The Novonix Ltd (ASX: NVX) share price had a better week than most other ASX All Ords shares last week. This battery technology company started last week's short week of trading at $1.04 a share. But by Friday's session, Novonix's share price had closed at $1.17. That's a weekly gain of 12.5%.
Yesterday, the Novonix share price gave up some of that impressive winning streak with its loss of 3.43%, leaving the company at $1.125 a share.
But still, we can't ignore the stellar run Novonix went on last week. So would this be a sign that the Novonix share price is finally on the road to recovery? Remember, it was only back in late 2021 that Novonix was asking more than $10 a share, as you can see below:
Image source: Getty Images
Where to next for Novonix shares?
Well, it's hard to say. It seems that investors gave Novonix such a good time last week was the news we got earlier this month that the company had inked an agreement with global battery powerhouse LG Energy Solutions.
As we covered at the time, the two companies agreed to jointly research and develop artificial graphite solutions for lithium batteries.
However, some of Novonix's fundamental issues arguably remain.
Back in April, we looked at why Novonix shares had such a rough time over 2022 and into 2023.
Core concerns for investors are arguably profitability and valuation.
Over FY2022, Novonix brought in $8.4 million in revenue and lost $71.4 million on its bottom line. That's despite its current market capitalisation of $545 million.
In my view, the Novonix share price won't recover its old glories until the company gets to and maintains consistent profitability. Or, at the very least, exponentially grows its revenues from the $8.4 million it brought in over the last financial year.
Until that happens, it's likely that the Novnonix share price remains depressed. As we saw play out yesterday, investors got cold feet over the surge we saw last week and sent the company down 3%. This on a day that saw the All Ordinaries Index (ASX: XAO) gain 0.51%.
Battery agreements with other, larger companies are all well and good. But until there are some solid fundamental numbers to see, I wouldn't be expecting a meaningful Novonix share price recovery.
