Are investors losing faith in Novonix shares?

Oh how the mighty have fallen. That might be the sentiment that comes to mind when checking out the Novonix Ltd (ASX: NVX) share price of late.

Novonix shares used to be something of a market darling. This ASX battery company was all the rage last year and going into 2022. 2021 saw the Novonix share price gain a whopping 659.5%, rising from $1.21 a share all the way up to $9.19.

It also hit an even higher record of $12.47 in November 2021. But alas, it was not to last. Today, the Novonix share price has closed at $2.50 a share.

That represents a year-to-date loss of 76.2% and a 12-month loss of 74.6%. Since Novonix’s all-time high of $12.47, the shares have now gone backwards by 80%. Ouch.

It could be worse though. It was only last month that Novonix shares hit a new 52-week low of $1.66. The shares are actually up a very pleasing 50.6% since Novonix hit that low only a few weeks ago.

So are ASX investors losing faith in Novonix shares?

Well, they have certainly got more faith in the company today than they did last month. But there’s no doubt that Novonix is still a bit on the nose with investors if its price action over the past year is anything to go by.

There’s little doubt that rising interest rates have hurt the Novonix share price in 2022. Unprofitable companies are usually hit hardest by rising rates, and Novonix, unfortunately, falls into this category. With interest rates rising almost monthly over 2022 thus far, Novonix has certainly felt the pain there.

Matters were not helped last month with the release of Novonix’s first-quarter update for FY2023. This revealed that the company had burned through $25.3 million over the three months to 30 September 2022.

But last month, new Novonix chair Robert Natter also said this:

As a Board and management team, we cannot control the share price. What we can control are the decisions we take to ensure we have a sound strategy and that management is executing that strategy to deliver on our long term goals.

If we continue to deliver against our key operating milestones, the share price will respond appropriately.

No doubt investors are hoping the company can live up to its end of this deal.

The post Are investors losing faith in Novonix shares? appeared first on The Motley Fool Australia.

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More reading

• Why is the Novonix share price surging 10% on Friday?
• What’s boosting the Novonix share price on Wednesday?
• Why are Novonix shares listed on the Nasdaq as well as the ASX?
• Why did the Novonix share price jump 50% in October?
• Why is the Novonix share price gaining today?

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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