The Rivian stock price has been in a downward trend in the past few weeks. The shares were trading at $32, which was about 15% below the highest level in September. This price is about 67% from the lowest level this year. The Amazon-backed company now has a total market cap of more than $26 billion, making it one of the biggest automakers globally.
Is Rivian the next Tesla?
Rivian is a leading electric vehicle (EV) company that focuses on trucks and sport utility vehicles (SUV). The firm’s main vehicle models are R1T and R1S, which have received positive reviews from customers and experts.
Rivian, unlike other EV companies like Lucid, is targeting large industries. SUVs and trucks are highly popular in the United States. A recent study estimated that the SUV market size will soar to $45 billion by 2030.
Therefore, if Rivian succeeds, there is a likelihood that the company will be a leading player in the auto industry. However, the biggest concern is the rising competition in the industry. Tesla is building its CyberTruck while legacy manufacturers like Ford and General Motors have already unveiled their EV trucks.
Still, for now, it seems like the demand for Rivian trucks remains significantly high. In its recent results, the firm said that it produced 7,300 vehicles in the third quarter and delivered 6,600. It made over $536 million in the quarter while a negative gross profit of $917 million in Q3.
The firm expects that it produced about 25,000 total vehicles for the year. That is a strong number considering that it started manufacturing in 2020. Therefore, there is a likelihood that the company will do well in the next few years. It has a strong order book and a robust balance sheet with $14 billion in cash.
Rivian stock price forecast
The four-hour chart shows that the RIVN stock price has been in a downward trend in the past few weeks. In this period, it has formed a descending channel that looks like a falling wedge pattern. In price action analysis, this pattern is usually a bullish sign. It has also moved slightly above the 25-day and 50-day moving averages.
Therefore, in the long-term, I suspect that the Rivian stock price will have a bullish breakout. If this happens, the next key resistance level to watch will be at $40.85. A drop below the lower side of the channel will invalidate the bullish view.
