Rivian Automotive (RIVN) Following Volkswagen Software Questions Is The Stock Still Undervalued

Rivian Automotive (RIVN) is back under pressure after reports that Volkswagen may rely on Xpeng software for many European EVs, raising questions about how central Rivian’s software remains within that partnership.

For context, Rivian Automotive shares have come under sustained pressure, with the 30-day share price return down 26.12% and the year-to-date share price return down 41.11%, while the 1-year total shareholder return is down a comparatively smaller 14.77%.

Screen for other EV and software players under similar pressure and compare them with Rivian Automotive using our hand picked 29 high quality undervalued stocks list.

Rivian Automotive is building out serious products and software, yet the share price slide and questions around the Volkswagen tie up put a simple issue in front of you: Is this business strength already more than reflected in today’s valuation?

Most Popular Narrative: 40% Undervalued

Against a last close of $11.43, the most followed Rivian Automotive narrative pins fair value at $19. This frames the recent selloff as a steep discount that hinges on software, partnerships and the R2 rollout actually translating into durable cash flows.

The Uber partnership, which includes up to US$1.25b of equity funding tied to technical and deployment milestones and an initial commitment for 10,000 autonomous capable R2 vehicles plus an option for 40,000 more, offers a potential future stream of vehicle sales and per mile software licensing income that would contribute directly to revenue and recurring earnings.

See why 258 investors see Rivian Automotive as 40% undervalued.

Result: Fair Value of $19 (UNDERVALUED)

Still, if R2 ramp issues or higher than planned cash burn slow Rivian Automotive’s shift toward better margins, this 40% discount case could unwind quickly.

Find out about the key risks to this Rivian Automotive narrative.

Another View On Rivian Automotive’s Valuation

The SWS DCF model paints a very different picture for Rivian Automotive. On this view, the stock at $11.43 trades well below an estimated future cash flow value of $47.72, which screens as deeply undervalued. If that gap ever narrows, current pricing could look very different to today.

Curious how that kind of gap can exist when the stock is still loss making and volatile, and what assumptions need to hold for it to close in your favor, Look into how the SWS DCF model arrives at its fair value.

Next Steps

Mixed messages on Rivian Automotive can feel paralyzing, yet the real edge comes from reviewing both the upside and the red flags yourself. To weigh those signals side by side and decide where you land, take a look at 3 key rewards and 2 important warning signs

Looking For More Investment Ideas Beyond Rivian Automotive?

If Rivian Automotive has sharpened your thinking, do not stop here. Broaden your watchlist with other potential opportunities that match your risk, return and income goals.

• Target potential value rebounds by scanning stocks screened as beaten down yet financially strong through the 29 high quality undervalued stocks.
• Strengthen your income stream by focusing on companies filtered for higher yields and durability in the 5 dividend fortresses.
• Dial back risk while staying invested by zeroing in on resilient businesses with healthy finances using the 30 resilient stocks with low risk scores.

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