Novonix Ltd (ASX: NVX) is an ASX-listed battery materials and technology company aiming to dominate the electric vehicle and grid storage market. The company is engaged in rapid battery development solutions, anode materials, and battery technology. The company was founded in 2012 and is based in Brisbane, Australia.
NOVONIX provides the lithium-ion battery sector with cutting-edge, high-performance materials, equipment, and services. The company is making sales in 14 countries. For a more sustainable energy future, the company develops materials and technology for longer-lasting, lower-cost batteries that can be recharged more often.
This week, the NVX stock was seen losing and gaining value frequently. There is no price effecting news, but still, the stock is moving rapidly.
NVX: 1H22 Key Financials
NVX stock trades at $2.44, increasing more than 13.5% in single-day trading. The stock lost around 6% the same week before the current gain. The market cap of the company is approximately 1.19 Billion AUD.
- Novonix recorded revenue of $4 million in the first half of 2022. It is a gain of more than 72% YoY.
- The company’s operating expense increased by 194% YoY to $26.38 million in 1H22.
- Its net loss in the 1H22 was $28.84, $168% more than the loss in 1H21.
- The EBITDA of the company was about $10.38 million.
- As of 31 December 2021, the company had cash and cash equivalents of 259.5 million.
- Novonix commenced trading on NASDAQ on 1 February 2022.
- Novonix and Emera Technology announced the delivery of a custom-designed micro-grid battery prototype.
Reason for the NVX stock price surge
NVX shares were on a roller coaster ride this week. The stock first lost value on 22 June and gained on 24 June. The company has not released any share price affecting news. The stock came under the blow due to industry news.
First, the stock price got affected due to the updated price target of lithium by Goldman Sachs. Goldman first gave a price target of $60,000 per tonne for lithium in 2022. But in the recent updates, they revised their price targets, reduced them to $54,000 in 2022, and lowered them to $16,000 in 2023.
As a result, all lithium stocks listed on ASX and other financial markets shed a heft amount of value.
Meanwhile, the broker Macquarie has upgraded its price targets for spodumene. They expect the spodumene price to reach US$4,900 per tonne in September. So the top broker has upgraded its short-term and medium-term forecasts by 8-13% per tonne.
The reason for increasing the price target was the continuous market deficit despite the accelerating supply of lithium.
So it’s possible that investors are enraged about lithium and battery stocks because of this optimistic forecast. Or investors may have concluded that the share prices of Novonix and other companies were too low and have repurchased.
What does it mean for ASX Lithium stocks?
Lithium miners are price takers, just like any other ASX-listed resource firm. Their profits increase as lithium prices rise.
An increasing number of people are investing in lithium stocks on the Australian Securities Exchange (ASX). People, governments, and corporations all across the globe are beginning to take climate change seriously. As a result, almost every firm participating in the green energy supply chain is gaining pace.
The success of lithium stocks somewhere lies in the grey area. No one is sure whether lithium companies will be a hit or flop. The reason is that too many young companies are playing in this sector as of now. Too much supply of lithium could devalue the commodity itself in the future.
Novonix is currently under the same wave that caused the decline in all lithium stocks. Investors were seen reluctant to invest in lithium stocks in the past couple of weeks. But the new update in the price target for spodumene has given a ray of hope to investors. But no one is sure whether the lithium stocks will be a success in the future or not because there are plenty of companies in the lithium sector, and it could result in the oversupply of lithium.