The shares of Rivian have experienced a rollercoaster ride this year. After suffering significant losses at the beginning of the year, the stock was able to recover following a joint venture and capital investments from Volkswagen. Nevertheless, the price has fallen by 24.22 percent over the last three months. According to Emmanuel Rosner from Wolfe Research, the stock price is now in a reasonable range due to short-term fundamental factors. However, the analyst also warns of execution risks and further challenges.

Rosner emphasizes that Rivian has long-term potential despite current challenges. This is mainly due to its strong positioning as a premium brand that resonates positively with consumers, the growing end-customer business, and its technological expertise, particularly in the areas of software and hardware.

At the same time, Rosner considers the valuation of the stock to be problematic. Even in optimistic scenarios where Rivian delivers around 200,000 vehicles annually by 2028, he expects a profit per share of only $0.30 to $0.35. Given the current loss of $2.79 billion in the last fiscal year, the path to stable profitability still seems far off.

Rosner believes that Rivian could achieve a positive EBITDA (earnings before interest, taxes, depreciation, and amortization) by the end of 2027 if significant improvements are made. These improvements include an increase in production capacity, higher average selling prices, and regulatory credits. However, achieving positive free cash flow will take even longer. In this context, Rosner draws comparisons to Tesla, which only achieved sustainable cash generation after many years of development and efficiency improvements.

Despite the uncertainties, Rosner rates Rivian stock as neutral and does not provide a specific price target at this time. On Thursday, the shares closed with an increase of 1.27 percent at $11.17.