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The Rivian Market Is Poised to Accelerate

Key Points
Rivian had a solid quarter supported by increasing production. 
Production and deliveries exceeded expectations and led the company to raise guidance. 
The stock is showing signs of a classic turnaround that could take the market to new highs. 
5 stocks we like better than Rivian Automotive
The Rivian NASDAQ: RIVN market hit a low point and started moving in the opposite direction earlier this year. With production ramps progressing well and better-than-expected Q2 results, the market for this stock is about to gain momentum. The recent decrease in the price action confirms support at a crucial level and indicates that the upward trend will continue.
The analysts have been hesitant to update their price targets; only 1 revised target is shown on financehubusa’s analyst tracking page. However, this target is increased and tied to a Buy rating, and overall sentiment is positive. 
Among the key points from the analyst discussions is that cash burn is being brought under control. This has led to a narrower loss with the help of leverage. Leverage is being utilized due to production ramps, supply chain normalization, and cost reductions, all of which are expected to lead to further improvements throughout the year. Wedbush’s Dan Ives, who stated that the company was at a turning point after the Q1 release, described the Q2 results as a “step in the right direction.”
Other analysts view the new production targets, which are 400 basis points higher compared to Q1 guidance, as achievable and possibly even conservative. 
Regardless, the community of 16 analysts tracked by financehubusa has given the stock a weak Moderate Buy rating, with a price target approximately 13% higher than the pre-release action. The most recent target, released after the earnings report, is 700 basis points higher than that, providing further evidence that analysts’ sentiment has turned and is now supporting the market.
The consensus estimate has declined by about 50% compared to last year, but it has improved compared to last quarter and last month, indicating that analysts’ sentiment is getting more positive. 
Rivian Has Solid Quarter As Production Ramp Gains Momentum 
Rivian had a strong Q2 with revenue of $1.12 billion, a growth of 207.7% compared to last year, surpassing the consensus by 1100 basis points. The strength was driven by an increase in production and deliveries, with production up 50% YoY and 12,640 vehicles delivered. The improvement is largely attributed to the higher production of motors, which allowed for complete coverage of the R1 fleet and the introduction of a dual-motor option. 
Another positive development is the improvement in margin at all levels. The company’s vehicle margin showed significant improvement due to the leverage gained from higher volume, and it is on track to exceed the consensus targets for the year.
Although the company is still operating at a loss, total losses decreased by 30% and are expected to decrease further as production ramps up and SG&A expenses are managed. The adjusted losses of $1.08 per share are $0.31 better than expected, and the guidance indicates that these strengths will continue and even improve in Q3 and Q4, with production targets increased to 52,000 from the previous 50,000.

Upon reviewing the balance sheet, it can be seen that the company has over $10 billion in cash and equivalents and $11.3 billion in total liquidity, providing enough resources for the next few quarters at least. 
The Technical Outlook: A Textbook Reversal For Rivian
The Rivian market is displaying a classic bottom and reversal pattern. The market reached its lowest point earlier this year, broke through a significant resistance level over the summer, and confirmed support and the upward trend following the Q2 earnings release. If the market follows this signal, the stock should continue to rise. The next solid resistance level is around $27.50, and a break above that would be considered bullish. 
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