Rivian's stock is down big since going public in 2021.
Contrarian investors could be getting a steal.
As one of the best investors in history, Warren Buffett has uttered many quotable comments over the years. And while he hasn't directly discussed Rivian Automotive (NASDAQ: RIVN) in public, his holding company was an early investor in a competitor, BYD, which has become one of the largest EV stocks in the world.
Still, there are two famous Warren Buffett quotes that could apply to Rivian, and both make me excited about Rivian as a long-term investment.
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In 2021, Rivian, as a company and as a stock, was doing great. Many businesses focused on climate-friendly technologies went public that year at wild valuations. Within weeks of its IPO, Rivian stock traded with a market cap above $150 billion.
Fast forward to today, and conditions have changed dramatically. Rivian's market cap is down to just $18 billion. Its price-to-sales ratio, meanwhile, is significantly lower than peers like Lucid Group and Tesla. EV stocks in general -- with the notable exception of Tesla -- have fallen out of favor in the market. Rivian's lackluster growth rates in recent quarters are what's suppressing its stock price.
But according to Buffett, this could be exactly the time to buy.
Image source: Getty Images.
"Be fearful when others are greedy," Buffett once advised, "and greedy when others are fearful." Rivian's valuation is among the lowest in its trading history right now. But when it comes to growth potential over the next few years, Rivian arguably has a chance to outpace both Lucid and Tesla due to the launch of three new affordable models in 2026. When Tesla launched its affordable models -- the Model Y and Model 3 -- growth exploded.
This leads to the second Warren Buffett saying: "The best chance to deploy capital is when things are going down." Both Lucid and Tesla stocks got price bumps due to their robotaxi ambitions. Rivian, meanwhile, was left in the dust for lack of hype. But contrarian investors could lock in an attractive entry price right before growth returns.
Take a closer look and see if Buffett is right.
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Ryan Vanzo has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool recommends BYD Company. The Motley Fool has a disclosure policy.