Investors who’ve been hanging on to Rivian (RIVN) stock for the past few months are now getting the rewards.
Shares of the electric car maker are on fire, rising nearly 90% in the past nine sessions. On Monday, Rivian shares closed at $25.51, nearly double their closing price of $13.45 on June 26.
Shares were boosted by positive catalysts over the past week, including Rivian’s production and delivery targets. Rivian recently confirmed that it is “on track to deliver the previously provided 50,000 annual production guidelines.”
“The worst in the rearview mirror”
Rivian’s reaffirmation of its delivery targets helped the stock increase its price target to $30 from $25 by Wedbush Securities.
“Production came out of the gate—it was excuses. It was one step forward, two steps back for 4 or 5 quarters. Now (they) finally have turned the corner, and I think the worst is in the rearview mirror,” Wedbush analyst Dan Ives told Yahoo Finance. Monday.
“From a valuation perspective, $30 could be a base case,” he added.
Rivian’s path has been rocky after a stunning initial public offering in November 2021 when shares traded as high as $179 per share at the height of investor sentiment about electric cars and the stock market in general.
Shares touched an all-time intraday low of $11.26 on April 26 of this year.
Some of the stock’s recent upward movement can also be attributed to investors betting that the price will drop. According to the data analytics firm, Rivian’s short interest rate is currently sitting at a 12.34% float. S3 partners.
“Most of the rally in RIVN’s price has occurred over the past several weeks. As a result, we’ve seen covering shorts in the stock,” Ihor Dusanewski, managing director of S3 Partners, told Yahoo Finance on Monday.
Electric vehicle stocks have been mostly in an uptrend for weeks now after the S&P 500 entered a new bull market led by enthusiasm about the prospects for artificial intelligence.
Electric vehicle stocks joined the market rally as investors expected the Federal Reserve to pause its aggressive interest rate hikes in the wake of sluggish inflation data.
The valuations of companies that haven’t shown a profit have fallen precipitously since the Federal Reserve began tightening monetary policy more than a year ago. Rivian shares currently trade about 75% below the $103.32 level at the beginning of January 2022. Supply chain challenges last year initially hampered Rivian’s production goals, which also sent the stock lower.
Some of the smaller EV players have yet to recover from their downward trajectory. Lordstown Motors (RIDE) recently filed for Chapter 11 bankruptcy, highlighting the ups and downs of electric vehicle startups whose shares have gone to the moon and back during the pandemic.
Ennis is a Senior Business Correspondent at Yahoo Finance. Follow her on Twitter at @tweet
