Rivian receives $1 billion investment from Volkswagen, leading to stock surge

From Nasdaq: 2024-07-05 10:56:38

Rivian Automotive (RIVN) secured a significant investment from Volkswagen AG, boosting liquidity and industry partnerships. Guggenheim issued a “Buy” rating on Rivian. The company reaffirmed annual production guidance, with 9,612 vehicles produced in Q2. Rivian aims for positive gross profit in Q4 and positive EBITDA by 2027, with a focus on cost reductions and profitability. Analysts see potential for the stock to rally on improved financial performance.

Rivian stock performance has been mixed, with a 27.5% gain in the past month but a 37.8% drop YTD. The company reported strong revenue growth in Q1, driven by higher deliveries and increased pricing. Despite an adjusted loss per share, Rivian aims to improve gross profit margins with cost efficiency measures and product upgrades. Long-term profitability remains a goal.

Volkswagen’s $1 billion investment in Rivian led to a joint venture for next-gen EV technology. Rivian stock surged 23% post-deal. The partnership reduces liquidity risks and enhances scale for Rivian, positioning it to compete with industry leader Tesla. Analysts view the investment as a positive endorsement of Rivian’s growth potential. Collaboration prospects with Volkswagen signal further upside for Rivian.



Read more at Nasdaq: Is Rivian Stock a Buy After Its Billion-Dollar Cash Injection?