Is Rivian stock a buy: 5 key reasons to invest before February 20

Rivian (NASDAQ: RIVN) is set to release its fourth quarter 2024 and full year 2024 earnings on February 20, and the outlook for 2025 is anticipated to be more optimistic than the previous year.

Rivian is an electric vehicle (EV) manufacturer specializing in trucks, offering two types of vehicles: a high-end consumer model and work trucks for business clients. The company’s relationship with Amazon (NASDAQ: AMZN) serves as a significant endorsement of its product quality. Rivian has also received numerous awards for its consumer-oriented vehicles.

Having increased its production from zero to approximately 50,000 vehicles per year, Rivian still operates at a lower scale compared to rivals such as Tesla and Ford, but this production volume allows for some economies of scale. In 2024, Rivian focused on reducing its manufacturing costs after building out its production capabilities, which included temporarily shutting down its factory for retooling. The company aims to achieve a modest gross profit in the fourth quarter, indicating that the revenue from vehicle sales is expected to cover production costs. However, Rivian is not yet focused on net earnings, as additional expenses beyond gross profit remain.

Rivian stock climbs on new analyst praise

Challenges arose when Rivian experienced parts shortages following the factory’s restart, which led to a reduction in its full-year production targets. Despite these difficulties, the company managed to maintain some production by leveraging its relationship with Amazon. By the time Rivian announced its full-year 2024 production numbers, it communicated that the parts issue had been resolved.

The upcoming earnings report on February 20 is crucial, as investors anticipate news of a modest gross profit, which could indicate a significant turning point for Rivian’s business.

Rivian’s stock has fallen significantly from its peak, yet expectations for a return to such highs may be unrealistic given shifting investor sentiments towards electric vehicles. Nonetheless, as the company works toward profitability, there is potential for the stock price to rise substantially from current levels, particularly following the February earnings announcement that will provide insights into gross profit and 2025 plans.

5 reasons to consider buying Rivian (RIVN) stock now:

• Optimistic 2025 outlook: Rivian is projecting a more promising 2025, with expectations of improved profitability and growth.
• Increasing production: The company has ramped up production to 50,000 vehicles per year, suggesting operational growth and economies of scale.
• Resolving supply chain issues: Rivian has overcome its parts shortages and has addressed production challenges, signaling smoother operations ahead.
• Modest gross profit expected: Rivian is on track to achieve a modest gross profit in Q4 2024, a potential turning point towards profitability.
• Strong Amazon partnership: The company’s relationship with Amazon provides significant validation and ongoing business support, especially in fleet deliveries.

Disclaimer: The content of this article is for informational purposes only and should not be construed as investment advice. We do not endorse any specific investment strategies or make recommendations regarding the purchase or sale of any securities.

Featured image credit: Rivian