Stifel reiterated a Buy rating on Rivian on Monday, citing the EV maker’s “generally positive” quarterly earnings released in early November that sent shares more than 20% higher in a single session.
The Missouri-based firm has raised the price target on the stock from $16 to $17, three months after having trimmed it from $18 to $16.
The new target implies a potential upside of 12.51% based on Friday’s close at $15.11.
In a new research note, obtained by PriceTarget, analyst Stephen Gengaro wrote that Rivian‘s third quarter results but also the outlook are “generally positive.”
The analyst added that the “underlying long-term story is intact” while highlighting the increase in software revenue — related to the Volkswagen collaboration — and the cost reduction per vehicle sold.
Stock Performance
Rivian released its third-quarter earnings report on November 4, after market close. The results exceeded Wall Street expectations on gross profit and revenue.
The company’s stock closed at $12.50, down 5%. The next day, it jumped 23% to $15.42.
Over the last three months, Rivian saw its shares rise 21.8% and a total of 50% over the last twelve months.
Software and Service
According to Gengaro, Stifel’s confidence in the EV maker stems from the company’s “strong” software and service revenue and profitability in the most recent quarter.
Rivian reported a revenue of $416 million from its software development services, a 324% increase year over year.
According to the company, this increase came from “vehicle electrical architecture and software development services that were not performed last year.”
Rivian‘s management has disclosed in the earnings call following the report that about $214 million (about half) of the total Software and Services revenue came from the Volkswagen joint venture.
Rivian and Volkswagen formed a partnership last year, under which Volkswagen agreed to invest $5.8 billion in the EV maker, divided into six tranches, as part of a plan to integrate Rivian‘s advanced software architecture into its vehicles.
The company has received $2 billion from the German legacy automaker in the first two quarters of 2025, after reporting a positive gross margin.
Volkswagen is one of the two largest investors in Rivian (alongside Amazon).
Lower Costs
Stifel also highlighted lower costs on vehicle production, as the company prepares for production of the upcoming R2 SUV.
Gengaro said that the gross profit per vehicle (excluding software and services) “improved to ($985) from ($3,142) in 2Q25, exceeding our ($2,039) forecast.”
Rivian reported a positive gross profit in the third quarter, at $24 million. A year ago, the company had disclosed $-392 million.
Additionally, “COGS [Cost of Goods Sold] per unit [were] down ~$2,200 sequentially,” the analyst noted.
Gengaro stated that “once new policies are in place, [Rivian] expects tariff impact of a few hundred dollars per unit compared to several thousand dollars per unit previously.”
The mention was made by Chief Financial Officer Claire McDonough during the latest earnings call.
The analyst also referred back to a note he wrote in August, when he wrote that Rivian “noted it can cut cost by about half from R1 to R2.”
According to Chief Financing Officer Claire McDonough on the August earnings call, Rivian expects the R2 to cost less than “half as much per unit to produce as the R1 line.”
Previous Notes
Rivian released its second-quarter results on August 5, and Stifel published a research note reacting to the results on August 8.
By that time, Gengaro had lowered his price target on the company, citing concerns about regulatory credit sales, which had previously contributed to Rivian‘s positive results.
For example, the sale of regulatory credits helped Rivian achieve a positive gross margin in the first quarter and secured the first tranche of Volkswagen’s investment.
At the same time, recent policy changes affecting the EV landscape in the US prompted analysts to remain cautious about Rivian‘s full-year outlook.
Gengaro noted then that he expected Rivian‘s “full-year gross profit to be roughly break-even compared to a modest positive previously.”
