What happened
Ripping out of the gate this morning, shares of Enovix(NASDAQ: ENVX) skyrocketed as high as 21.9%. In addition to the company's encouraging second-quarter 2023 financial results, some favorable analyst coverage is convincing investors to power their portfolios with this battery stock.
As of 12:05 p.m. ET, shares of Enovix are up 3.7%.
So what
Enovix produced 22,502 units in Q2, beating its production target of 18,000, and it forecasts continued growth in the third quarter of 36,000 units as it makes additional improvements to operations at its Fab 1 facility. The achievement is an important step as the company progresses toward wide-scale production of its advanced silicon batteries.
Additionally, Enovix stated that it plans on starting Factory Acceptance Testing at its Gen2 Autoline next month with the completion of testing expected to occur by the end of the year. The development of Gen2 plays a prominent role in the company's plan to ramp up production of its cells. Enovix estimates that at 80% overall equipment effectiveness, the Gen2 lines, depending on cell size, could produce 9.5 million to 18.9 million batteries annually.
Further electrifying investors' excitement, two analysts expressed their optimism that Enovix has room to run. George Gianarikas, an analyst at Canaccord, hiked the price target on Enovix to $22 from $20 while keeping a buy rating. Tony Stoss, however, has an even more optimistic view. An analyst at Craig-Hallum, Stoss raised his price target to $28 from $15. Based on the stock's closing price of $19.60 yesterday, Stoss' price target implies upside of almost 43%.
Now what
Enovix has made important progress toward getting its batteries into customers' hands. But it's not there yet. Growth stock investors, therefore, will want to look for future acknowledgement from management that its plans remain on track, including progress in developing a new manufacturing facility in Malaysia.
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Scott Levine has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
