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Rivian expands into fleet business beyond its ‘exclusive’ Amazon deal
Electric vehicle startup Rivian is expanding a fleet business that appeared to be exclusively tied to Amazon.
The company, in which Amazon holds a 20% stake, will start taking orders for its electric delivery vans in 2022, with plans to deliver them to customers by early 2023, according to a new section of Rivian’s website.
Rivian has been working to fulfill a contract to produce 100,000 electric vehicle delivery vans for Amazon through 2024. (Rivian has said it plans to deliver the first 10 of Amazon’s order by the end of this year.) That deal appeared exclusive, according to information contained in the S-1 document announcing its plans to go public. However, this new information that shows Rivian is selling to other fleet customers prior to 2024 suggests that its contract with Amazon has some wiggle room.
Neither Amazon nor Rivian could be reached to clarify the terms of the exclusivity.
The new section of the site, which went live Friday and was tweeted out by a few Rivian employees, says customers will be able to use Rivian’s online fleet configurator to plan and place fleet orders beginning early next year. Deliveries wouldn’t begin until the following year.
The company said it will also sell fleet amazon stock projections of its R1T electric pickup and R1S electric SUV, which widens the customer base beyond the consumer adventurer that Rivian has been targeting. This move potentially puts Rivian in more direct competition with a variant of Ford’s all-electric pickup truck, which is being directly marketed to commercial customers.
The updated website outlines several other products related to the fleet business, including a management platform called FleetOS and charging infrastructure.
Rivian, and Amazon, stand to gain from casting a wider commercial net.
“The success of our business depends on attracting and retaining a large number of customers,” reads Rivian’s S-1 filing. “If we are unable to do so, we will not be able to achieve profitability.”
However, there are risks and unknowns to how many other customers Rivian, which is just starting production of its R1T, can even take on.
Rivian’s factory in Normal, Illinois has current capacity to produce up to 150,000 vehicles annually — about 65,000 of which would be for the R1 pickup and SUV and 85,000 for the commercial delivery vans called RCV.
That doesn’t mean Rivian will hit that capacity overnight. Rivian has said in an amendment to its S-1 that based on its current production forecast, it expects to fill a preorder backlog of about 55,400 R1 vehicles by the end of 2023.
Rivian’s push into the fleet business comes just days before it makes its debut as a publicly traded company. Rivian’s valuation at IPO is expected to be as high as $65 billion, but some investors have had their doubts. A report from New Constructs, an investment research software company, released just a few days before Rivian updated its website, finds that Rivian’s stock is overvalued and urges investors not to buy when the company goes public this week.
“Rivian has yet to manufacture a meaningful number of vehicles and competes with well-capitalized electric vehicle upstarts as well as incumbents like General Motors (GM) and BMW, which both have decades of experience and multi-billion dollar plans to expand EV production,” the report reads.
Despite this, many investors are bullish on the startup and its future. This latest update could sway previously skeptical investors that Rivian has more flexibility and power than previously thought.
|Number of Analysts||50|
|Last Close Price||3 389,79 $|
|Average target price||4 127,73 $|
|Spread / Average Target||21,8%|
|High Price Target||5 000,00 $ amazon stock projections|
|Spread / Highest target||47,5%|
|Low Price Target||3 775,00 $|
|Spread / Lowest Target||11,4%|
Consensus revision (last 18 months)
Amazon stock price prediction in 5 years
Amazon is a US technology giant that’s established itself as a leading name in e-commerce, cloud computing and digital streaming.
The company began by selling books before expanding into everything from electronics and video games to clothing, furniture and jewellery.
It also provides downloadable and streaming content through Best high yield savings rates Prime Video and Amazon Music, as well as being involved in publishing, film production and cloud computing.
Amazon’s success in so many different areas has made it the fifth largest company in the world, with a $1.7tn market capitalisation, according to CompaniesMarketCap, as of 29 November 2021.
The AMZN stock price has risen sharply over the last decade. The company continues to invest in a bid to improve its long-term prospects.
But what does the future hold? Here we take a look at the recent stock performance, assess its latest results and ask analysts for their predictions.
Amazon stock analysis: How has it performed?
The company’s stock price has enjoyed phenomenal growth of 1,791%, rising from $185.27 to $3,504.56 over the ten years to 26 November 2021.
Over the past five years, the stock has risen 373%. Over the past year, the stock has seen a 10% increase from $3,195.34 in late November 2020.
Year-to-date, the stock has gone up 10% from $3,186.63 back in January, even though it dipped slightly in October when third quarter results came in lower than had been expected.
The company has never declared nor paid cash dividends on its common stock.
AMZN stock analysis: The company’s third quarter results
Amazon achieved net sales of $110.8bn in the three months to the end of September 2021 – 15% up on amazon stock projections $96.1bn recorded in the corresponding period last year.
Net sales in North America hit $65.5bn – 10.4% up on the $59.37bn in the third quarter last year, while international sales rose 16% year-on-year to $29.14bn.
However, the company’s statement also revealed that overall operating income decreased to $4.9bn in the third quarter this year, compared with $6.2bn in the third quarter of 2020.
The net income figure, meanwhile, shrunk to $3.15bn during the period, representing a 50% drop on the $6.3bn made in the three months to the end of September 2020.
This substantial decline was down to a combination of factors, including increased expenses and investments made in the business.
Amazon outlook and projections: Growing pains of the business
Having delivered strong revenue growth throughout the pandemic, the last 18 months finally caught up with it, according to Nicholas Hyett, equity analyst at Hargreaves Lansdown.
“Rising operating costs outpaced revenue in the third quarter in most areas, reflecting increased investment in fulfilment capacity, higher wages and some effects from supply chain disruption,” he said. “Some of that cost may be temporary, but a lot will linger.”
Andy Jassy, who took over as Amazon’s chief executive in July 2021, pointed out that investments had been made to satisfy customer needs, including almost doubling the size of its fulfilment network since the pandemic began.
“We’ve always said that when confronted with the choice amazon stock projections optimizing for short-term profits versus what’s best for customers over the long term, we will choose the latter — and you can see that during every phase of this pandemic,” he said in the third-quarter results statement.
Jassy also warned this trend was likely to continue and pointed out that while “it’ll be expensive for us in the short term”, it was the right decision for customers and partners.
“In the fourth quarter, we expect to incur several billion dollars of additional costs in our consumer business as we manage through labour supply shortages, increased wage costs, global supply chain issues, and increased freight and shipping costs — all while doing whatever it takes to minimise the impact on customers and selling partners this holiday season,” he said.
Amazon stock 5-year forecast: Where could the stock go?
So, what is Amazon’s long-term stock forecast? AMZN stock is rated as ‘buy’ by all 38 analysts highlighted by MarketBeat. This list includes Barclays, BMO Capital Markets, JP Morgan, Citigroup and the Royal Bank of Canada.
Their consensus 12-month price target for the share price is $4,179.47, which would represent a 19.2% upside over the current $3,504.56 level, as of 29 November 2021.
The highest forecast was $5,000, which would be 42% higher than today, while the lowest was an 8% rise to $3,800 by next November.
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However, according to the algorithmic forecasting of Wallet Investor (as of 29 November), Amazon could actually increase 25% over the coming year to $4,370.34.
The site, which classes AMZN stock as a “good long-term (one year) investment”, predicts it could reach $5,086.23 by November 2023 and hit $5,788.61 a year later.
Although the algorithm-based forecasting service does not provide targets for Amazon stock price in 10 years, it suggests the stock could be at $6,490.81 by November 2025. And, according to its Amazon stock forecast in 5 years to 2026, the stock could hit $7,177.35, an increase of 105% over its current level.
Amazon stock long-term forecast: what do the analysts say?
According to Russ Mould, investment director at AJ Bell, Amazon’s status as a leader in fields such as retail, cloud computing and entertainment is why it commands such a high valuation.
“It will be difficult for competitors to dislodge the company from its leading positions and regulators do not seem particularly inclined to do so (yet), while Amazon is clearly keen to use its financial muscle to penetrate, disrupt and master new areas, too,” he told Capital.com.
However, the company does face its challenges. “Politicians and regulators continue to debate and implement digital sales taxes, or new tax regimes which target multinationals such as Amazon, while the authorities continue to scrutinise the firm’s use of customer data,” he explained.
He also believes higher wage costs are a potential threat, along with competitors in each of its chosen areas who aren’t going away – these include Walmart in retail, Alphabet and Microsoft in cloud computing, and Amazon stock projections and Disney in entertainment.
In a recent broker note, Doug Anmuth, an analyst at JP Morgan, suggested that Amazon was well-positioned going into the holiday season.
“Amazon maintains 40% share of US e-commerce and we believe Amazon should surpass WMT (Walmart) as the largest US retailer in 2022,” he wrote.
He also said key drivers included AMZN having doubled its fulfilment network since the pandemic began, while the early timing of holiday promotions indicates a strong inventory position.
However, Anmuth believes the company still has further room for expansion.
“Since launching with books in 1995, Amazon has expanded into virtually all retail categories,” he pointed out. “While we estimate Amazon has a 40% market share of overall US e-commerce spend, its penetration by category varies widely.”
Anmuth believes the company is most underpenetrated in jewellery & watches, as well as flowers/greetings. “We believe Amazon’s biggest growth opportunities are in Consumer Packaged Goods (incl. Grocery), Apparel & Accessories, and Furniture/Appliances/Equipment,” he added.
When looking for Amazon 5-year stock predictions, it’s important to bear in mind that analysts’ forecasts can be wrong. Analysts’ projections are based on making a fundamental and technical study of the stock’s performance. Past performance is no guarantee of future results.
It is important to do your own research and always remember your decision to trade depends on your attitude to risk, your expertise in the market, the spread of your investment portfolio and how comfortable you feel about losing money. You should never invest money that you cannot afford to lose.
Amazon stock history: Detailed information
Jeff Bezos, the company’s founder, opened the virtual doors of Amazon’s online store in July 1995, with the company going public just under two years later amazon stock projections 15 May 1997.
The initial public offering price was $18 – or $1.50 when adjusted for the stock splits that occurred in 1998 and 1999. Amazon stock is traded on the Nasdaq. The company’s fiscal year runs until 31 December.
In his most recent letter to shareholders, Bezos said the company had come a long way and now employed 1.3 million people around the world.
It also has more than 200 million Prime members, while more than 1.9 million small and medium-sized businesses sell via the site, making up almost 60% of its retail sales.
“Customers have connected more than 100 million smart home devices to Alexa,” he added.
AMZN stock splits
On 21 July 1999, Amazon announced a 2-for-1 split of common shares, effective on 1 September 1999, for stockholders of record on 12 August 1999.
On 19 November 1998, Amazon announced a 3-for-1 split of common shares, effective on 5 January 1999, for stockholders of record on 18 December 1998.
On 27 April 1998, Amazon announced a 2-for-1 split of common shares, effective on 2 June 1998, for stockholders of record on 20 May 1998.
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