Key Takeaways
- Rivian shares rose 6% today in a market rally after Democrats swept the House and Senate, with no news from the company.
- Investors bought EV stocks along with the market: Lucid and NIO also rose, while Tesla fell on Elon Musk’s election losses.
- Rivian’s cars still lost $80 million at the gross level last quarter, and it burned $1.12 billion of free cash flow.
- Management plans to exit the fourth quarter at an automotive gross profit, which results early next year will show.
Rivian Automotive (RIVN) is up 6% today without a word from the company. Democrats swept Congress in Tuesday’s midterms, and the S&P 500 rose 2% and the Nasdaq 2% this morning.
Lucid Group (LCID) jumped 12% and NIO (NIO) rose 6%, while Tesla (TSLA) fell 2% on what Elon Musk’s election-night losses could mean for his companies.
Same election, opposite moves
Musk spent hundreds of millions of dollars backing Republicans, and coverage of Tesla’s drop cites the risk of tighter AI rules and merger scrutiny. Tesla sells regulatory credits like Rivian does, so friendlier EV rules would help both: investors were selling Musk’s political clout. Tesla earned just $718 million of operating income on $28.0 billion of revenue last quarter, so its 189x forward earnings at Tuesday’s close is a bet on robotaxis and robots, the businesses tighter AI rules would hit.
Lucid’s jump had even less behind it: it delivered 3,806 vehicles in the third quarter, 6.7% fewer than a year earlier, after cutting production, and it reports next week. NIO sells mostly in China, and it rose on a US election anyway.
TIKR tracks 25 analysts on Rivian. How many say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on Rivian, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See Rivian’s Analyst Ratings
Rivian’s real test comes in December
Today’s gain adds to a 16% climb from Rivian’s Oct. 29 report to Tuesday’s close, helped by two analyst upgrades on early R2 demand. Third-quarter revenue rose 38% to $2.16 billion, and analysts expect sales to nearly triple from 2025 to 2028:
Nothing in today’s rally gives them a reason to revise those numbers. And Rivian traded at 1.8x forward sales at Tuesday’s close, under its three-year average of 2.7x:
The catch is the cash. Its car business lost $80 million at the gross level, with about $120 million of R2 ramp costs, and free cash flow was negative $1.12 billion:
Management plans to exit the fourth quarter at an automotive gross profit, though not for the full quarter. Rivian needs positive gross margin to draw on its Department of Energy loan of up to about $4.5 billion.
Frankly, today’s gain is the market’s doing. Rivian still has to show that gross profit by year-end, and a miss would make another stock sale more likely. Of course, we won’t see those results until early next year.
So what is Rivian stock actually worth?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
