My Favorite Electric Vehicle (EV) Stock to Buy Before Nov. 30

Electric vehicle (EV) stocks used to be market darlings. In 2021, several major EV makers went public. The valuations then were dazzling.

A lot has changed since 2021. Valuations have come crashing down to Earth. So if you've been looking to add significant growth potential to your portfolio, now looks like your time to strike. For investors looking to maximize their upside potential, there's one EV stock that sticks out.

3 reasons I love this EV stock

Most car buyers still haven't heard of Rivian (NASDAQ: RIVN). Compared to a major EV maker like Tesla, Rivian still has a lot of work ahead of it. Even after a strong growth spurt since its IPO in 2021, sales only recently surpassed the $5 billion mark -- less than 10% of Tesla's annual revenues.

Most people haven't heard about the company, but that hasn't stopped it from creating a strong sense of brand loyalty among its existing customers. This is the first thing that I love about Rivian: Those who own its vehicles adore the company. Even after Consumer Reports' experts panned Rivian's two existing models, a follow-up survey of actual owners found that 86% of them wanted to buy another Rivian for their next vehicle purchase. No other car manufacturer reached the 80% mark. Keep in mind that the survey included both EV and conventional auto makers. Rivian may not have the name prominence yet, but its customers simply love what the company produces.

This brings me to the second reason why I love Rivian: It's set to build on this reputation for quality with three new vehicles. Earlier this year, management revealed three mass market models: The R2, R3, and R3X. All are set to debut with starting prices under $50,000. That's the magic threshold that could catapult Rivian into being a household name. Right now, its two existing models -- the R1T and R1S -- both sell for around $100,000, capping Rivian's ability to grow as large as Tesla. But as Tesla proved with its mass market models -- the Model Y and Model 3 -- this category of EVs is what can send your sales soaring.

The final reason to love Rivian right now is that shares are historically very cheap. The stock trades at just 2.4 times sales -- a steep discount to Tesla's current valuation. There are some good reasons for this that we'll discuss in the next section. But make no mistake: If you want to buy Rivian stock, now looks like the best time to do so from a valuation perspective since its IPO in 2021.

RIVN PS Ratio data by YCharts. P/S = price-to-sales.

Should you buy Rivian before Nov. 30?

There are several reasons why Rivian's stock price is in the dumps. First, it posted a negative sales growth rate last quarter -- its first negative growth rate since going public. Tesla, meanwhile, grew its sales last quarter by around 6%. This weakness reflects overall weakness in EV sales across the U.S., but also Rivian's lack of mass market options. That gap should be solved with the launches of the R2, R3, and R3X. But these models aren't expected to hit the road until 2026 at the earliest. Meanwhile, Rivian is losing tens of thousands of dollars on every car it sells. The clock is ticking, and its cheap multiple reflects the market's skepticism.

All this said, there's still reason to buy Rivian stock before the end of the month. The company expects to achieve gross profitability by next quarter. The current slump in the EV market could be a temporary phenomenon. And if Rivian's new mass market models are able to reach the market, there's a good chance we'll see revenues double or even triple over time -- the same trajectory that Tesla's sales followed. It's a long-term investment thesis, but the current valuation discount is here right now.

If you've been waiting to initiate a position in high-growth EV stocks, don't wait. Just be prepared to add more to your position if shares show further signs of weakness.

Should you invest $1,000 in Rivian Automotive right now?

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Ryan Vanzo has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.