Rivian: The VW Deal Could Be A Game Changer (Upgrade)

Summary:

  • Recent developments, including a joint venture with Volkswagen, have prompted me to upgrade Rivian stock to “Buy”.
  • Financial figures for Rivian show improvement in margins and cost-effectiveness, with expectations for reduced cash burn and increased efficiencies.
  • The joint venture with Volkswagen provides a significant financial backing for Rivian, potentially delaying cash burn issues and improving solvency.
  • The current cash-to-market cap ratio looks good, and since that ratio will only go up after the JV launch, I think RIVN has a good incentive to grow.
  • I’m upgrading the stock from “Hold” to “Buy”, as the “game changer” VW gave it seems to be a real one.

Winter Storm Texas

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Introduction

The first time I wrote about Rivian Automotive, Inc. (NASDAQ:RIVN) stock here on Seeking Alpha was in November 2021 – that was an IPO analysis where I concluded that the stock had been overvalued


Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha’s Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.


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