Rivian has huge potential upside despite the stock's recent plunge: Analyst

Yahoo Finance's Brian Sozzi discusses Rivian and where analysts see the stock going from here.

Video transcript

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JULIE HYMAN: Well, there have definitely been some speed bumps for electric vehicle shares. I got to come up with a better word play than speed bumps.

BRIAN SOZZI: I like it.

JULIE HYMAN: Maybe Brian Sozzi can help me out. But there is one closely-watched autos analyst who's coming out and saying that one stock within that space can rev higher this year.

BRIAN SOZZI: Wow.

JULIE HYMAN: What have we got, Brian Sozzi?

BRIAN SOZZI: Well, I have one for you too, here, Julie. Let's just keep this train going. Shares of Rivian have been run over since the IPO.

JULIE HYMAN: [GROANS]

BRIAN SOZZI: The stock was about $172 at its high right after the late 2021 IPO. It is now $50.62 and plunging again here today on the morning.

And I'm still dissecting an interesting note from auto analyst Adam Jonas over at Morgan Stanley, one of probably the best auto analysts out there on the street. He is coming out here reiterating an upbeat call on Rivian and looking for an at least, get this, 160% share price surge just based on his price target of $147.

Now, he acknowledges that investor confidence has been shaken in Rivian really following the company. A couple of stumbles earlier a couple of weeks ago, where they actually missed their production totals or production outlook or results from last year. So they missed that. Also Amazon signed a deal with Stellantis to get some of its new electric vehicles. So the market did not like that.

But where Jonas comes in here is that he still views Rivian as having cutting edge technology and further along in the industrial journey compared to when Tesla was it's age. So very interesting call here by Jonas.

But overall, my take is this. Three things here that I think investors should take away after looking at a call like this-- one, Rivian is going to lose a hell of a lot of money this year, people. Close to $5 billion on a net basis here. That would be up, up from a loss of about, I believe, over $4 billion last year. The company will report in a few weeks, but that's where the street is at.

Number two, if the company comes out here and continues to miss its production guidance here, as it did last year, that is going to be red meat for the bears. And then last but not least, did you see what Ford CEO Jim Farley told us here at Yahoo Finance this week? They have 200,000 reservations for their first all-electric pickup truck, the F-150 Lightning . That is a big number. And if Rivian would have had its act together perhaps some of those reservations could have gone to Rivian, but that is not the case.

JULIE HYMAN: You know, Sozzi, if this was this time last year, that point number one, I would say, who cares? $5 billion lost here. $5 billion lost there.

BRIAN SOZZI: Doesn't matter. [CHUCKLES]

JULIE HYMAN: But the market environment has changed. People seem to-- traders do seem to care more about profitability right now in what is a little bit tougher market environment. So that is definitely something that we should keep a watch on.