In the days following its initial public offering (IPO) in November, shares of Rivian (RIVN -2.27%) rocketed 130% from its IPO price of $78. Investors were excited about the EV start-up's impressive designs for its battery-powered pickup trucks, sport utility vehicles, and commercial vans.
Having the backing of Amazon.com (AMZN -2.56%) certainly didn't hurt either. The e-commerce titan owns a roughly 20% stake in Rivian and has already placed an order for 100,000 of its vehicles.
Since its post-IPO surge, however, Rivian's stock price has plunged. Earlier this month, Amazon struck a deal with Stellantis (STLA 0.08%) to be the auto giant's first commercial customer for its new Ram ProMaster electric vehicle, which is slated to launch in 2023. The news made investors realize that Amazon is likely to order EVs from multiple manufacturers as it seeks to build out its massive delivery fleet.
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Some analysts say Rivian's downturn is a buying opportunity. For one, Redburn analyst Charles Coldicott believes the stock, which currently trades near $71 per share, will nearly double to $141.
Coldicott highlighted Rivian's tremendous growth potential. He expects demand for its EVs to outpace production, even as the automaker invests aggressively to expand its manufacturing capabilities. Essentially, Coldicott is saying Rivian will be able to sell as many vehicles as it can build in the coming years.
That's a strong position to be in for an upstart automaker, and it makes Coldicott's bullish view understandable. It could also make Rivian's stock a buy today for long-term investors who can endure short-term volatility and remain patient as the EV company scales its production network.
