Is Enovix (ENVX) Now An Opportunity After Recent Share Price Weakness?
- If you are wondering whether Enovix at around US$7.53 is starting to look interesting, you are not alone. The key question is how that price stacks up against what the business might be worth.
- The share price has seen a 8.6% decline over the last week, a 1.3% decline over the last month, and is down 4.6% year to date and 38.9% over the past year, which will shape how you think about both upside potential and risk.
- Alongside these moves, recent company updates and industry headlines around advanced battery technology and commercialization timelines have kept Enovix on many investors' watchlists. These developments give important context for why sentiment around the stock has shifted over different timeframes.
- On our valuation checks, Enovix scores 3 out of 6. Next, we will look at what different valuation methods say about that price, before ending with a way to think about valuation that can give you a clearer long term view.
Find out why Enovix's -38.9% return over the last year is lagging behind its peers.
Approach 1: Enovix Discounted Cash Flow (DCF) Analysis
A Discounted Cash Flow, or DCF, model estimates what a company could be worth by projecting its future cash flows and then discounting those back to today using a required return. It is essentially asking what all those future dollars are worth in present terms.
For Enovix, the model used is a 2 Stage Free Cash Flow to Equity approach. The latest twelve month free cash flow is a loss of $176.84 million. Analyst and extrapolated projections in the model have free cash flow moving to $144.45 million by 2028, then to $955.45 million by 2035, all expressed in dollars and kept under the $1 billion mark in the forecast window provided.
Based on those cash flows, the DCF output suggests an intrinsic value of about $33.30 per share. Against a recent share price around $7.53, this indicates the stock trades about 77.4% below that modeled value on this measure.
Result: UNDERVALUED
Our Discounted Cash Flow (DCF) analysis suggests Enovix is undervalued by 77.4%. Track this in your watchlist or portfolio, or discover 872 more undervalued stocks based on cash flows.
Approach 2: Enovix Price vs Book
For companies that are still building toward consistent profitability, price to book, or P/B, is often a useful yardstick because it compares the market value directly with the accounting value of net assets on the balance sheet, rather than relying on earnings that may still be volatile or negative.
In general, the “right” multiple on any valuation measure reflects what investors are willing to pay for a mix of growth potential and risk. Higher expected growth or perceived quality can support a higher multiple. In contrast, more uncertainty or weaker profitability usually points to a lower, more cautious multiple.
Enovix currently trades on a P/B of 5.38x. That sits above the Electrical industry average of 2.70x and a little below the peer group average of 5.96x. Simply Wall St’s Fair Ratio is a proprietary estimate of what P/B might make sense for Enovix given its earnings profile, growth assumptions, profit margins, size and risk factors. This can be more tailored than a simple comparison with industry or peer averages, which do not adjust for company specific characteristics.
Because the Fair Ratio figure for Enovix is not provided here, we cannot reach a firm conclusion using this method alone.
Result: ABOUT RIGHT
P/B ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1427 companies where insiders are betting big on explosive growth.
Upgrade Your Decision Making: Choose your Enovix Narrative
Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives, which are simply your story about a company linked directly to your assumptions about its future revenue, earnings, margins and fair value. On Simply Wall St’s Community page, used by millions of investors, a Narrative lets you connect what you believe about Enovix, such as commercialization progress or industry position, to a financial forecast and then to a fair value estimate that you can compare with the current share price to help you decide whether to buy, hold, or sell. Narratives are easy to set up, update automatically when fresh news or earnings are released, and keep your thesis and numbers in one place so you can quickly see if the story still fits the data. For Enovix, one investor might build a Narrative with a much higher fair value based on assumptions of strong long term adoption, while another might set a lower fair value if they anticipate slower uptake or higher risk.
Do you think there's more to the story for Enovix? Head over to our Community to see what others are saying!
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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