If You’d Invested $500 in Rivian Stock 3 Years Ago, Here’s How Much You’d Have Today

If You’d Invested $500 in Rivian Stock 3 Years Ago, Here’s How Much You’d Have Today


Rivian (NASDAQ: RIVN) inventory went public in 2021 to nice fanfare. On the time, shares traded at a price-to-sales ratio of 60. That sort of valuation is usually reserved just for hypergrowth firms.

In the event you had put $500 into Rivian inventory the day it went public, how a lot would you might have proper now? The reply would possibly shock you.

A $500 funding in Rivian would now be value this a lot

Investing in development shares will be tough. Rivian is an ideal case examine. When the corporate went public almost three years in the past, it was producing annual gross sales of round $500 million. During the last 12 months, nevertheless, complete gross sales had been round $5 billion.

In three quick years, the corporate has managed to spice up gross sales by almost 1,000%. However what has the inventory carried out? Over that very same time interval, Rivian shares have misplaced almost 90% of their worth. A $500 funding in 2021 can be value simply $51 right this moment. Ouch!

What’s the principle takeaway right here? It is that an organization will be rising quickly and nonetheless not make for an excellent funding. That is as a result of the corporate’s long-term funding worth is a direct operate of its cumulative (eventual) returns, and that ought to decide the worth you pay. Traders in 2021 merely paid an excessive amount of for Rivian inventory. Its income development through the years has been spectacular, however the market had initially priced in much more development. The corporate had too excessive of expectations from the market baked into its inventory value.

Is Rivian inventory a purchase right this moment? There are several reasons to be optimistic, particularly now that the valuation has come all the way down to an inexpensive 2 instances gross sales. However let Rivian’s historical past be a lesson to us all that inventory value actions do not all the time monitor an organization’s development trajectory.

Must you make investments $1,000 in Rivian Automotive proper now?

Before you purchase inventory in Rivian Automotive, contemplate this:

The Motley Idiot Inventory Advisor analyst workforce simply recognized what they imagine are the 10 best stocks for traders to purchase now… and Rivian Automotive wasn’t considered one of them. The ten shares that made the reduce may produce monster returns within the coming years.

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Ryan Vanzo has no place in any of the shares talked about. The Motley Idiot has no place in any of the shares talked about. The Motley Idiot has a disclosure policy.

If You’d Invested $500 in Rivian Stock 3 Years Ago, Here’s How Much You’d Have Today was initially printed by The Motley Idiot



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