When Will Energous Corporation (NASDAQ:WATT) Turn A Profit?

Want to participate in a short research study? Help shape the future of investing tools and receive a $20 prize!

Energous Corporation’s (NASDAQ:WATT): Energous Corporation engages in the development of a wire-free charging system. With the latest financial year loss of -US$49.4m and a trailing-twelve month of -US$49.6m, the US$278m market-cap amplifies its loss by moving further away from its breakeven target. Many investors are wondering the rate at which WATT will turn a profit, with the big question being “when will the company breakeven?” Below I will provide a high-level summary of the industry analysts’ expectations for WATT.

Check out our latest analysis for Energous

WATT is bordering on breakeven, according to the 3 Electrical analysts. They expect the company to post a final loss in 2019, before turning a profit of US$169m in 2020. So, WATT is predicted to breakeven approximately a few months from now. In order to meet this breakeven date, I calculated the rate at which WATT must grow year-on-year. It turns out an average annual growth rate of 126% is expected, which signals high confidence from analysts. If this rate turns out to be too aggressive, WATT may become profitable much later than analysts predict.

NasdaqCM:WATT Past and Future Earnings, February 22nd 2019
NasdaqCM:WATT Past and Future Earnings, February 22nd 2019

Underlying developments driving WATT’s growth isn’t the focus of this broad overview, though, bear in mind that generally a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

One thing I’d like to point out is that WATT has no debt on its balance sheet, which is quite unusual for a cash-burning loss-making, growth company, which typically has high debt relative to its equity. WATT currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.

Next Steps:

There are key fundamentals of WATT which are not covered in this article, but I must stress again that this is merely a basic overview. For a more comprehensive look at WATT, take a look at WATT’s company page on Simply Wall St. I’ve also put together a list of pertinent factors you should further research:

  1. Historical Track Record: What has WATT’s performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
  2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Energous’s board and the CEO’s back ground.
  3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.