As 2025 kicks into gear, there are many high-potential stocks for investors to buy. Rivian Automotive (RIVN -4.60%), however, isn't one of them.
An analyst tracking the stock maintains that it's undoubtedly a sell, even though he recently boosted his price target considerably. Here's a closer look at this bearish take on the high-profile electric vehicle (EV) company.
A big boost from a professional bear
Last Friday, Garrett Nelson of CFRA boosted his Rivian target price to $8 per share, which is 60% higher than his previous tag of $5. He's sticking to his sell recommendation regardless, because even with the increase, the current price target is 51% below the stock's most recent closing level.
On that day, several analysts made adjustments to their Rivian evaluations. That's because in the morning, the company published its fourth-quarter and annual tallies for production and deliveries. Happily for shareholders, both numbers exceeded the consensus pundit estimates; quarterly production amounted to 12,727 vehicles, and the delivery figure was 14,183.
Those numbers also exceeded Nelson's modeling, but he pointed to other concerns that the market would do well to keep its eye on. He expressed skepticism that the company achieved positive gross margins in its sales, as it hoped to do. He also feels the rates of cash burn for the historically unprofitable EV maker continue to be worryingly high.
Getting there, but...
Rivian's latest news was almost unarguably positive, but success in the auto industry is a high mountain to climb.
Scale is the key here, since production of any type of vehicle these days is very capital and resource consuming; even the most powerful companies in the business struggle to make meaningful profits at times. Rivian hasn't yet proved that it can produce at a sufficient enough scale to be a reliably profitable operator, and given that, I'd be a bit wary of its stock.
