‘Load Up,’ Says Top Investor About Rivian Stock

The stock market motto of “buy low, sell high” is a well-worn phrase, but for good reason. Buying a stock when it’s in the doldrums represents the right play for big profits, but it’s easier said than done. After all, there is a reason why a stock is at a low level, sometimes it is right, but not always; that’s where the big opportunity presents itself.

Look at the case Rivian (NASDAQ:RIVN)With EV stock down 62% year-to-date, 5-star investor Gary Alexander believes the time is right to load, citing its low valuation as a compelling reason.

“Fears are currently exaggerated for Rivian, which is still a well-recognized, accelerating electric vehicle manufacturer. I would take advantage of the current low stock prices as a good time to buy,” Alexander continued.

Rivian is far from the only EV stock to make a big move this year, as the once-popular sector faces a combination of weak demand, high-end conditions and intensifying competition as several incumbents vie for a piece of the fledgling industry. It’s highly likely that only a select few names will cross over to the other side, and Alexander thinks Rivian boasts the credentials to do so.

While its share losses can be attributed in part to the prevailing negative sentiment about EVs, other factors have also contributed. Rivian’s flat production forecast for the year fell short of expectations, and major Ford’s recent announcement of a price cut on its F-150 Lightning electric truck poses a challenge to Rivian’s competition. However, despite these problems, Rivian still has a lot of power.

According to Alexander, Rivian has a “differentiated brand” that sets it apart from segment leader Tesla, boasts a strong partnership with Amazon and has $7 billion+ in cash that provides “sufficient liquidity as it continues to grow.”

Additionally, it has made significant strides to get its profit profile in good shape, improving gross profit per unit by more than $80,000 last year, while it expects to reach a net profit margin by the end of 2024. There’s also an affordable car more in the pipeline, the R2, a mid-size SUV that will retail for as little as $45,000, though it will only be available in 2026.

“Overall,” Alexander concluded, “due to the recent price collapse, I upgrade my view on Rivian to Strong Buy and recommend investors aggressively buy this dip.” (To view Alexander’s recording, click here)

Street analysts offer a more balanced view, though bulls still run the narrative. With a mix of 12 Buy, 8 Hold, and 3 Sell recommendations, the stock warrants an Average consensus rating of Buy. I definitely think stocks are now undervalued; at $16.91, the average target represents a one-year return of 90%. (See Rivian stock forecast)

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Disclaimer: The views expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.