Why was FY22 a rollercoaster period for the Novonix share price?

The battery technology stock recorded a high of $12.47 and a low of $2.07 in FY22.

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People sit in rollercoaster seats with expressions of fear, terror and exhilaration as it goes into a steep downward descent representing the Novonix share price in FY22

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Key points

  • The Novonix share price recorded notable gains for much of the first half of FY22 before handing most of them back in the second half
  • At the end of FY22, Novonix shares were trading just 2.7% higher than they were at the final close of FY21
  • It appears that sentiment for battery stocks drove the company's shares higher initially, while broader weakness in the tech sector saw them plunge later on

Financial year 2022 (FY22) was a rollercoaster for the share price of battery technology and materials favourite Novonix Ltd (ASX: NVX).

The stock ended FY21 at $2.22 before leaping to a 52-week high of $12.47 in December – representing a whopping 462% gain.

Sadly, however, that surge didn’t hold. As of the final close of FY22, the Novonix share price was trading for $2.28 – just 2.7% higher than it was 12 months prior.

For context, the S&P/ASX 200 Index (ASX: XJO) fell around 10% over the period.

So, what drove the Novonix share price dramatically higher in FY22 and why did it all go wrong? Let’s take a look.

What drove the Novonix share price in FY22?

The Novonix share price seemingly rode a wave of positive sentiment for battery technology stocks in 2021 before suffering through notable tech sell-offs in 2022.

Here are the major events that drove the now-ASX 200 tech stock last financial year.

The good

The Novonix share price lifted more than 400% between the start of FY22 and the end of November 2021.

Its early rise appeared to be sparked by news that energy giant Phillips 66 was snapping up a 16% stake in the ASX tech stock for US$150 million.

The company was also added to the S&P/ASX 300 Index (ASX: XKO) in September before taking its place on the ASX 200 in the December rebalance.

However, the battery-focused company’s rise was soon to turn sour. December brought the stock’s worst day of the past 12 months.

The bad

The Novonix share price tumbled 32% on 3 December despite the company’s silence. In fact, it halted trading that afternoon while it penned a response to a ‘please explain’ from the ASX.

Another dull day for the stock came when it was listed on the NASDAQ index. The company’s stock tumbled nearly 15% following its debut on the US market in early February.

Meanwhile, the broader tech sector suffered a shocking turnaround in the first few months of 2022 as bond yields rose and inflation reigned.

That inevitably weighed on Novonix. As did similar macroeconomic pressures towards the end of FY22.

And the earnings

Finally, let’s take a quick look at the earnings that helped drive the Novonix share price last financial year.

The company dropped its results for FY21 in late August 2021. It posted a 22.9% improvement in revenue, which reached $5.2 million, and a before-tax loss of $18 million for the period.

The first half of FY22 saw further improvements, with the company bringing in $4 million of revenue – a 72% increase on that of the prior comparable period. Though, its after-tax losses deepened to $28.8 million.

Motley Fool contributor Brooke Cooper 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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