Rivian Automotive (RIVN): 3.11% Gain in a Week—Key Insights - NEW BOX OFFICE TO DAY

Momentum trading revolves around the concept of tracking a stock’s latest movement, whether upward or downward. When adopting a 'long' approach, traders aim at purchasing stocks at elevated prices with an expectation to offload them at yet higher values. For those who adhere to this strategy, capitalizing on ongoing shifts in a stock's value is crucial; after a stock sets its trajectory, it usually persists along that route. The objective here is to ensure that as soon as a stock follows through with a determined pattern, it facilitates advantageous transactions timed perfectly for profit.

Although numerous investors seek signs of momentum in equities, quantifying this concept proves quite challenging. A significant amount of discussion centers around identifying the most effective metrics to concentrate on and distinguishing those that serve as unreliable predictors of upcoming returns. To tackle this challenge, we have the Zacks Momentum Style Score, an integral component of the broader Zacks Style Scores system.

Here, we examine Rivian Automotive (RIVN) , which presently boasts a Momentum Style Score of A. In our discussion, we delve into the primary factors influencing the Momentum Style Score, such as price changes and adjustments in earnings estimates.

It’s worth mentioning that Style Scores serve as a supplement to the Zacks Rank, which is our stock-rating system known for its strong history of performance. Right now, Rivian Automotive holds a Zacks Rank of #2 (Buy). According to our findings, equities with a Zacks Rank of either #1 (Strong Buy) or #2 (Buy), along with Style Scores graded at A or B, tend to exceed market averages during the subsequent month.

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Aimed at Beating the Market?

To determine whether RIVN is a compelling momentum stock, we should review certain aspects of momentum investing to assess if this vehicle maker measures up.

A solid indicator of a stock’s performance can be gauged by examining its recent price movements, since this may indicate present market sentiment and whether buying or selling pressure is dominating. Additionally, comparing a stock with others within the same sector can assist investors in identifying leading firms in specific industries.

For RIVN, the stock has gained 3.11% in the last seven days compared to the Zacks Automotive - Domestic industry, which hasn’t seen much movement during this timeframe. Over an extended period, the positive trend for RIVN continues; its share price increased by 21.7% month-over-month, significantly outperforming the industry’s 7.78% rise.

Looking at extended time frame pricing indicators, such as trends from the past three months or one year, can also be beneficial. Over this period, shares of Rivian Automotive have risen by 4.35% in the last quarter and climbed 34.31% within the year. Conversely, the S&P 500 index has experienced a decline of -3.09% and an increase of 13.39% during these respective periods.

Investors ought to pay attention to RIVN’s mean 20-day trading volume as well. Trading volume serves multiple purposes, and calculating this 20-day average provides an effective price-to-volume reference point. Typically, a climbing stock accompanied by higher-than-average volume indicates a positive outlook, whereas a falling stock under similar conditions often signals negativity. Currently, over the past twenty days, RIVN has been seeing approximately 30,243,276 shares traded daily on average.

Earnings Outlook

The Zacks Momentum Style Score takes into account various factors such as estimate revisions along with a stock’s price changes. It's important for investors to recognize that earnings forecasts play a crucial role in determining the Zacks Rank, and maintaining an advantageous position in these areas could be beneficial. This has particularly been observed lately with RIVN.

In the last two months, six analysts raised their earnings forecasts for this year without any lowering them. This has improved RIVN’s overall forecast, which shifted positively from an estimated loss of $2.91 per share to one of $2.46 over the past sixty days. For the upcoming fiscal year, five upward adjustments were made against only one downward adjustment during the same timeframe.

Bottom Line

Considering all these factors, it’s not surprising that RIVN has earned a #2 (Buy) rating with an impressive Momentum Score of A. Should you be looking for a promising choice likely to increase in value soon, consider keeping Rivian Automotive on your watchlist.

The article was initially published on Zacks Investment Research (romero.my.id).