February 2, 2023

Novonix Stock Price Slumped by Staggering 84% in 2022: What Next?

  • The Novonix stock price closed in 2022 at $1.47, following a whopping 84% slump on the year.
  • The downturn potentially influenced the market’s unwillingness to put cash in unprofitable shares amidst increasing interest rates.
  • Interestingly, a broker anticipates a 97% recovery from the embattled tech stock.

Novonix Ltd witnessed a dramatic 2022. The battery materials & tech stock lost about 84% within the twelve months ending December 31, 2022. After ending 2021 near $9.19, NVX swapped hands for only $1.47 as the previous year ended.

For comparison, the ASX/S&P 200 (ASX: XJO) dropped about 5.5% last year. So what happened in 2022, and can Novonix stock recover its slump in 2023?

Novonix Stock Price Dropped 84% in 2022

2022 was a fascinating year for Novonix. The stock welcomed the year, changing hands near its ATH following 2021’s massive 650% gain. Moreover, the company revealed plans to acquire a Nasdaq listing, which it attained in February.

During the time, CEO and co-founder Dr. Chris Burns stated that a Nasdaq listing was the best way to start 2022 and continue the previous year’s momentum. He added that the listing furthers the firm’s longer-term objective to be the leading company in the electrification business.

Furthermore, the firm declared a supply partnership with KORE Power, scheduled to start in 2024, plus a $150M government grant to finance its anode materials segment’s expansion in 2022. Indeed, all that appears positive. Now, what could have triggered the 84$ share price dive in Novonix? Well, rising interest rates and continued losses may have influenced it.

What Perhaps Went Wrong

Novonix’s F.Y. 22 earnings comprise bad and good news. The impressive news is the company’s revenue increased by 61% Y.Y. to $8.4 million. On the other side, it recorded a $71.4M loss, lower than that $18m loss of the prior year.

While Novonix still boasted an impressive cash amount in its books, increased interest rates may have propelled market watchers from the deteriorating stock amidst the costly debt atmosphere. It may not help that the firm’s auditors flagged worries about its capability to keep functioning without raising money to finance its expansion.

Remember, ASX 200 technology shares struggled over the past year. As a result, the ASX/S&P 200 Info Tech Index lost around 34% in 2022.

What for Novonix Shares in 2023?

While it remains impossible to forecast what 2023 may have for the former favorite tech stock, one broker shows optimism. Morgans slapped the stock with a price target of $3.11 and a hypothetical buy rating. That translates to a 97% surge from the current price.

The broker stated that Novonix provides ASX investors a chance to access the North American battery industry.

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