Rivian stock price has suffered a harsh reversal in the past few weeks, erasing some of the gains it made in the fourth quarter. RIVN tanked by over 7% on Wednesday, bringing it to the lowest level since December 15. It has now plunged by over 22% from its December high, while the short interest has jumped to 12.85%.
Wall Street analysts are pessimistic about Rivian stock
Rivian stock price has been in a strong downward trend in the past few days as analysts have remained concerned about its business amid the substantial losses and the softening of the electric vehicle market.
Data compiled by MarketBeat shows that the company is tracked by 29 analysts. Eight of them have a sell rating, while 12 have a hold. Only 9 analysts have a buy rating for the company.
Rivian stock plunged on Wednesday after Joseph Spak, a UBS analyst, downgraded it from neutral to sell and set a target of $15, representing a 20% drop from the current level.
Wolfe Research also downgraded the stock from peer perform to underperform, while Morgan Stanley moved it from equal weight to underweight.
These analysts are worried about the company’s business, including its balance sheet and the fact that it may dilute investors again this year. In a statement last year, the CEO warned that it may be forced to raise additional capital this year.
At the same time, there are concerns about the EV industry after the end of the EV tax credit. Indeed, companies like Ford and General Motors have been forced to issue huge charges on their EV businesses.
Additionally, Wall Street analysts are concerned that its autonomy technology is much behind that of its rivals like Tesla and Waymo.
Recent growth is not sustainable
The most recent results showed that Rivian’s business did well in the third quarter as Americans rushed to buy before the end of the EV tax credit. As a result, its revenue jumped by 74% YoY to $1.55 billion.
However, its profitability remained in the red, with the net loss rising to over $1.16 billion. It lost $2.8 billion in the first nine months of the year.
The company ended the quarter with over $6 billion in cash and short-term investments, meaning that there is a risk that these funds will continue being drained as its losses continue.
Analysts expect that its fourth quarter revenue will come in at $1.27 billion, down by 25% from the same period a year earlier. This revenue will bring its annual figure to $5.37 billion and loss per share to $3.23.
Analysts expect that its revenue will rise to $6.8 billion this year because of the upcoming R2 launch, which will happen in the first half of the year. Its loss per share is expected to be significant at $2.93.
Rivian share price technical and Wyckoff Theory analysis
The three-day chart shows that the Rivian share price has remained in a tight range in the past few years. It has remained between $8.72 and $27.80 since June 2023.
The stock has remained at the 50-day and 100-day Exponential Moving Averages (EMA). Therefore, there are signs that the stock is in the accumulation phase of the Wyckoff Theory, which is characterized by consolidation, as we saw with Zcash.
As such, while fundamentals suggest that the stock has more downside to go, the Wyckoff Theory suggests that it may rebound later this year, especially when the R2 launch happens.
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