Enovix expands to meet defense industry demand with new acquisition

FREMONT, Calif. - Enovix Corporation (NASDAQ:ENVX), a leader in high-performance battery technology with a market capitalization of $1.46 billion, has announced the acquisition of a battery cell manufacturing facility from SolarEdge Technologies. According to InvestingPro data, the company maintains a strong financial position with more cash than debt and a healthy current ratio of 5.49x. The facility, located in South Korea, is set to bolster Enovix’s capacity to meet the increasing demand from the defense sector. The transaction is expected to be finalized in April 2025, pending customary closing conditions.

The acquired assets include a 330,000 square-foot manufacturing plant adjacent to Enovix’s current operations in Nonsan City, and battery cell development and manufacturing equipment. Enovix aims to integrate certain SolarEdge Korea team members into its workforce, enhancing its research and development, manufacturing, and engineering capabilities. While the company’s revenue grew significantly by 202% in the last twelve months, InvestingPro analysis indicates current gross profit margins remain challenging at -8.86%.

Enovix CEO Dr. Raj Talluri expressed the company’s commitment to advancing battery technology, noting that the expansion will streamline their supply chain and accelerate innovation. The acquisition is anticipated to not only increase manufacturing capacity but also to improve gross margins and expedite scaled production.

Projections for 2025 and 2026 indicate a rise in battery sales manufactured at the Korea facility, with a greater portion expected to serve defense and industrial applications. Enovix Chairman T.J. Rodgers highlighted the strategic move as a step towards delivering high-quality solutions to a broader customer base more efficiently.

This forward-looking statement is based on the company’s expectations and is subject to risks and uncertainties. The actual results may differ due to various factors, including market acceptance and global economic conditions. With analysts projecting continued sales growth and the stock currently trading below its Fair Value according to InvestingPro, investors seeking deeper insights can access comprehensive analysis and 12 additional ProTips through InvestingPro’s detailed research reports. This news is based on a press release statement from Enovix Corporation.

In other recent news, Enovix Corporation reported a 13% sequential increase in revenue for Q3 2024, reaching $4.3 million, although it posted a non-GAAP EPS loss of $0.17. The company announced the completion of a significant milestone by delivering customized sample battery cells to a major smartphone OEM, which met specific requirements and triggered a customer payment. Enovix also achieved formal ISO certification, which is expected to bolster customer confidence and support the company’s plans for mass production by late 2025. Oppenheimer maintained an Outperform rating with a $36 price target, citing the company’s progress and potential for further contracts. Cantor Fitzgerald reiterated an Overweight rating with a $30 price target, following Enovix’s first quarter of positive gross margin and expansion into the drone market. The company opened a new manufacturing facility in Malaysia, enhancing its global presence and operational capabilities. Analysts from Stifel highlighted Enovix’s entry into the smartphone battery market, projected to be worth over $10 billion, as a pivotal move for the company’s future growth.

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