Amprius Technologies amps the market and enters a reversal

Key Points

• Amprius Technologies opened its Amprius Labs Facility, expanding capacity by 10X. 
• Analysts forecast revenue to grow by 100% in 2024 and are likely cautious in their estimates. 
• The lowest price target for the stock is 100% above recent action providing a tempting target for investors. 

Amprius Technologies NYSE: AMPX stock price action over the past year or so is not surprising. It is an early-stage tech start-up whose IPO left little meat on the bone for new investors. However, unlike most tech start-ups, this one has a viable, market-disrupting technology that is increasingly in demand. Amprius Technologies makes an advanced lithium-ion EV battery with a silicon nanowire anode that provides double the energy density of standard batteries with high discharge rates. 

These batteries are well-suited to all EV transportation, including air transportation, which has maxed out the company’s production. Customers like Airbus EPA: AIR and AeroVironment NASDAQ: AVAV use the batteries to advance their eVTOL and drone technology and can account for nearly 100% of the company’s current production. That’s why it expanded its Freemont facility and is working on a gigafactory in Colorado.

Amprius shares surge more than 40% after Fremont grand opening 

Amprius Technologies shares soared as much as 60% the week after Christmas. This is no ordinary Santa Claus Rally due to the timing of the Fremont, California, grand opening the week before. The grand opening expands production by 10X and is a significant milestone on the path to gigawatt-hour production capacity. The company expects its gigafactory to be operational in 2025, putting it on a solid trajectory for hyper-growth. 

Among the highlights of the event are presentations by Amprius clients. Airbus and AeroVironment provided their seal of approval, aiding the company in establishing credibility within the marketplace. Takeaways from the presentations include the importance of Amprius Technologies batteries to all aspects of aviation, including high-altitude and defense. Teledyne FLIR NASDAQ: FLIR demonstrated its Black Hornet 4, an advanced personal-sized drone used to aid situational awareness for soldiers. It features extended range and advanced imaging technologies reliant on Amprius batteries' density and discharge rates. 

Amprius is in a hyper-growth phase; 2024 estimates are too low

Amprius's Q3 results were impressive, with its first ramp in battery production delivering 240% YOY revenue growth. Growth is expected to accelerate in Q4 to 270% and may easily exceed that figure if the company can make the units. Growth is expected to slow to about 100% in fiscal 2024, at the consensus estimate in early January, but there are two things to consider. The first is that Amprius Labs' opening expands production capacity by 10X in a world where existing customers had already maxed them out. 

Existing demand is compounded by a growing backlog of new clients ramping production and use. Among them are a “premier eVTOL” manufacturer, Amprius Technologies words, which may be Archer Aviation NASDAQ: ACHR or Joby Aviation NYSE: JOBY, as well as Prismatic LTD. Prismatic LTD develops and deploys an ultra-high altitude solar-powered platform reliant on batteries and is only one niche player in the broader EV aviation arena. Because demand for Amprius batteries is so broad, ramping production at a brisk pace, and having a deep moat with its technology, it should easily outpace the consensus for next year. 

Analysts have a robust outlook for Amprius Technologies

Amprius doesn’t have dozens of analysts tracking it, but there are enough with current research to impact the price action. The six tracked by Marketbeat.com rate the stock a consensus Moderate Buy, with several analysts initiating in December 2023. The consensus price is about 120% above the recent price action, and the low target, which matters most today, is about double. Assuming the analysts stand firm and keep the low end of the range where it is, this market could easily double in the next few months. 

The chart shows a textbook Head & Shoulders bottom and reversal confirmed by the post-grand opening price surge. The market closed with a 40% gain, creating a solid green candle breaking above the pattern’s neckline. The move is backed up by strong indicators that leave ample room for the market to run. Stochastic, specifically, shows a strong technical buy signal with its bullish crossovers converging with the pattern low and break-out point. Assuming the market follows through on the signal, it could advance anywhere from $2.75 to 100%.