Chip stocks fall with Nvidia after data center rev disappointment
Investing.com - Needham has reiterated a Buy rating and $14.00 price target on Rivian Automotive Inc (NASDAQ:RIVN) ahead of the company’s R2 vehicle launch. With the stock currently trading at $13.09, InvestingPro data shows analyst targets ranging from $7.55 to $21, reflecting the market’s mixed outlook on this volatile EV maker.
The firm’s analysis supports the rating based on end-market diligence and a consumer survey conducted in metropolitan areas with low electric vehicle penetration. The R2 is Rivian’s mid-size SUV with an approximate $50,000 average selling price, which will substantially expand the company’s total addressable market beyond its more expensive R1 vehicle. InvestingPro analysis reveals the company maintains strong liquidity with a current ratio of 3.44, though it faces profitability challenges with negative gross margins.
Needham views the potential market opportunity for the R2 as encouraging when compared to current electric and internal combustion engine offerings at similar price points. The firm finds this especially notable against what it describes as modest consensus delivery estimates for the R2 in fiscal year 2026.
Survey results revealed strong brand awareness for Rivian, limited negative perception, and encouraging purchase intent among consumers. These factors position the company favorably to capture market share as the R2 enters the mid-size SUV segment.
Needham’s $14 price target represents 15 times enterprise value to the firm’s fiscal year 2028 estimated adjusted EBITDA, discounted back to present value.
In other recent news, Rivian Automotive Inc. is facing a delay in $100 million in revenue due to the rollback of fuel economy rules under the Trump administration. The National Highway Traffic Safety Administration has stopped issuing documentation necessary for finalizing credits linked to these regulations, impacting Rivian’s financials. Benchmark has reiterated a Buy rating on Rivian, maintaining an $18 price target, expressing confidence in the company’s growth potential and operational execution. However, Morgan Stanley has lowered its price target to $12, citing concerns about the R2 vehicle launch and demand challenges. DA Davidson also reduced its price target to $13, highlighting profitability challenges and the impact of tariffs on per-vehicle profit. Stifel adjusted its price target to $16, pointing to concerns over EV tax credits and production line issues. These developments indicate a mixed outlook for Rivian, with varied analyst opinions reflecting the company’s current challenges and opportunities.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.