Rivian Is Worth $23 Billion With the R2 Just Ramping. Where Will the Stock Be in 3 Years?

As of this writing, Rivian (NASDAQ: RIVN) stock sits at about $16, giving the company a market value of about $23 billion. For that price, investors get an electric vehicle maker that will deliver perhaps 70,000 vehicles this year, still loses money on them at the gross level, and just started shipping the product its whole investment case rests on.

That last part is why the next three years matter so much. The R2, a smaller and more affordable SUV than Rivian's first models, began reaching customers on June 9. Whether the stock is higher or lower in 2029 comes down to how many R2s the company builds -- and what each one earns.

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Rivian's second-quarter report, released July 30, showed a company heading into the ramp with momentum. Revenue rose 27% year over year to $1.66 billion, and deliveries climbed 14% to 12,194 vehicles, well above the 9,000 to 11,000 management had forecast. That outperformance led the company to raise its full-year delivery outlook to 65,000 to 70,000 vehicles, from 62,000 to 67,000.

The profit picture is improving, too, though from a low base. Consolidated gross profit came in at $179 million in the second quarter, an 11% margin.

However, the automotive segment itself ran a $36 million gross loss. That's a dramatic improvement from the $335 million automotive gross loss of a year earlier -- helped in part by regulatory credit revenue -- and management said the quarter absorbed approximately $100 million of incremental costs from ramping R2 production. Strip those out, and the vehicle business would have been modestly profitable at the gross level.

What actually carried the quarter was software and services . The segment generated $515 million in revenue, up 37% year over year, with $215 million of gross profit, a 42% margin.

The commercial side keeps scaling, too. Amazon now has more than 40,000 Rivian electric delivery vans on the road.