03:12 PM EDT, 08/26/2024 (MT Newswires) -- Enovix's ( ENVX ) expansion of Fab 2, its high-volume battery manufacturing facility in Malaysia, points to self-funded growth, leveraging its technology for high-power edge devices even as power consumption increases, Oppenheimer said in a note Monday.

"While we expect processing technology to drive significant efficiency gains, we expect device power usage to outpace those improvements. Given the constraints of smartphone form factors, we believe [Enovix's ( ENVX )] [15% to 30%] volumetric energy density will allow for market share gains at comparable pricing and likely a premium to current batteries," Oppenheimer said.

The $12 billion to $20 billion smartphone battery market, growing 1% to 3% annually with 1.6 billion units sold each year, offers a strong opportunity for the company, Oppenheimer said, adding that Enovix ( ENVX ) needs just 1.4% market share to break even and 2.2% to self-fund growth.

With $60 million per line in capital expenditures, the company can produce around 11.5 million units annually, generating $150 million in revenue and 50% cash margins. Oppenheimer said the company can reach cash break-even with two manufacturing lines and self-fund expansion with three.

Oppenheimer has an outperform rating on Enovix ( ENVX ) with a price target of $36.

Price: 10.42, Change: -0.15, Percent Change: -1.42