Enovix Corp. is set for a major rally, according to Loop Capital. The Chicago-based investment bank doubled its price target on the battery-maker’s stock to $100 from $50 and reiterated a buy rating. The new price target implies that the stock could surge 425% from where shares closed Friday, at roughly $19. “We see ENVX entering a ‘Clarion Call To Action’ with the only question being ‘how much ENVX should I own and at what price?'” Ananda Baruah wrote in a Sunday note. The lithium battery stock is well positioned to outperform in the next 6-18 months based on several catalysts, and even shoot higher than the $100 price target, according to Baruah. In the second half of 2023, Enovix will likely start recognizing initial revenue from both Apple and Samsung watches. The company may also be able to start recognizing licensing revenue from these deals in 2024. Strategic partnerships would boost stock Loop also believes that in coming quarters Apple, Meta, Samsung or Tesla could take an equity stake in Enovix or initiate a production licensing agreement. “We believe this could move the stock tremendously,” Baruah wrote. “We further believe ENVX is un-acquirable (M & A) for the time being, providing an opportunity to maximize stock price L-T, as they have all large customers wanting their product.” The company may also announce an electric vehicle partnership in 2022 and begin to see revenue from the car in 2023. “Our work the last two weeks suggests EV partners (including Tesla) are pulling plans very forward with ENVX and that revenue can come in 2023 with potential announcements 2H22 and/or 1H23,” said Baruah. “Our view is that if Tesla and ENVX were to announce a partnership the stock could trade at $100 on this alone, as the EV TAM is 7-8x (our calcs) the size of the consumer TAM and this would be proof ENVX is real here.” Part of the reason that EV partners are moving forward is because of Enovix’s BrakeFlow technology, with combustion-fire containment. “These customers are increasingly understanding they have to partner with ENVX and they can’t afford not to as the others are,” Baruah said. “In a world where the best wins, ENVX appears to have the best, they are entering production and have access to seemingly ‘unlimited’ demand.”
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