Enovix Corp (ENVX) is gearing up for its third-quarter earnings report on Tuesday, and investors are holding their breath. The stock has skyrocketed by a whopping 60% in the past six months, but the question on everyone’s mind is whether this momentum can be sustained. While Wall Street analysts anticipate a loss of 20 cents per share and revenue of $4.11 million for the quarter, they’re also keeping a close eye on any significant announcements that could shake things up.
One factor that adds a layer of excitement (and potential volatility) to the situation is the high level of short interest in Enovix stock. According to data from Benzinga Pro, the short interest currently sits at a hefty 43.87%. This means a significant number of investors are betting on the stock’s decline. If Enovix delivers positive news, a short squeeze could be on the cards – a scenario where short sellers rush to buy the stock to cover their positions, driving the price even higher.
JPMorgan analyst Bill Peterson, for example, believes that the market will be particularly interested in updates on customer validation, Site Acceptance Testing, and the highly anticipated second smartphone OEM deal. He even suggests that this deal could involve a Chinese manufacturer. While Peterson remains optimistic about Enovix’s long-term prospects, he has adjusted the company’s price target from $18 to $15, citing challenges in the broader tech sector. Despite this, he maintains an Overweight rating, indicating that he remains cautiously optimistic about Enovix’s revenue trajectory from 2025 onwards.
However, not everyone is singing the same tune. While JPMorgan is cautiously optimistic, a closer look at the technical indicators reveals a potentially rough road ahead in the short term. The stock’s current price of $10.41 is below its five, 20, and 50-day exponential moving averages (EMAs), suggesting some selling pressure. The 50-day simple moving average (SMA) sits at $10.05, hinting at some bullish potential, but the bearish signals from the eight-day, 20-day, and 200-day SMAs suggest a tug-of-war between short-term bears and a glimmer of long-term hope.
The Moving Average Convergence Divergence (MACD) indicator currently sits in bullish territory at 0.22, while the Relative Strength Index (RSI) at 46.31 indicates a neutral position for the stock.
Ultimately, the fundamental and analyst outlook remains positive, but the technical indicators suggest a potential bumpy ride in the short term. All eyes will be on Tuesday’s earnings call, where investors will be waiting with bated breath to see if Enovix can deliver the kind of news that ignites a short squeeze or if the bears will have their day. One thing is for sure – Enovix stock is set for a volatile week, so buckle up for the ride.
