Could This Be the Catalyst That Gives Rivian's Stock a Boost This Year?

Investing in a struggling company such as Rivian Automotive (RIVN +3.13%), which has seen its share price crater by more than 85% since going public back in 2021, can be extremely risky. But when a stock has declined by so much and when there’s a potential catalyst ahead, there may potentially be a good contrarian case for investing in it.

That’s the hope for Rivian stock this year, as the electric vehicle (EV) company is in the midst of launching its new R2 SUVs, which could lead to significantly more revenue for the business. Is the growth stock worth buying right now?

Image source: Getty Images.

The R2 could help Rivian reach a broader customer base

EVs haven’t generally been known for their affordability, but with the R2, Rivian hopes to make its new SUV much more accessible to a broader range of customers. The R2 Performance will be the first out of the gate, available this spring, at a starting price of $57,990. And late next year, its lowest price R2 Standard is projected to be available for as low as $45,000. By comparison, its current R1 models start at more than $70,000.

While consumers may need to wait a while for the lowest-price R2 model to be available, it may not take long to see how strong the demand is this year for the new line of EVs. The company projects that for 2026, it’ll deliver up to 67,000 EVs, which would be a sizable increase from roughly 42,000 vehicles last year.

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NASDAQ: RIVN

Rivian Automotive

Today’s Change

(3.13%) $0.47

Current Price

$15.32

Key Data Points

Market Cap

$18B

Day’s Range

$14.86 - $15.45

52wk Range

$10.36 - $22.69

Volume

833K

Avg Vol

33M

Gross Margin

-276.59%

Can Rivian’s stock turn things around this year?

Rivian’s stock is down 23% this year, as investors remain skeptical about the potential for its financials to show much improvement. This is a company that last year incurred an operating loss of nearly $3.6 billion, on revenue totaling $5.4 billion. The company’s razor-thin margins make profitability a huge concern for investors, and the launch of lower-priced vehicles might help grow sales, but they may not necessarily improve the company’s prospects for profitability anytime soon.

Plus, with competition ramping up in the EV market and economic conditions not all that strong these days, Rivian’s R2 vehicles may have a hard time taking significant market share. And even if they do well, that may still not lead to better overall financial results.

Rivian has a challenging road ahead, and without a path to profitability, I’d steer clear of it. There’s still plenty of risk and uncertainty that comes with the stock, and while the R2 might help give Rivian a growth catalyst, it likely won’t make it a better investment anytime soon.