Rivian Automotive (NASDAQ:RIVN) has yet to fully recapture the excitement of its 2021 IPO, when at one point the company was valued at over $100 billion. During the ensuing years, the company’s share price has been dropping, and its market cap is now just south of $15 billion. RIVN’s share price has lost some 25% during the past twelve months.
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In the past, the company has missed production goals, and it remains unprofitable. However, Rivian has delivered positive quarterly gross profits during the past two quarters – $170 million in Q4 2024 and $206 million in Q1 2025, respectively.
One investor known by the pseudonym Weebler Finance thinks things could be looking up for RIVN, and is placing plenty of hopes in the upcoming R2 product line.
“I believe the launch will unlock a massive addressable market at a lower price point, which would help further help the company scale up,” explains the investor.
Weebler details that the R2 model, which is expected to start selling at $45,000, is aimed at more economic-focused buyers. Moreover, the R2’s material costs should be roughly half of the previous R1 model, supporting profitability.
“Once scale is achieved, I am confident that R2’s contribution margin could be materially positive, especially when Rivian’s existing Illinois facility is operating at full production capacity,” adds Weebler.
However, the investor is not quite ready to offer a full endorsement of RIVN just yet. The company’s valuation is a tad high for Weebler, who points out that its trailing Price-to-Sales ratio of 2.8x and EV-to-Sales ratio of 2.7x are above the consumer discretionary sector median of 0.98x and 1.31x, respectively.
In addition, the difficult macroenvironment contributes another layer of complexity, while “an R2 timeline slip could further damage investor enthusiasm.”
Though not “blind to its risks and its current pricing,” Weebler concludes that RIVN is one to watch closely going forward – and the investor is therefore assigning RIVN Hold (i.e. Neutral) rating. (To watch Weebler Finance’s track record, click here)
That seems to be the view on Wall Street as well. Its 15 Hold ratings outweigh its 7 Buy and 3 Sell ratings, giving RIVN a consensus Hold rating. Still, there is some cautions optimism present, as RIVN’s 12-month average price target of $14.74 has an upside just north of 13%. (See RIVN stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured investor. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.