Rivian Stock Has Been on Fire. Is It Too Late to Buy?

The shares have been on a roll, and today’s news is keeping it going.

The stock of Rivian Automotive (RIVN 9.81%) is jumping again on Monday. Shares of the electric vehicle (EV) maker popped as much as 12% in early trading today to start the week. That jump kept the momentum going for Rivian shares.

The stock has soared by more than 30% since mid-April. That move came after the company introduced its next-generation lineup of midsize electric SUVs in March and after a large funding grant from the State of Illinois Department of Commerce and Economic Opportunity. That grant will help Rivian save more than $2.25 billion in capital spending as it expands its Illinois factory to begin building the R2 vehicle platform it announced.

But another tailwind has investors pushing the stock higher today, too.

Looking at the EV landscape

Today’s pop came after reports that the Biden administration plans to announce major new tariffs on EVs and other selected goods imported from China. The announcement could come as soon as tomorrow. Reports say the EV tariffs could quadruple from the existing 25% to 100%.

That has investors boosting stocks of many U.S.-based EV makers today. But Rivian shares were already on a monthlong surge. That might have investors wondering if it’s too late to buy the stock. But for those who think the company can execute on its plans, the stock could still be a good buy now.

Shares aren’t overly expensive based on a price-to-sales (P/S) valuation. With a market cap of about $11 billion, Rivian’s P/S is slightly over 2. But there remains plenty of risk with the company bleeding cash as it works to launch the R2 vehicles.

If the tariffs reportedly coming are implemented, it would help alleviate potential competition for Rivian’s SUV lineup. The company also has a base load of orders for electric delivery vans from Amazon. Those are both tailwinds for a company that could thrive if it makes it over the hurdle to successfully launch its future vehicles.

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Howard Smith has positions in Amazon and Rivian Automotive. The Motley Fool has positions in and recommends Amazon. The Motley Fool has a disclosure policy.

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