24/7 Wall St. Insights
- Where should investors seeking opportunities in alternative energy be looking now?
- Wall Street is particularly optimistic about Enovix Corp. (NASDAQ: ENVX).
- Also: Discover 2 dividend legends to hold forever.
A sizable market rotation is underway, and many investors may be taking another look at energy stocks. Investing in the sector remains popular, as it offers plenty of opportunities. And not all of them rely on the price of petroleum. Including alternative energy stocks and others adjacent to the industries, where should investors seeking opportunities in energy be looking now?
Let’s take a look at energy stocks for which Wall Street analysts have big expectations for the rest of the year and into the next. (Note that we revealed our prediction for the best-performing oil and gas stock in a separate post.)
| Stock | Mean Target | Upside |
| Arch Resources Inc. (NYSE: ARCH | ARCH Price Prediction) | $174.67 | 36.9% |
| Bloom Energy Corp. (NYSE: BE) | $17.67 | 46.2% |
| ChargePoint Holdings Inc. (NYSE: CHPT) | $3.30 | 71.9% |
| Enovix Corp. (NASDAQ: ENVX) | $30.30 | 189.4% |
| Fluence Energy Inc. (NASDAQ: FLNC) | $27.96 | 40.8% |
| Nextracker Inc. (NASDAQ: NXT) | $59.93 | 37.8% |
| Plug Power Inc. (NASDAQ: PLUG) | $4.25 | 88.1% |
| Uranium Energy Corp. (NYSE: UEC) | $9.80 | 75.6% |
Clearly, as far as Wall Street is concerned, Enovix has the greatest potential upside of these energy stocks in the coming year. Does that mean that its shares are undervalued? Or perhaps one overzealous analyst has skewed the mean?
Why Invest in Enovix?
Are Enovix shares poised for a turnaround?
Enovix stock is more than 40% lower than its 2021 initial public offering (IPO) share price. Shares were last seen trading above $10 apiece. They hit an all-time high near $40 a share in late 2021.
The company claims to be the leader in advanced silicon-anode lithium-ion battery development and production. It says it aims to provide designers of category-leading mobile devices with a high-energy battery so they can create more innovative and effective portable products, as well as to help enable widespread utilization of renewable energy.
The company does not offer a dividend. The stock ended 2023 with a fractional gain, well underperforming the broader markets. Shares retreated since hitting a 52-week high back in July. So, the question is whether the shares are poised for a rebound. Let’s have a look at what Wall Street expects.
Enovix, the Company
A maker of lithium-ion batteries for smartphones, electric vehicles, and more.
The company designs, develops, and manufactures advanced silicon-anode lithium-ion batteries. Its 3D cell architecture is proprietary and helps its offerings to have higher energy density, longer cycle life, and higher capacity. The batteries are intended to power a variety of technologies, including wearables, Internet of Things, smartphones, laptops and tablets, as well as industrial, medical, and electric vehicles industries.
Enovix is based in Fremont, California, which is in the San Francisco Bay area. The company was founded in 2007. In July of 2021, it went public. The company competes with or is similar to Albemarle Corp. (NYSE: ALB), Bloom Energy, FREYR Battery Inc. (NYSE: FREY), Plug Power, and QuantumScape Corp. (NYSE: QS).
The company announced a notable collaboration agreement when it posted its second-quarter results at the end of July. It also made deals in May and in June. Last year, Enovix completed an acquisition, and its CEO received an executive of the year award.
Enovix, the Stock
Is Enovix stock about to soar?
Since the beginning of the year, the share price has ranged between $5.70 and $18.68. The stock is down more than 15% year to date, while the Nasdaq is up almost 19% in that time. Note that the $30.30 consensus price target would be a multiyear high. The consensus recommendation of analysts has been to buy shares for at least three months. Canaccord Genuity, Cantor Fitzgerald, and Piper Sandler reiterated Buy-equivalent ratings earlier this month, and Benchmark initiated coverage with a Buy rating in July.
Institutional investors hold nearly 49% of the shares. BlackRock and Vanguard have notable stakes. More than 145 million shares, or over 31% of the float, are held short. Note that a director sold 7,500 shares in June.
Wall Street expectations for where the stock goes in the next 52 weeks vary widely but are all especially positive. Even the lowest target signals that the share price has plenty of room to run in the next 52 weeks.
| Low target | $14.00 | 33.7% |
| Mean target | $30.30 | 189.4% |
| High target | $100.00 | 855.1% |
While Wall Street is optimistic about Enovix stock, note the sizable short interest. That indicates bets that the share price will fall. Also note that Enovix is often makes lists of meme stocks. Those are stocks that generate a lot of speculative interest but may lack fundamental value and be highly volatile.
Wall Street does not seem too concerned about that, however, at least in the short term.
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