With its share price down by a whopping 80% over the last 12 months, Rivian Automotive (NASDAQ: RIVN) has been a big disappointment for its early investors. While a lot of the downside can be blamed on macroeconomic factors outside management's control, the company's high valuation was hard to justify. Let's discuss whether shares are now cheap enough to make them a buy. 

Founded in 2009, Rivian Automotive is an American car company that specializes in all-electric trucks and SUVs. The stock went public in late 2021 at $78 per share, giving it a market cap of over $66 billion, despite having virtually no revenue or profits at the time. 

Perhaps Rivian's IPO was one of many signs that financial markets were overheating. And by 2022, the U.S. Federal Reserve embarked on its fastest rate-hike cycle in history, taking its federal funds rate from zero to 4.10% at the time of writing. Higher rates increase the cost of capital and change investor risk/reward calculations -- often leading to massive declines for richly valued growth stocks like Rivian.

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Source Fool.com