Shares of Rivian Automotive Inc (NASDAQ: RIVN) have been steadily recovering after what can only be described as a tough year. The stock continues to consolidate above April's all-time low and has now gained 30% since the start of last month. Though Rivian remains a long way from its 2021 and 2022 highs, there are reasons to believe it might be gearing up for a significant comeback.

Headquartered in California and with a market cap of $12 billion, Rivian is known for its electric SUVs and trucks. It's made a name for itself as a major player in the EV industry. As we head into the last couple of weeks of the year, investors have been reassessing Rivian's prospects. For those brave enough to lean into a high-risk, high-reward play, now could be the time to consider getting involved.

Rivian’s Fundamental Performance: Challenges and Opportunities

To start with, let's examine Rivian's fundamental performance. The past few quarters have been rocky, to say the least. The company has struggled to consistently beat analyst expectations for both EPS and revenue, and its most recent report in November actually showed revenue contracting by 12% year over year.

This trend has understandably weighed on investor sentiment, with demand challenges and rising costs hitting the company hard and making the stock unattractive. That said, stocks like Rivian will always appeal to the more forward-looking investor, and for the optimistic, there are reasons to be excited. For example, management confirmed in its latest update that the company remains on track for positive gross profit growth in the final quarter of the year. 

RJ Scaringe, Rivian's CEO, also gave a bullish outlook: "This quarter, we have made progress against our key objectives, particularly on improving the cost structure of our Gen 2 R1 platform. Additionally, we're excited about our midsize SUV, the R2, which we believe will drive long-term growth. Our proposed joint venture with Volkswagen adds another layer of optimism."

For those of us on the sidelines, these developments hint at a recovery in progress, which makes Rivian an interesting comeback play for 2024. 

Analysts Highlight Rivian’s Recovery Momentum and Growth Prospects

Building on the turnaround potential, is the fact that several analysts are bullish on Rivian's prospects. The team over at Wedbush maintained their Buy rating on Rivian last month, pointing to improving demand trends and operational efficiencies. 

Their $20 price target stands out in particular, implying a potential upside of 70% from where Rivian closed on Wednesday. Stifel Nicolaus and Robert W. Baird have also shared similar sentiments in recent weeks, both rating Rivian as a Buy. 

Recovery Rally Calls Create Attractive Risk/Reward Profile for Rivian

This optimism doesn't come without risks. Rivian's stock remains far below its early 2022 highs, and 2024 has arguably been its toughest year yet. Headwinds, including falling demand and rising costs, have shown little mercy, and this has understandably kept many investors cautious.

Adding to this, the team at Goldman Sachs recently maintained a Neutral rating on Rivian, while Royal Bank of Canada took the same stance. Their caution reflects concerns over execution risk and whether Rivian can deliver on its ambitious targets.

Still, the stock has been setting higher lows since its April low, which suggests that the worst may be behind it. With a host of analysts now calling for a recovery rally, the risk/reward profile appears attractive for those willing to ride the wave.

Getting Involved: Rivian Stock Shows Momentum Heading Into Year-End

Heading into the final few weeks of the year, this is a stock that's worth watching closely, especially with momentum building both fundamentally and technically. Rivian's relative strength index (RSI) currently sits at 60, indicating solid upward momentum while still leaving room to run. For context, an RSI above 70 typically signals overbought conditions, so the current level suggests there's a ton of further upside potential.

The broader market environment also works in Rivian's favor. The S&P 500 is hitting fresh all-time highs, and the Fed's recent rate cuts have fueled a risk-on sentiment that's driving interest in high-potential plays like Rivian. It may be a while before the stock is back trading above $100, but it looks like it's ready to begin making the journey up to that level soon.