Parkev Tatevosian, CFA on $RIVN (Oct 31, 2026)

For years, I've been warning investors to avoid Rivian stock, and as it has dropped from $125 to $100, I've made more videos to inform investors that it's still too expensive.

And as it dropped from 100 to 75, it reminded investors that it was still far too expensive to justify being considered a buying opportunity. I received a lot of comments and had several sessions with investors who argued that it was actually a buying opportunity, and I was suggesting that I did not think so.

The stock price continued to fall from 75 to 50, and from 50 to 25. Investors told me that the price at 25 was definitely a buying opportunity, and I didn't think so. The stock continued to fall from 25 to 20, then to 15, and time and time again I warned investors that the situation was not a good opportunity in my opinion when balancing risks with returns.

Today, stocks have fallen 90% from their all-time high, hitting a new 52-week low. Rivian's stock price is at $11.51, and I hope you've seen at least one of my videos over the past five years or more, in which I've talked about how overvalued this company is.

But today, finally, I am upgrading Rivian stock to a "buy" rating. It has finally reached a point where the risk-to-reward ratio is attractive to long-term investors.

You can see my spreadsheet here where I upgraded Rivian stock to a buy opportunity with a medium conviction level on October 26, 2026, as the company prepared to announce its quarterly financial results in a few days.

Today I reviewed my estimates for Rivian's free cash flow for the coming years, as I have been doing all these years, and almost every time my estimates come in lower.

I am pessimistic, and I was pessimistic about the company's ability to generate free cash flow, and over the years the situation has worsened because demand for its vehicles has never reached the levels the management team had hoped for.

Even after today’s downward revisions, Rivian’s fair value was estimated at $13.60, and with the market price hitting a new low of $11.43, it is now undervalued by about 20%.

However, as I mentioned, my reviews have been declining more and more over the past few years. As much as you thought I was pessimistic about Rivian, the situation was actually worse than I estimated.

Today I lowered my estimates for Rivian by a few hundred million. The problem with the company is that it has built up manufacturing capacity at a level it cannot maintain. This means that it has the manufacturing capacity to produce more than 200,000 vehicles annually, but it cannot sell, and does not expect to sell, more than about 65,000 units this year, which would be one of its best years in history.

Therefore, even in a record year, the company will only produce a small fraction of its available manufacturing capacity. It also has plans, and has built a second manufacturing facility that is currently under construction.

Construction work has been halted because demand was nowhere near what the management team had hoped it would be at this point in time.

In addition to the attractive valuation, another reason for my upgrading Rivian stock to a buy opportunity today is that Rivian's management team has done a reasonably good job under the difficult circumstances they have faced.

With the exception of their first decision, which did not work very well, namely predicting the demand for electric vehicles, which was greatly exaggerated. Apart from that mistake or poor expectations, I don't like to use the word mistakes when I talk about management teams because the vision is always clear in retrospect.

It was a decision they made based on the information they had.

But, aside from that, they made sensible decisions to move forward given the circumstances they faced, given the economy, and given the situation. Therefore, the evaluation has now become more attractive.

The businesses have become more mature. The competitive advantages have evolved significantly compared to two years ago. And so, I now feel that it is finally an attractive time to buy Rivian stock.