Should You Buy Rivian Stock While It’s Below $17? | The Motley Fool

Rivian (RIVN -2.28%) posted its second-quarter earnings report on Aug. 5. The electric vehicle maker’s revenue rose 13% year over year to $1.3 billion, exceeding analysts’ expectations by $10 million. Its total deliveries declined 23% to 10,661 vehicles, but it offset that pressure with rising software and service revenues.

Unfortunately, its gross margin — which turned green in the first quarter of 2025 — turned red again in the second quarter. It only produced 5,979 vehicles during the quarter, which marked a 38% drop from a year ago. It narrowed its net loss from $1.5 billion to $1.1 billion, but its loss of $0.80 per share still missed the consensus forecast by $0.16.

Rivian’s mixed numbers didn’t impress the market, and the stock remains 30% below its 52-week high of $17.15 on May 20. Should you buy it before it bounces back?

Why isn’t Rivian impressing investors?

Rivian sells three types of EVs: the R1T pickup, the R1S full-size SUV, and electric delivery vans for its top investor Amazon and other customers. Before its IPO in November 2021, Rivian claimed it could produce 50,000 vehicles in 2022. But this is what actually happened over the the past three and half years:

Data source: Rivian.

Rivian grappled with supply chain constraints in 2022. Its production and deliveries accelerated in 2023 as it overcame those challenges, but its expansion stalled out again in 2024 as rising interest rates chilled the high-end EV market, more competitors carved up the market, and it temporarily shut down its main plant to upgrade its production lines.

For 2025, it expects to only deliver 40,000 to 46,000 vehicles. Analysts expect its revenue to rise 6% to $5.29 billion as it slightly narrows its net loss to $3.7 billion. It blames that slowdown on ongoing supply chain challenges, higher tariffs on raw materials and batteries, and another shutdown of its main plant as it gears up for the rollout of its smaller R2 SUV in 2026. That dim near-term outlook is weighing down Rivian’s stock.

Could Rivian be a deep value play?

Rivian is struggling to scale up its business, but it expects the R2’s launch to attract a much broader range of customers. It also plans to keep selling its regulatory credits to other automakers while expanding its software and services segment to boost its gross margin.

At the end of the second quarter, it still had $8.52 billion in total liquidity — including $7.51 billion in cash, cash equivalents, and short-term investments. That cash should carry it through the launch of the R2 and help it ramp up production as the macro environment improves. If it can pull that off, analysts expect Rivian’s revenue to rise 34% to $7.1 billion in 2026 and grow another 52% to $10.8 billion in 2027. They also expect it to gradually narrow its net losses.

With an enterprise value of $13.2 billion, Rivian trades at just 2 times next year’s sales. That makes it look like a value play compared to Tesla, which trades at 9 times next year’s sales. Therefore, any positive news could cause Rivian’s stock to double or triple — and it would still be considered reasonably valued relative to its growth potential. That might be why insiders bought slightly more shares than they sold over the past 12 months. Amazon also hasn’t sold any of its shares in Rivian since its IPO, and Rivian is still supported by other big investors like Porsche and the Saudi Arabian conglomerate Abdul Latif Jameel.

Rivian is still a highly speculative stock, and there’s no guarantee it can overcome its growing pains and evolve into another EV giant like Tesla. But if it gets its act together, expands its addressable market with the R2, and ramps up production, it could eventually command a much higher valuation. So if you have faith in Rivian’s long-term growth plans, then it’s worth accumulating while it trades so far below its 52-week high.