By Michael Elkins
Shares of Enovix Corp (NASDAQ:ENVX) are up more than 9% on Wednesday after Cowen reiterated an outperform rating and raised their price target by $17 to $36 (prior $19).
A Cowen analyst wrote in his note that he believes the battery company is likely to enter the EV battery market via a licensing agreement with established battery manufacturers whereby Enovix receives a fixed percentage of battery revenue where its tech is used.
The analyst sees possibility for a near-to-intermediate term announcement highlighting a licensing agreement or JV partner. As for who the ultimate auto OEM customer could be, a significant amount of investor attention has been placed on Tesla (NASDAQ:TSLA). Especially since former Tesla executive, Greg Reichow sits on the company’s board. The analyst believes ENVX's architecture could make sense in TSLA's hands given the latter's focus on Si-anodes as disclosed at its battery day and given its takeover of SiILion last fall.
The analyst wrote in his note that Cowen updated its model “for a change in EV battery commercialization (licensing vs. JV), slight increase to consumer electronic cell pricing (more within). Revenue and FCF are higher in out years through our 2035 forecast resulting in our DCF based price target increasing to $36/sh from $19/sh prior.”