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On Wednesday, Truist Securities reaffirmed their Hold rating on Rivian Automotive Inc (NASDAQ:RIVN) with a steady price target of $14.00. With the stock currently trading at $12.37, InvestingPro data shows analyst targets ranging from $6.10 to $23.00, reflecting mixed sentiment in the market. According to InvestingPro analysis, Rivian’s current market valuation appears to be fairly priced relative to its Fair Value. The announcement came as Rivian disclosed the creation of a spin-off dedicated to micromobility, named Also. The new venture aims to commercialize a range of small electric vehicles, including e-bikes, neighborhood EVs, and microcars, and is set to launch with a $105 million investment from Rivian and the venture capital firm Eclipse.
Rivian will retain a minority interest in Also, with Rivian executive Chris Yu appointed to lead Also and Rivian CEO RJ Scaringe joining Also’s board. The spin-off marks a strategic move for Rivian, as they diversify their investments within the electric vehicle sector. InvestingPro data reveals that Rivian maintains a strong current ratio of 4.7, indicating robust short-term financial stability despite ongoing challenges in the EV market. Also is scheduled to introduce its flagship consumer product in the Fall of 2025, signaling the company’s entry into the consumer micromobility market.
Truist Securities analyst Jordan Levy commented on the development, noting the potential long-term value of Rivian’s minority stake in Also. Levy stated, "With Also planning to launch its flagship consumer product this Fall, in our view it’s too early to gauge what this could mean long-term for RIVN and would view the minority stake as long-term option value on the micromobility market at this stage."
The strategic move by Rivian to spin off Also and maintain a stake in the company reflects an investment in the future of micromobility, a sector that is gaining traction as urban areas seek more sustainable transportation solutions. Recent financial data from InvestingPro shows Rivian holds more cash than debt on its balance sheet, though the company is experiencing significant cash burn with negative free cash flow yield. The stock has shown resilience with a notable 8.8% return over the past week, despite broader market volatility. The funding from Rivian and Eclipse provides Also with a solid financial foundation to develop and market its small electric vehicles.
Investors and industry watchers will be looking forward to the Fall launch of Also’s flagship product to better understand the potential impact on Rivian’s business. The Hold rating and $14.00 price target by Truist Securities indicate a cautious but observant stance on Rivian’s stock as these developments unfold. For deeper insights into Rivian’s financial health, valuation metrics, and extensive analyst coverage, investors can access the comprehensive Pro Research Report available exclusively on InvestingPro, which includes over 12 additional key insights about the company’s future prospects.
In other recent news, Rivian has announced the spin-off of its micromobility unit, Also, Inc., with a $105 million investment from Eclipse Ventures. This strategic move aims to capitalize on the rising demand for smaller electric transportation options. Additionally, Rivian’s stock has seen mixed analyst reviews. Piper Sandler downgraded Rivian’s stock rating to Neutral, lowering the price target to $13 due to concerns over growth catalysts for 2025. Conversely, Benchmark maintained a Buy rating with an $18 price target, reflecting confidence in Rivian’s market position despite adjusted delivery forecasts.
Bernstein reiterated an Underperform rating with a $6.10 target, citing challenges such as low BEV penetration and limited product range. Rivian’s first-quarter vehicle delivery forecast was adjusted to 8,000 units, aligning with company guidance amidst seasonal demand impacts and recent events like the Los Angeles fires. The company has also announced a planned shutdown of its Illinois facility to prepare for the R2 platform launch in 2026. Rivian continues to navigate a complex market environment, marked by evolving investor sentiment and strategic adjustments.
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