2024-04-05 03:41:29 ET
Summary
- Rivian's recent financial results show a widening gross loss, raising concerns about the viability of its business model.
- The company plans to optimize operating expenses by reducing employees, which could increase operational risk.
- Rivian's valuation has seen an improvement, but it's an illusion, in my view - read on to find out why.
- In my view, it's not yet the opportune moment to invest in Rivian stock. But the show is worth watching.
Introduction
The history of my coverage of Rivian Automotive ( RIVN ) stock began in November 2021 - it was an IPO analysis that concluded that the company was heavily overvalued. Immediately after the IPO, the stock started to grow very strongly and moved away from logically explainable levels - during that growth, I updated my "Sell" recommendation, which remained valid until June 2023, when I upgraded RIVN to "Neutral" . At that time, I had the impression that the company’s situation was beginning to improve: Margins were showing clear signs of growth at the time, but the high valuation and the risk of strong competition did not allow me to assign a "Buy" rating....
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For further details see:
Rivian: Why I'm Not Impressed