My team and I are dedicated to the renewable energy mega trend.
We see a ton of growth potential in stocks related to battery storage, electric vehicles (EVs) and green technology.
With our Stock Power Ratings system, we can see the stocks in these trends that are poised for massive breakouts.
And some that are floundering.
This is the case for Rivian Automotive Inc. (Nasdaq: RIVN).
A quick look at our system helps you see the real picture of a company.
Rivian launched its initial public offering in 2021, billing itself as a premier developer of off-road electric vehicles.
The company has launched two EV models: a truck (the R1T) and an SUV (the R1S).
RIVN has increased its sales, but it’s far from generating any profits.
And that’s part of the reason it is one of the worst-rated companies within Stock Power Ratings.
RIVN stock scores a “High-Risk” 0 out of 100 on our system, and we expect it to underperform the broader market over the next 12 months.
RIVN Stock: Weak Fundamentals + Extreme Volatility
I love to dive deep into a company and find data points that suggest strong performance.
That isn’t the case for RIVN:
- It just announced a massive recall for most of the vehicles it has produced. That has some analysts worried it won’t hit future production targets.
- Its loss from operations was $1.7 billion in the second quarter.
That shows why RIVN scores a 7 on growth.
It also scores in the red on our other five metrics.
RIVN has a negative price-to-earnings ratio, and its price-to-sales is more than 20 times higher than the industry average, meaning it’s stock is overvalued after investors have driven the price up. This earns it a 23 on value.
The company has a terrible return on equity of negative 96.6%.
Its return on investment is awful as well, at negative 57.8%, earning it an 8 on quality.
This all tells us that people are paying way too much for the stock.
Its growth potential right now is nonexistent.
The company isn’t making money off what it produces.
RIVN stock had a rough 12 months, falling almost 65% as I write.
Some of its competitors in the EV space have fared better, but are still down. Tesla Inc. (Nasdaq: TSLA) is down more than 32%, while Lucid Group Inc. (Nasdaq: LCID) is down 45%.
Rivian stock scores an atrocious 0 overall on our proprietary Stock Power Ratings system.
That means we consider it “High-Risk” and expect it to underperform the broader market.
It’s not that RIVN doesn’t have potential in the EV market.
But our Stock Power Ratings system shows us that now isn’t the time to add Rivian to your stock portfolio.
Note: I mentioned we are bullish on the EV mega trend here at Money & Markets — but we have a different way to play it.
If you want to gain access to my colleague Adam O’Dell’s high-conviction lithium stock recommendation, click here for details on how to join Green Zone Fortunes.
For $4 per month, you’ll have access to Adam’s highest-conviction renewable energy stock plays, along with guidance on exactly when to buy and sell. Some of these stocks are up more than 70% since March, and Adam believes they are just getting started.
So click here and watch his “Infinite Energy” presentation and get ready to ride the renewable energy mega trend to future gains as the Inflation Reduction Act pumps new money into these industries.
Matt Clark, CMSA®
Research Analyst, Money & Markets
P.S. I’d love to hear what you thought about my “Stock to Avoid” article today. Was it valuable? Would you like us to continue sharing “High-Risk” stocks on occasion, so you know what to stay away from?
Would you prefer that we only share “Bullish” and “Strong Bullish” stocks?