VinFast stock price analysis: how is it bigger than Rivian?

VinFast (NASDAQ: VFS) stock price has plummeted this year, falling by over 50%. It has also plunged by more than 95% from its all-time high, giving it a market cap of over $12 billion. It is not alone as most EV companies like Tesla, Rivian (NASDAQ: RIVN), Nio, and XPeng have also plunged as the industry goes through a major slowdown.

VinFast’s valuation is bigger than Rivian

Interestingly, investors believe that VinFast is a more valuable brand than Rivian, which has a market cap of over $10 billion.

This valuation gap happened even though Rivian makes better vehicles and makes more money than VinFast. VinFast built and delivered 34,855 vehicles in 2023 and almost 10,000 cars in the first quarter of the year.

Rivian, on the other hand, delivered over 50k and 13,588 vehicles in 2023 and Q1, respectively. At the same time, its annual revenue in 2023 came in at over $4.9 billion and $1.2 billion in the first quarter of this year. VinFast’s revenue almost doubled to $1.18 billion in 2023 and $292 million in the first quarter.

Additionally, Rivian has a better balance sheet than VinFast. VinFast ended last quarter with over $119 million of cash in its balance sheet while Rivian had over $7.8 billion.

I also believe that Rivian makes some of the best electric vehicles in the United States. It focuses on SUVs, which have become highly popular among US consumers as evidenced by the strength of the Ford F150 vehicle.

Rivian also has a role in the commercial industry through its collaboration with Amazon. It has also expanded this partnership to include other companies like Walmart and Target. This is a big business as most companies focus on transitioning to electric vehicles.

VinFast’s vehicles have also received negative reviews in the past, with MKBHD noting that it was the worst vehicle he ever reviewed. To be fair: the company made most of those fixes, which MKBHD has appreciated.

However, the company still faces more challenges. Just this week, the National Highway Traffic Safety Administration (NHTSA) launched an investigation into the company after its VF8 SUV caused a fatal crash.

Is VinFast stock a buy?

VinFast vs Rivian vs Nio YTD performance

To be clear: VinFast and Rivian are both cash burning entities in an industry that is not growing as fast as it did. They also have substantial debt levels, with their  long-term debt being over $998 million and $4.4 billion, respectively.

What is clear, however, is that VinFast is quite an overvalued company that could be forced to raise additional funds. It needs these funds to implement its US expansion, handle a  potential recall, and boost vehicle production.

Also, VinFast is also overvalued than Nio, a Chinese company that delivered over 30k vehicles in the first quarter and made over $2.4 billion in 2023. The last quarterly results showed that Nio had over $7 billion in cash against a market cap of over $10 billion.

Therefore, I suspect that the VinFast stock has more room to run this year. My estimate is that it could drop to below $4, which is in line with what I noted in this article in December.