RIVN

We rate Rivian Automotive, Inc. / DE (RIVN) as a Reduce with a composite score of 40.0/100 at a current price of $15.20. The quantitative profile shows weakness across multiple dimensions, suggesting limited upside potential and elevated risk of underperformance relative to peers over the next 12 months.

The rating is primarily driven by strength in momentum (52th percentile) and stability (46th percentile), which together account for the majority of the composite score. Offsetting weakness in investment (23th percentile) and quality (31th percentile) tempers our overall conviction. We assign a No Moat rating (25/100), Very High uncertainty, and Poor capital allocation.

Key items to watch: balance sheet deleveraging progress; sustainability of the current growth rate; the path to profitability. Any material change in these dynamics could warrant a reassessment of our rating. The moat trend is stable, which suggests the competitive landscape is stable for now.

Rivian Automotive, Inc. / DE holds a top-quartile position (#0 of 50) within the Manufacturing sector, based on our composite quantitative scoring across quality, value, momentum, and stability factors. The composite score of 40.0/100 places it at rank #3537 in our full 7,333-stock universe. With a $17.8B market capitalization, Rivian Automotive, Inc. / DE operates at meaningful scale within the Manufacturing sector, providing competitive advantages in distribution, procurement, and customer reach.

Revenue is growing at 35%, though momentum at the 52th percentile suggests the market has not yet fully recognized this trajectory. This potential disconnect between fundamental improvement and market recognition could represent an opportunity for patient investors if the growth trend persists.

The margin cascade tells an important story: gross margins of -11% (-53.1pp vs sector) narrow to operating margins of -84% (-85.1pp vs sector) and net margins of -82.5%, yielding a gross-to-net conversion rate of N/A%. The significant margin erosion from gross to net suggests elevated operating expenses, high interest costs, or other structural drags that warrant monitoring.

At a current price of $15.20, Rivian Automotive, Inc. / DE is trading near fair value based on current fundamentals. Our value factor score of 45/100 reflects a composite assessment across multiple valuation metrics including price-to-earnings, price-to-book, EV/EBITDA, and price-to-sales ratios relative to both sector peers and the broader market. Valuation metrics are mixed, with no strong signal of mispricing in either direction.

The stock currently trades at P/B of 4.1x, P/S of 3.8x. We evaluate these multiples in the context of both absolute levels and sector-relative positioning to form our valuation view.

We assign a Very High uncertainty rating to Rivian Automotive, Inc. / DE. The stock exhibits multiple compounding risk factors: significant leverage (224% debt-to-equity), current negative profitability (net margin -82.5%), weak quality scores (31th percentile). The extreme uncertainty around future cash flows makes precise valuation difficult, and the range of outcomes is exceptionally wide. Only investors with high risk tolerance and extended time horizons should consider this name.

Specific risk factors that inform our assessment include: significant leverage (224% debt-to-equity); current negative profitability (net margin -82.5%); weak quality scores (31th percentile); the combination of leverage (224% D/E) and thin margins (-82.5% net) amplifies downside risk. Each of these factors independently widens the distribution of potential outcomes, and in combination they create a risk profile that demands careful position sizing. The stability factor at the 46th percentile and quality factor at the 31th percentile provide a quantitative summary of the overall risk landscape.

We identify limited risk mitigants at this time, which contributes to our very high uncertainty assessment. Investors should monitor for improvement in balance sheet metrics, margin stability, and business predictability that could warrant a downgrade in our risk assessment over time.

We rate Rivian Automotive, Inc. / DE's capital allocation as Poor. Key concerns include low returns on equity (-85.4%), elevated leverage (224% D/E), negative profitability, weak asset returns (ROA -26.4%). Exemplary capital allocators generate ROE above 20% and maintain conservative leverage — Rivian Automotive, Inc. / DE significantly underperforms these benchmarks, raising questions about management's ability to create shareholder value.

Investors should scrutinize management's reinvestment decisions and balance sheet trajectory before committing capital. Poor capital allocation often compounds over time: overlevered balance sheets limit strategic flexibility, while low returns on capital destroy shareholder value. We would need to see sustained improvement in profitability metrics and balance sheet discipline before considering an upgrade.

In summary, Rivian Automotive, Inc. / DE receives a Reduce rating with a composite score of 40.0/100 (rank #3537 of 7,333). Our quantitative framework assigns a No Moat (25/100, trend: stable), Very High uncertainty, and Poor capital allocation. The average factor score across quality, value, momentum, stability, and investment is 39/100.

Our analysis does not support a constructive view on Rivian Automotive, Inc. / DE at this time. The combination of limited competitive advantages, very high uncertainty, and poor capital allocation suggests unfavorable risk-reward at current levels. We recommend investors avoid new positions and existing holders consider reducing exposure.