Benzinga - by Surbhi Jain, .
As the clean tech sector faces headwinds amid liquidity concerns and weaker-than-expected demand, JPMorgan’s analysis suggests that clean tech companies are likely to adopt a defensive stance in the upcoming Q4 earnings.
Clean Tech Stocks Have Underperformed Market With 1 Exception
Clean tech stocks have largely underperformed the broad market over the past year. The only exception appears to be Enovix Corp (NASDAQ:ENVX).JPMorgan remains bullish on Enovix’s potential for significant revenue growth, particularly in consumer electronics and the EV market. Analysts set a price target of $18 for the stock, grounded in cautious assumptions about manufacturing line installations, presenting a potential increase of over 50% from the current price levels (approximately $11.85 per share).
Clean Tech Has Largely Underperformed
On the other hand, the underperformance in the Clean Tech space has been more pronounced in sectors such as:- EV Charging – ChargePoint Holdings Inc (NYSE:CHPT) & EVgo Inc (NASDAQ:EVGO)
- Hydrogen – Plug Power Inc (NASDAQ:PLUG)
These recent developments have garnered controversy and skepticism among investors:
- Plug Power Stock Up 26% In 5 Days – Fundamental Rally Or Short Squeeze?
- Plug Power’s Rocky Road As Hydrogen Dreams Face Financial And Regulatory Challenges
- ChargePoint Trims Staff By 12%, Aiming For $33M In Annual Savings Amid EV Charging Race
- EVgo’s Challenges Ahead: Analyst On How Price Competition And Regulatory Credits Could Impact Margins And Returns
- Tesla Dominates EV Charging Race Installing 6,000 Fast Chargers In 2023, ChargePoint And EVgo Struggle To Keep Up: Report
Peterson anticipates that Clean Tech companies will continue to prioritize cost-saving initiatives and capex reduction throughout 2024, given the uncertain demand influenced by macroeconomic factors.
Enovix – Potential Standout In Clean Tech
Peterson identifies Enovix as a potential standout in the clean tech landscape. Currently, rated Overweight by JPMorgan, Enovix is well-positioned relative to its peers. The optimism is attributed to several positive catalysts, including the completion of Factory Acceptance Testing and Site Acceptance Testing, marking the commencement of high-volume manufacturing at Fab-2.JPMorgan expects Enovix to report modest single-digit millions in revenue for Q4 2023, driven by contributions from acquired Routejade and ongoing shipments to the U.S. Army. The completion of testing milestones and the strategic deferment of spending away from Fab-1 in California are seen as positive developments.
Peterson emphasized Enovix’s focus on reducing cash burn while maintaining business opportunities, with expectations for a full year of about $20 million in revenue in 2024.
Enovix’s transition to Fab-2 is a long-awaited event, and JPMorgan anticipates positive outcomes, including sample production in 1H24 and high-volume production in the latter half of the year.
As clean tech companies brace for a challenging Q4, Enovix’s strategic moves and upcoming milestones position it as a potential bright spot, according to JPMorgan’s analysis.
Now Read: These 4 AI-Related Stocks Outside Magnificent 7 Are Already Outperforming In 2024
Photo: Shutterstock
Latest Ratings for ENVX
| Mar 2022 | Craig-Hallum | Maintains | Buy | |
| Jan 2022 | Cowen & Co. | Initiates Coverage On | Outperform | |
| Dec 2021 | Piper Sandler | Initiates Coverage On | Overweight |
View the Latest Analyst Ratings
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