Some thoughts on general fundamentals that apply to all graphite stocks(I know many of us don't just own NVX, there's 3-4 good picks on the ASX. I only own a trivial amount of NVX but I'd like to offer my 5c.).All indicators are showing the need for battery-grade graphite is going up by a factor of at least 5x-10x by 2030. Companies (especially in Europe and America) are very outspoken about how much they're planning to invest in this space. Battery manufacturers are building giga-factories and they are planning to spend Billions per year on this stuff. That's not billions for their whole operation, that's billions per year on graphite materials alone. When you see things like that its easy to be confident that this isn't some pump and dump commodity. The demand for graphite is very real, and the right companies will profit substantially.
Additionally, the opportunity in this space is especially appealing because the west is trying to to decouple from China, who currently supplies a significant percentage of the worlds graphite and graphite anode (somebody feel free to fact check me on this if that's not true).
In summary, if we are to believe the forecasts and look at the money being invested into battery manufacturing, then we can say with some certainty that demand for battery-grade graphite materials is going up, period. Demand will also go up as a result of the decoupling from China. Either one of those factors will be good for companies like NVX, both happening at the same time might be eye opening.
Some thoughts on NVX in particular:I can't remember where I saw the numbers, but there's been some fairly conservative revenue estimates for NVX that justify a market cap of 2-3Billion. Based on what they're expecting to sell, based on what customers have indicated they will need. So at the
very least, an SP of $5-8 is very reasonable once the company is actually generating its expected revenue. I'm relatively conservative so this is my estimate, if/when the SP gets there I will re-assess.
@por77w said it better than me.
My heart goes out to the current bagholders too. I sympathize but I do think the market absolutely got carried away when the price made it to $10+. No arguments there. Goes to show that the reason
why the SP grows is so important. The dust has settled, the SP is stable again, and we're still investing for the same reasons we were before. The SP dropping hasn't degraded the investment thesis (because IMO it never made sense for the SP to get so high anyway) and if anything the investment thesis has actually become stronger.
The prediction of a $1 SP has logic to it, I can see where you're coming from. That's a market cap of about half a billion, pretty generous for a *mostly* pre-revenue company, and puts NVX on par with some of its peers. But... can't ignore the circumstances. I investors are looking forward, many people won't care about paying $2 or $3 today when they think it might be worth $10 one day. There's the hype too, that is more difficult to quantify, but for as long as hype exists, people will be willing to pay some amount of premium. Put very simply, if you think the fundamentals justify a $1 SP then the "hype premium" is $1.50 as of today. I made up "hype premium" but that's how I like to think of if. The "hype premium" reached $10 per share, so expecting the SP to drop to $1 is like expecting the "hype premium" to reach $0 and for people to stop being excited about this investment, which is unlikely IMO.
(20min delay)