Enovix: Sell On Persistent Execution Issues And Diminishing Commercialization Prospects

Henrik AlexInvesting GroupFollow5ShareSavePlay(9min)CommentsSummaryLast week, Enovix reported fourth-quarter results slightly ahead of muted expectations.The company's efforts to enter the smartphone battery market have suffered another setback. New samples recently shipped to prospective lead customer Honor won't pass standard industry life-cycle testing requirements.While management was quick to downplay the issue, it's difficult to see a path forward without making additional chemistry changes, which in turn would require new sample testing with an uncertain outcome.Adding insult to injury, persistent laser dicing issues continue to negatively impact production yields at the company's new fab in Malaysia.Given persistent lack of execution, mounting competitive pressures, and diminishing prospects for a successful commercialization of the company's first-generation battery, I am reiterating my "Sell" rating on Enovix's common shares.Looking for a helping hand in the market? Members of Value Investor's Edge get exclusive ideas and guidance to navigate any climate. Learn More » da-kuk/iStock via Getty Images Note: I have covered Enovix Corporation, or "Enovix" (ENVX), previously, so investors should view this as an update to my earlier articles on the company. Since my last update on aspiring advanced lithium-ion battery manufacturer Enovix, the stock price has declinedThis article was written byHenrik Alex20.9K FollowersFollowI am mostly a trader engaging in both long and short bets intraday and occasionally over the short- to medium term. My historical focus has been mostly on tech stocks but over the past couple of years I have also started broad coverage of the offshore drilling and supply industry as well as the shipping industry in general (tankers, containers, drybulk). In addition, I am having a close eye on the still nascent fuel cell industry.I am located in Germany and have worked quite some time as an auditor for PricewaterhouseCoopers before becoming a daytrader almost 20 years ago. During this time, I managed to successfully maneuver the burst of the dotcom bubble and the aftermath of the world trade center attacks as well as the subprime crisis.Despite not being a native speaker, I always try to deliver high quality research to followers and the entire Seeking Alpha community.Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.