When smaller companies expand relationships with industry titans, investors usually sit up and take notice. That's exactly what's playing out this week with small-cap stock Electrovaya (ELVA 0.31%) after the battery company announced a landmark deal with Amazon (AMZN 0.46%).
According to data provided by S&P Global Market Intelligence, shares of Electrovaya are up 36.4% from the end of last Friday's trading session through yesterday's close.
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A powerful new partnership
On Wednesday, Electrovaya announced a commercial agreement and a warrant transaction with Amazon regarding its Infinity Battery Technology, lithium-ion batteries designed for industrial applications such as material-handling operations. In addition, the agreement addresses the potential for future purchases of robotics and energy storage equipment.
NASDAQ: ELVA
Key Data Points
Once Amazon achieves $280 million in cumulative future purchases, it will receive warrants to purchase up to 13,880,345 common shares of Electrovaya, which become fully vested upon. Upon execution of the agreement, Amazon will receive a portion of the warrants, which will vest immediately.
The $280 million in potential future purchases is notable for Electrovaya, which reported revenue of $63.8 million in fiscal 2025 and $44.6 million in fiscal 2024.
Recognizing the Amazon agreement as a major step for Electrovaya, Raymond James analyst Daniel Magder boosted his price target on Electrovaya stock to $22 from $14 and maintained a strong buy rating.
Is now the time to charge your portfolio with Electrovaya stock?
Trading at 6.3 times sales, Electrovaya's stock is priced at a premium to its five-year average sales multiple of 3.5, so investors looking for bargain opportunities will have to look elsewhere. For those who are comfortable with the price tag,
Electrovaya stock may be an interesting opportunity now. However, those uninterested in paying a premium or those with lower risk tolerances -- Electrovaya doesn't have a long record of profitability -- may prefer a lithium and battery ETF to gain industry exposure.
