Should you buy Rivian stock? (July 2024)

Published first at https://www.3minutebreakdowns.com Rivian stock analysis. Ticker: $RIVN Rivian jumped 36% last week after Volkswagen announced it was investing $5 billion dollars in the company. Shares have fallen back slightly taking the company’s market cap to 14.6 billion. With 7.9 billion of cash and investments on its balance sheet and 4.4 billion of debt the enterprise value is just under 11 billion. The fundamentals for Rivian don’t look good. Gross margins are shapely negative at minus 41%. Over the past 4 quarters, for every dollar Rivian has made in revenue, its lost more than a dollar in free cash flow. Revenue might have grown to 5 billion over the last 12 months but earnings before interest taxes depreciation and amortization is negative 3.8 billion and free cash flow at negative 5.6 billion is even worse. Adding to the concern is Rivian’s balance sheet. The company’s pile of cash and investments is enough to cover just six quarters at the current rate of cash burn. And when you consider Rivian is guiding for growth of just 14% this year, the stock looks like an obvious avoid. It;s not surprising investors are shorting the stock with a short interest over 18%. But as bad as the numbers look, it’s worth remembering that automotive manufacturing is capital intensive and it takes time for startups to build the scale needed. Tesla, after all, took 18 years to turn its first profit. #investing #stocks #rivianstock #3mb