Should you sell your Electrovaya stock?

Roth Capital Markets analyst Craig Irwin lowered his price target on Electrovaya to $7.00 from $10.00 on December 11, maintaining a “Buy” rating after fiscal Q4 results came in essentially in line with expectations but fiscal 2026 revenue guidance fell short.

Irwin said the revenue guide represented a notable disconnect from management’s commentary that the company is entering the year with “over $100-million to $125-million in purchase orders,” raising questions around the cadence and timing of deliveries. He also pointed to dilution from Electrovaya’s recent 5.4-million share equity offering as a factor behind the reduced target.

“We would look for improved growth visibility, which may come from new products, before becoming opportunistic on the stock,” he said.

Electrovaya develops and manufactures lithium-ion batteries for electric vehicles, industrial applications and stationary energy storage, with ongoing R&D in solid-state systems. The company operates in Canada and New York, supplying large material-handling customers and expanding into robotics, aviation ground-support equipment, defence and grid-storage markets.

Fiscal Q4 results were broadly consistent with consensus, with revenue of $20.5-million, EPS of $0.05 and Adjusted EBITDA of $3.5-million, compared with expectations of $21.8-million, $0.07 and $4.2-million, respectively. Gross margin of 31.0% improved meaningfully from the 25.8% posted a year earlier, reflecting a favourable mix from industrial customers. Irwin highlighted a jump in backlog to more than $100-million, up from $80-million in the prior quarter, driven by continued strength in material-handling demand from “large retail-focused customers.”

Management described fiscal 2026 as a year in which new products begin contributing more meaningfully. Electrovaya expects stronger revenue traction in robotics, ground-support equipment, stationary storage and defence through recently launched or soon-to-launch platforms. The company has two robotics customers already taking deliveries, with volume expected to scale in the second quarter. A rapid-charging cell for robotics and autonomous systems is in development.

Despite strong backlog and diversification efforts, the company’s fiscal 2026 revenue growth outlook of roughly 30%, implying about $83-million, fell below the $92.2-million consensus expectation. Management indicated that 80% to 85% of next year’s revenue will still come from material-handling customers, with the remainder attributable to emerging verticals.

Irwin lowered his forward estimates to reflect both the weaker guidance and equity dilution and now models fiscal 2026 Adjusted EBITDA of $17.1-million, down from a prior $20.9-million, on revenue of $83-million, previously $95-million. He forecasts a stronger fiscal 2027 as new verticals scale, calling for $40-million in Adjusted EBITDA on revenue of $150-million. His $7 target is based on applying an 8x EV/EBITDA multiple to his fiscal 2027 estimate, down from the 10x previously used.

“While near-term outlook is weak, we believe Electrovaya’s positioning in material handling and growing visibility in new markets will matter more,” Irwin said.

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