Rivian Stock Analysis: Q3 Earnings Exceed Expectations – Is Now the Time to Buy RIVN Stock?

TradingKey - Emerging EV company Rivian (Nasdaq: RIVN), once considered a "Tesla killer" for its focus on high-end electric SUVs and trucks, reported better-than-expected Q3 earnings in November 2025, leading to a monthly stock surge of over 30%. However, the company's market capitalization has plummeted by approximately 90% from its peak.

Amidst headwinds in the electric vehicle market, Rivian's performance has remained sluggish. Elon Musk once stated that among the tens of thousands of auto startups in the U.S., only Ford and Tesla have avoided bankruptcy. Is buying Rivian a good choice now? Can Rivian's stock reclaim its former heights?

Recent Rivian news (NASDAQ: rivn)

Rivian reported strong third-quarter results on November 4, 2025, with revenue surging 78% year-over-year to a better-than-expected $1.56 billion. The electric vehicle maker posted a gross profit of $24 million, significantly outperforming FactSet's forecast of a $38.6 million loss. Vehicle deliveries reached 13,201 units.

A significant portion of Rivian's software and services gross profit stems from its collaboration with Volkswagen AG. Their joint venture, RV Tech, has made substantial progress in software development. The new system is slated for winter testing in early 2026, utilizing test vehicles from Volkswagen, Audi, and Scout. Both companies aim to profit by selling the electric vehicle technology they jointly develop. Furthermore, Volkswagen plans to inject an additional $1 billion into Rivian upon the successful completion of these winter tests.

In terms of production plans, Rivian intends to launch its more affordably priced R2 SUV in 2026, with production slated to begin in the first half of the year.

Rivian announced in November the formation of Mind Robotics, a new subsidiary focused on industrial AI and robotics. This entity has secured $110 million in external funding. This marks Rivian's second corporate spin-off this year; earlier in March 2025, the company divested its micro-mobility division, establishing it as the independent firm, Also.

Rivian stock price historical trend

November 2021: IPO Peak

Rivian Automotive Inc. went public on November 10, 2021, with its IPO priced at $78 per share for 153 million shares.

On its IPO debut,Rivian’s shares surged 37% at open,trading at $106.75 per share and briefly climbing over 50% intraday.The company’s market capitalization exceeded $90 billion, surpassing established auto giants General Motors (GM) and Ford Motor Co. (F). By the end of that day, Rivian closed up 29.14% at $100.73, reaching a market value of $85.9 billion. Within a week of listing, Rivian’s stock price peaked on November 16 at arecord closing high of $172.01, pushing its market capitalization over $150 billion.

This impressive surge was largely driven by market fervor for the electric vehicle (EV) sector. At the time, tightening emission standards and the commercial success and soaring valuation of EV pioneer Tesla fueled optimistic sentiment toward electric vehicles. Furthermore,Amazon’s 20% stake in the company, coupled with a contract requiring Rivian to supply 100,000 electric delivery vans over 10 years, also boosted Rivian's profile and investor interest.

Late 2021 - Mid-May 2022: Persistent Decline

After reaching its historical high on November 16, 2021, Rivian's stock began to recede.

Rivian faced an immediate setback at the start of 2022, falling below $100 on January 4. On January 10, Rivian disclosed that it had missed its 2021 production and delivery targets and confirmed the departure of CEO Rod Copes, causing the stock to drop below its IPO price that same day.

By May 11, the stock had plummeted to its lowest closing price since listing, at $20.6.

Mid-May 2022 - April 2024: Volatile Downtrend

Rivian hit an all-time intraday low of $8.26 on April 16, 2024, representing a more than 95% decline from its peak of $172.01.

Rivian's continuous decline after its late 2021 high was primarily due to overly optimistic market expectations for both the EV market and Rivian itself, leading to a valuation bubble. In addition, Rivian repeatedly failed to meet production targets, incurred prolonged losses, and continuously depleted its cash reserves, sparking market concerns about its manufacturing and R&D capabilities, as well as its financial health.

Furthermore, this period coincided with a challenging macroeconomic environment. In 2022, the Federal Reserve hiked interest rates seven times, including a 75-basis-point increase, leading to soaring interest rates. Consequently, the appeal of high-risk assets diminished, and Rivian, as a growth stock, was not immune to this broader trend.

April 2024 - Present: Volatile Rebound

After hitting its historical low, Rivian's stock gained upward momentum as the market had largely digested negative factors, and its significantly depressed share price became attractive. During this period, Rivian's stock occasionally rose due to events such as forming a joint venture with Volkswagen, exceeding vehicle delivery forecasts, or posting strong earnings. However, it pulled back when earnings missed expectations or production guidance was lowered.

Notably, Rivian recently announced better-than-expected Q3 2025 earnings, reporting its first-ever quarterly gross profit of $24 million. This boosted its stock price, reaching $17.53 at the close on December 3, marking an increase of approximately32.9% over the past month.

What caused Rivian stock price to plummet by 90%?

Production Profitability Falls Short of High Valuation

Rivian's market capitalization soared to an impressive $150 billion shortly after its November 2021 IPO, reflecting immense market expectations. However, this lofty valuation quickly proved detached from its mass production capabilities and profitability.

On December 16, 2021, just over a month after its listing, Rivian announceda reduction in its 2021 vehicle production target. The stock subsequently plunged as much as 15% in early trading the next day, eventually closing down 10.3% at $97.70, marking a new low since its IPO. Rivian has repeatedly lowered its targets since going public, undoubtedly deepening market skepticism about its actual production capacity.

Furthermore, Rivian has yet to achieve quarterly profitability. From 2021 to 2024, the company reported net losses of $4.69 billion, $6.75 billion, $5.43 billion, and $4.75 billion, respectively, for each fiscal year. Rivian's production profitability has failed to justify the market's high valuation for the stock, leading to significant share price declines, most notably following earnings announcements. On February 21, 2024, Rivian's stock plummeted up to 26% intraday to $11.06 after its Q4 2023 earnings report and 2024 guidance revealed a vehicle production target significantly below market forecasts and a rise in Q4 vehicle gross loss.

Persistent Cash Burn Raises Financial Health Concerns

As a rapidly growing company, Rivian requires substantial capital investment for research, development, and production, making losses a normal occurrence. However, Rivian has not achieved profitability since its IPO, with losses in Q4 2021 and the full year 2022 significantly exceeding other periods.

The sustained losses have become a major red flag for Rivian's stock, likely because the company'senormous expenditures have not translated into efficient capital utilization or expanded production. This has severely eroded investor tolerance for its losses.In Q4 2021, Rivian recorded its largest quarterly loss while failing to meet its annual production target, producing only 1,015 vehicles and delivering 920.

Furthermore, in the current high-interest rate environment, market investment preferences have become more conservative. Investors are seeking more certain returns, thereby intensifying the demand forclear evidence of a company's profitability.Under these conditions, continuous losses exert greater downward pressure on the stock price.

Nevertheless, the latest Q3 2025 earnings report disclosed that Rivian has achieved positive quarterly gross profit for the first time, indicating sales revenue is now sufficient to cover direct production costs. While the net loss for Q3 still amounted to $1.17 billion, this fundamental improvement could provide momentum for a stock rebound.

Market Bearishness on EV Sector

In 2021, amidst an ultra-low interest rate environment, the market was extremely optimistic about high-growth potential sectors like electric vehicles, granting lofty valuations to EV startups such as Rivian and Lucid. However, with the onset of the rate hike cycle in 2022, corporate borrowing costs surged. Growth stocks, which heavily rely on financing and future earnings expectations, were hit first, causing the EV stock valuation bubble to burst rapidly.

In 2023, despite continued growth in EV sales, the pace of expansion slowed significantly. This was partly due to more discerning mainstream consumers facing high EV prices and insufficient public charging infrastructure. Additionally, as pure electric vehicle growth decelerated, demand for hybrid vehicles surged as an interim solution for the transition from internal combustion engines to electric.

In 2024, Chinese EV manufacturers, led by BYD, initiated a price war, competing through substantial price reductions across their product lines and the introduction of lower-cost models. This drastically compressed profit margins across the EV industry, posing an even greater challenge to EV companies' profitability.

As an EV company focused on the premium market, Rivian's flagship R1T pickup and R1S SUV typically start above $70,000 in the U.S. market, lacking a price advantage.While its niche market was not directly impacted by the price war, the widespread reduction in EV prices has raised consumer expectations for EVcost-effectiveness. This demands greatercost controlcapabilities from Rivian and further squeezes its profit margins. Coupled with general market pessimism towards the EV sector, the stock's valuation has sharply declined.

Key Shareholders Signal Exits

Rivian has repeatedly faced sell-offs by its key shareholders.Ford Motor Co., a significant early investor, planned to divest 8 million shares immediately after the lock-up period expired on May 8, 2022, and had cumulatively sold 91 million shares by the end of 2022, reducing its stake to 1.15% by February 2023. Soros Fund also sold approximately 10.8 million shares in Q1 2023.

WhileAmazon, another crucial shareholder, has not announced any share sales, it terminated its exclusive supply agreement with Rivian in November 2023. This move allows Rivian to sell its electric delivery vans to other customers, signaling a shift in their collaborative relationship.

Is Rivian currently facing bankruptcy?

Rivian faces a low short-term bankruptcy risk, bolstered by a significant cash reserve and a strategic investment from Volkswagen, even as the EV maker continues its push towards profitability.

Overall, the short-term bankruptcy risk is low.

$7 Billion Cash Reserves

Although Rivian is currently unprofitable, it holds approximately $7 billion in cash reserves as of Q3 2025. This amount is sufficient to fund several years of operations and capital expenditures without additional financing. However, given Rivian's ongoing losses and depletion of cash, long-term risks persist if profitability is not achieved.

Volkswagen's $5.8 Billion Investment

In 2024, Volkswagen announced a partnership with Rivian to form a joint venture, RV Tech. The plan includes a maximum investment of $5.8 billion into Rivian and the joint venture by 2027. Currently, Volkswagen has completed an initial $2 billion investment.

These funds support Rivian's research and development of electrical architecture and software technology, facilitating the launch of Rivian's R2 model in the first half of 2026, along with the jointly developed ID.1 electric compact car in 2027. Furthermore, given the solid progress in developing these technologies, both companies intend to sell their co-developed EV technology to other automakers in the future.

Volkswagen's investment not only alleviates Rivian's cash flow pressures but also aids in launching its R2 and R3 models, targeting the mass market. This move is crucial for achieving profitability in an era of more affordable electric vehicles.

Profitability on the Horizon

Rivian's Q3 2025 earnings report showed the company achieved positive quarterly gross profit for the first time, signaling improved cost control capabilities. Previously, the company implemented several cost-cutting measures, including pausing construction of a new Georgia factory and relocating R2 model production to its existing Illinois plant.

Furthermore, Rivian's R2, its first lower-priced model slated for a 2026 launch, is poised to be the brand's gateway to the mass market. Starting at just $45,000, the R2 series aims to compete with Tesla's Model Y on both price and features. With lower cost targets and greater production potential, the R2 series is critical for the company to enhance its overall profit margins and achieve sustained profitability.

Is Rivian stock at $17 a worthwhile buy?

Low Price-to-Sales Ratio, Reasonable Valuation

Rivian's current price-to-sales (P/S) ratio stands at approximately 3x, notably lower than Tesla's ~16x and comparable to luxury EV maker Lucid at roughly 4x. Historically, the stock's P/S ratio once exceeded 1,000x post-IPO, driven by extremely high market expectations despite minimal sales. The current valuation reflects a return to rational market sentiment, allowing investors to buy in without the risk premium associated with inflated valuations.

Furthermore, while the market primarily views Rivian as an electric vehicle manufacturer, the company is also investing heavily in autonomous driving technology. It plans to launch a true self-driving system by 2026. Should Rivian successfully develop and deploy this technology as scheduled, its valuation paradigm could fundamentally shift. The market might then re-rate it as a high-tech software firm, or even link it to artificial intelligence (AI), leading to a significant upside in its valuation.

In short, buying Rivian shares now represents a highly attractive proposition.

Improving Fundamentals Set the Stage for a Potential Stock Rebound

Rivian reported its first-ever positive quarterly gross profit in its Q3 2025 earnings, marking a significant profitability milestone for the company. Sustained increases in gross margin, or even the achievement of quarterly net profitability, would serve as major catalysts for a stock rebound. Additionally, investors should closely monitor the production progress and delivery schedules of Rivian's upcoming R2 and R3 models. Should these initiatives meet or exceed expectations, market confidence in the company will be further bolstered.

Summarize

Electric vehicle maker Rivian's valuation has normalized after its initial post-IPO bubble burst. For those bullish on the future of electric vehicles, this attractively valued growth stock may now warrant consideration.

However, it's crucial to note that Rivian remains unprofitable. Furthermore, the development of its autonomous driving technology and the launch of its R2 and R3 models face uncertainty. Therefore, investing in this stock represents a high-growth, high-risk bet.

FAQ

1. What is the price target for RIVN?

According to TradingKey's stock rating system, 30 analysts have set an average price target of $14.928.

2. What are the current support and resistance levels for RIVN?

The stock is in an uptrend, having broken past multiple technical resistance levels. However, given its significant recent gains (up over 30% this month), there is a risk of a technical pullback in the short term. Key resistance levels are between $17.80 and $18.13, with the 52-week high at $18.13. Major support levels range from $16.41 to $16.53.