(As of 07/24/2024 ET)
- 52-Week Range
- $5.70
▼
$23.90
- Price Target
- $19.17
As promising as next-gen mobile technology is with the growth of the internet-of-things (IoT), edge artificial intelligence (AI), and autonomous electric vehicles (EVs), the limitations lie in the ability to power them. Current lithium-ion batteries are reaching their limits when it comes to performance. AI applications take considerably more electricity to operate. This limits the capacity to perform edge AI through portable devices like smartphones, tablets, laptops, and wearables. Enovix Co. NASDAQ: ENVX is looking to change that with its 3D silicon-anode batteries.
Enovix operates in the oils/energy market, competing with battery makers QuantumScape Co. NYSE: QS, Energizer Holdings Inc. NYSE: ENR, and Samsung Electronics Co. Ltd. OTCMKTS: SSNLF.
Here’s How Enovix’s 3D Silicon-Anode Technology is Better
Current lithium-ion batteries use graphite anodes. Silicon stores lithium much better than graphite and has 10x higher energy density. This enables faster charging and enhanced safety. However, the inherent problem is that silicon expands up 4x its size during charging cycles, causing it to crack. For this reason, silicon is used in small amounts mixed with graphite in current lithium-ion batteries, which are reaching their limitations.
Enovix’s patented 3D silicon-anode batteries implement a structural constraint system that keeps the silicon particles under constant pressure to limit swelling and cracking. The Enovix battery minimizes swelling to less than 2% cell thickness after 500 cycles. This enables it to maintain electrical contact between components to improve the battery life cycle. Enovix’s batteries have a 100% active silicon anode that provides high energy and high capacity. Its BrakeFlow technology, comprised of 100 micro-resistors in its 100-electrode stack to protect each Enovix cell, makes it safer to minimize battery heat and potential for explosions.
ENVX Triggers a Rising Wedge Breakdown
The daily candlestick chart for ENVX illustrates a rising wedge breakdown pattern. A rising wedge is comprised of converging rising trendlines with higher highs and lower lows. The breakdown was triggered when ENVX fell below the lower trendline at $17.68. The daily relative strength index (RSI) fell to the 52-band. Pullback support levels are at $14.78, $12.45, $10.12, and $8.13.
Enovix Generates Revenues
Enovix reported a loss of 31 cents in Q1 2024, which aligns with consensus estimates. Revenues surged 26,260% to $5.27 million, up from $21,000 a year ago, versus $3.7 million consensus estimates. Revenues were generated from battery sales to IoT customers. Stronger revenues and a favorable product mix enabled its first-ever positive non-GAAP gross margins. The company aims to reduce over a third of its fixed costs, amounting to more than $35 million annually, by the end of the year. A more efficient cost structure will reduce capital needs and accelerate the company’s path to profitability.
Enovix’s Strategic Business and Factory Updates: Driving Growth and Innovation
Factory acceptance testing (FAT) is complete for its Gen2 Agility line and nearing completion for its high-volume Gen2 Auto line. Site acceptance testing (SAT) has been underway for both lines, enabling the first samples of EX-1M batteries to be produced in Q2 2024 and the capacity to support qualifications for multiple leading customers.
Enovix reached a development agreement with a top-5 smartphone original equipment manufacturer (OEM) by unit volume in the quarter. Enovix is building EX-1M battery cells in Fremont, aligned with specifications received from leading smartphone customers. Six of the top-8 smartphone OEMs in the world (by unit volume) will be receiving samples, which will begin shipping in Q2 2024.
The company stated, “Our thesis with a Mobile-first approach to product development is that the smartphone sets the standard for battery technology in consumer electronics broadly, which should also allow us to translate success in smartphones to other areas. During our customer visits in the first quarter of 2024, including at the Mobile World Congress trade show, we received positive feedback of this approach as we saw interest in EX-1M for not only smartphones, but IoT products as well.”
Enovix expects Q2 2024 revenues between $3 million to $4 million and an adjusted EBITDA loss of $26 million to $32 million. Non-GAAP EPS loss of 22 cents to 28 cents is expected in Q2 2024.
Key Agreements and Partnerships: Driving Enovix’s Expansion
- Overall MarketRank™
- 3.28 out of 5
- Analyst Rating
- Buy
- Upside/Downside
- 26.8% Upside
- Short Interest
- Bearish
- Dividend Strength
- N/A
- Sustainability
- N/A
- News Sentiment
- 0.55
- Insider Trading
- Selling Shares
- Projected Earnings Growth
- Growing
On June 25, 2024, Enovix signed an agreement with a technology company to provide its silicon batteries and packs for a mixed-reality headset. The company will receive an immediate one-time payment for the tooling to support battery pack specifications and follow-up payments upon the delivery of samples and production quantities. There is speculation that the unnamed technology company could be Apple Inc. NASDAQ: AAPL or Meta Platforms Inc. NASDAQ: META, both of which have headquarters in California.
On June 26, 2024, Enovix signed a memorandum of understanding (MOU) with Elentec, a globally trusted battery manufacturing partner, to support its growth with target customers worldwide. Enovix can fast-track and utilize Elentec’s battery pack design and high-volume manufacturing capability through a strategic partnership. Contingent on the continued success of business and technical negotiations, the companies will collaborate in forming custom development of Enovix battery cells into multiple battery packs for consumer, military, and industrial applications.
Enovix analyst ratings and price targets are at MarketBeat. There are seven analyst ratings, including one Strong Buy, five Buys, and one Hold rating.
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