Last year was dramatic for the Novonix Ltd (ASX: NVX) share price, to say the least.
The battery materials and technology stock plummeted 84% over the 12 months ending 31 December 2022.
After closing 2021 at $9.19, it was swapping hands for just $1.47 by the end of last year.
For comparison, the S&P/ASX 200 Index (ASX: XJO) dumped around 5.5% in 2022.
So, what went wrong for the Novonix share price last year, and can the stock pick drag itself up by the bootstraps in 2023?
Image source: Getty Images
The Novonix share price dived 84% over 2022
Last year was an interesting time for Novonix. The stock entered the year trading near its all-time high after soaring nearly 650% in 2021.
Soon after the year began, it announced plans to list on the Nasdaq, which it achieved in February. Co-founder and CEO Dr Chris Burns commented at the time:
Our Nasdaq listing is a perfect way to begin 2022, and continues our momentum from the previous year … this listing furthers our long-term goal of onshoring the [electric vehicle] supply chain in North America and becoming a leader in the electrification economy.
Speaking of, the company announced a supply agreement with KORE Power, set to begin in 2024, and a US$150 million government grant to help fund its anode materials division's expansion last year.
Of course, all that sounds positive. What could possibly have led to the Novonix share price's 84% dive?
Well, that might have something to do with deepening losses and rising interest rates.
Could this be what went wrong?
Novonix's financial year 2022 earnings contained both good and bad news.
The good news: its revenue jumped 61% year-on-year to come in at $8.4 million. The bad: it posted a $71.4 million loss, down from the prior year's $18 million loss.
While its books still held a decent amount of cash, rising interest rates might have led market watchers to shy away from the unprofitable stock amid the costly debt environment.
It likely didn't help that the company's auditors flagged concerns about its ability to continue operating without raising cash to fund its expansion.
It's also worth noting ASX 200 tech shares broadly suffered in 2022. The S&P/ASX 200 Information Technology Index (ASX: XIJ) tumbled 34% last year.
Will 2023 be a better year for Novonix shares?
While it's impossible to predict what this year might bring the embattled former tech-favourite, one broker is optimistic.
Morgans has slapped Novonix shares with a speculative buy rating and a $3.11 price target, my Fool colleague James reports. That marks a potential 97% upside on its current price.
The broker said:
[Novonix] offers ASX investors an opportunity to get direct exposure to the North American battery market.
