Parkev Tatevosian, CFA on $RIVN (Nov 5, 2026)

A few months ago, Rivian launched its most affordable model, the R2, and it had an excellent start. The results were so successful that Rivian raised its 2026 sales forecast to nearly 70,000 units sold, up from a previous estimate of nearly 60,000 units.

Of course, I recently upgraded Rivian's stock rating to "buy" when it was around $11 per share, so I'm pleased to see the company succeed so soon after that upgrade.

But do I still think it's a buying opportunity after the company announced its quarterly update to investors? I want the answer to this question here. I upgraded the stock, to be more precise, on October 26, when Rivian stock was trading at around $11.

Its price reached $11.80. Its lowest price was $11.42. Since then, the share price has risen significantly. Today it has exceeded $13.

However, if we look at the longer term, since the beginning of 2026, Rivian investors have been deceived before when they thought that $15 was definitely the bottom. The stock bounced back from that low level, only to fall back to around $13 a share in April, and investors thought that "$13 is definitely the bottom," then the stock rebounded from that level.

It reached $20 per share before dropping back down to $11 . And now it is bouncing back from that low level again, and investors may feel the same way . Surely $11 was the bottom , and now it's bouncing back and will rise from here.

So, let's not get too comfortable believing that this was the bottom and that Rivian's stock will rise from here .

The recent success has been positive. The launch of the R2 has been going extremely well, much better than I expected, and the development of self-driving car technology could be a huge driver of high-margin revenues in the near term.

In the long term, Rivian's sales have increased significantly since 2024 when it achieved sales of approximately $4 billion. It has risen to more than $6.4 billion over the past twelve months.

This is impressive considering the difficult macroeconomic background that Rivian has faced. Industry demand for electric vehicles in the United States has not risen as much as the management team initially thought.

Furthermore, policy changes by the current administration to eliminate incentives for purchasing electric vehicles have further reduced demand for them.

Despite those economic headwinds, Rivian has performed reasonably well in advancing its roadmap and establishing partnerships with Volkswagen and Uber to expand its opportunities.

Currently, Rivian is still losing large amounts of money in its net profits, but these losses are improving. An operating profit margin of -53% is better than -130% in 2024.

If they continue to increase production of these models and offer the lower-priced version of the R2, which targets $45,000, I expect their operating profit margin to continue to improve from there.

The main reason I upgraded Rivian stock as a buy opportunity is the progress in developing that lower-priced model, coupled with customer adoption of these models and increased sales, as well as the valuation.

Remember that Rivian's stock is down about 90% from its all-time high. For years , I have been warning investors to avoid Rivian, that it is still too early to say, and that the valuation was too expensive given the company's prospects .

But in late October, when I upgraded the rating to buy, the situation looked more attractive .

Currently, the stock is trading at a price-to-forward ratio of 1.675, which still looks like an attractive opportunity for a company that is conducting its business effectively amid a very challenging macroeconomic background .

Therefore, today I also updated my assessment of Rivian's discounted cash flows, and raised my estimates of the free cash flow I expect the company to generate between today and the very long term due to its early success with R2 and the success of its self-driving technology.

I now calculate that the company is worth $15.50. This is 16% higher than the current market price of $13. Therefore, it seems slightly undervalued to me whether you measure it using discounted cash flows or the price-to-forward sales ratio .

Therefore, today I reaffirmed my buy rating on Rivian stock due to its success. It is one of the higher-risk stocks you can buy, and is expected to generate negative free cash flow for a few years.

But I think the return on risk is worth it for this electric vehicle company.