$ENVX A Path To Silicon HegemonyAfter reaching its quarterly production milestone earlier than expected, Enovix Corporation (NASDAQ: ENVX) ran 10%. Additionally, ENVX took another step toward mass-producing its batteries as it chose a site and hired a leadership team in Malaysia for its Fab-2 line. Meanwhile, ENVX stock is gaining investors’ interest lately following a short report that investors believe may be a malicious report from short sellers. With a high short interest, ENVX stock could be a short squeeze candidate to watch closely this week.
ENVX Fundamentals
Exceeding Production Targets
Earlier this month, ENVX announced that it had reached its Q2 production target of 18,000 units with two weeks remaining in the quarter, which sent ENVX stock up more than 10%. This is the second time ENVX will exceed its forecast since it also exceeded its Q1 forecast by almost 40%.
Furthermore, ENVX has chosen a Malaysian site for its Fab-2 ahead of schedule and has hired the leadership team as well as a team of 25 engineers, indicating that it may begin production earlier than the expected date in 2024, which will see ENVX exponentially increase its 2024 production.
Malicious Short Report?
On another note, a small Twitter account recently published a short report regarding ENVX stock on a newly made website. Some ENVX investors believe that this may be a malicious report from short sellers since ENVX is currently highly shorted, with 23% short interest and almost 32% of the float on loan, with the utilization rate remaining high at 100%.
The short report may make investors rally behind the stock, which would add buying pressure on the short sellers and make the stock run.
ENVX Financials
In its Q1 2023 report, ENVX’s assets decreased 7% QoQ from $ 440 million to $410 million and its cash and cash equivalents decreased 9% QoQ from $322 million to $293 million. ENVX’s total liabilities increased by 16% QoQ from $84 million to $98 million.
Operating costs increased almost 112% from $24 million to $51 million, which contributed to the operating loss increase of 152% YoY from $25 million to $63 million. As a result, ENVX reported a net loss of $73 million.
Technical Analysis
ENVX stock’s trend is neutral with the stock trading in a sideways channel between $13.20 and $14.34. It is also worth noting that the stock has recently broken its upper trendline and may enter a new channel. Looking at the indicators, the stock is trading above the 200, 50, and 21 MAs which are bullish indications. Meanwhile, the RSI is overbought at 75 and the MACD is bullish.
As for the fundamentals, ENVX stock just witnessed a catalyst in ENVX reaching its Q2 production target early. ENVX exceeding the Q2 target and the increasing possibility of a short squeeze will be future catalysts for ENVX stock.
ENVX Forecast
ENVX reaching its quarterly targets early for the second consecutive quarter strengthens its chances of reaching its yearly target. Furthermore, it is planning to scale production after it has decided on a location for its Fab-2 and hired the leadership team as well as a team of 25 engineers for it. That, coupled with investors rallying behind ENVX stock due to the short report they deemed malicious makes ENVX a stock to keep an eye on.
