worst may seem to be priced in. As you may recall, the price of RIVN crashed in 2022 as investors reacted to high inflation, rising interest rates and slowing economic growth.

So, with these issues potentially abated and the fact that the EV megatrend may be starting to reaccelerate, does that mean a big recovery is in sight for Rivian? Not so fast.

While this early-stage electric vehicle maker is likely to continue ramping up production, that might not be enough to trigger a partial rebound over the next two years. Much less, a full return to past heights.

The current situation with the RIVN stock

Over the past few months, most of the headlines related to Rivian have been negative in nature. For example, earlier this month, the company announced shipment numbers for the year 2022 that fell short of its target, albeit slightly (24,337 vs. 25,000).

That said, the market is well aware of Rivian’s myriad headwinds and has priced it accordingly. At $18 per share, RIVN stock today trades nearly 90% below its all-time high closing price of $172.01. There’s a good chance stocks won’t face another similarly sized drop.

Although it missed its already stretched 2022 production target, with the company now producing around 10,000 of its vehicles per quarter, full-year production numbers for this year are expected to top last year’s numbers. With about $13.2 billion in cash, this early-stage electric vehicle company has enough cash to cover short-term losses.

These factors could keep the stock stable this year. Or, maybe help it move slightly higher as investors warm up for risk play. Still, even though RIVN might perform much better in 2023 than in 2022, that doesn’t mean what’s happening is the start of an epic comeback.

Growing competition clouds future prospects

Rivian could go ahead with increased production. Given the automaker’s backlog of reservations totaling 114,000 (as of Nov. 7), there’s likely enough demand to turn the increased production expected this year into sales.

Again, maybe not. Electric vehicle adoption is expected to pause over the next 12 months, largely due to current economic challenges. Many reservation holders could cancel. Even looking beyond the short term, to 2024 and 2025, the company’s outlook is murky.

Aside from the boost provided by the EV bubble, the reason RIVN stock got such a high valuation right after its 2021 debt was due to the presumption that it would eventually yield hundreds of thousands, if not millions. million vehicles per year.

However, even though this market is expanding, competition may limit future growth, and I’m not just talking about You’re here (NASDAQ:TSLA). The yet-to-be-released Cybertruck could theoretically leave Rivian’s flagship R1T electric pickup in the dust, but a bigger competitive threat could be electric truck offerings from incumbent automakers such as Ford (NYSE:F). Ford reportedly sold more electric trucks than Rivian in December.

My Rivian stock price target for 2025

Although the company is expected to continue to grow at a rapid pace, the long-term forecast still calls for negative earnings in 2023, 2024 and 2025. Given the increasing competition, it may prove difficult to exceed current expectations for sales growth over the next two years.

Even if the company is only meeting expectations by 2025, RIVN may remain stuck at or near current levels. If sales growth stagnates, results could fall short of expectations. Rivian’s losses could be reduced much more slowly than currently expected.

If that happens and cash burn remains high, this EV maker may need to raise more capital on dilutive terms. In turn, driving the stock down by 2025.

With more information suggesting average or negative performance in the coming years, RIVN stock is not an attractive comeback game at current prices.

At the date of publication, Thomas Niel has not held (directly or indirectly) any position in the securities mentioned in this article. Opinions expressed in this article are those of the author, subject to InvestorPlace.com publishing guidelines.

InvestorPlace.com contributor Thomas Niel has been writing individual stock analysis for online publications since 2016.

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