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

Energous Corporation’s (NASDAQ:WATT): Energous Corporation develops wire-free charging solutions. The US$145m market-cap company’s loss lessens since it announced a -US$50.8m bottom-line in the full financial year, compared to the latest trailing-twelve-month loss of -US$48.4m, as it approaches breakeven. As path to profitability is the topic on WATT’s investors mind, I’ve decided to gauge market sentiment. In this article, I will touch on the expectations for WATT’s growth and when analysts expect the company to become profitable.

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See our latest analysis for Energous

WATT is bordering on breakeven, according to the 3 Electrical analysts. They anticipate the company to incur a final loss in 2020, before generating positive profits of US$368m in 2021. So, WATT is predicted to breakeven approximately 2 years from now. What rate will WATT have to grow year-on-year in order to breakeven on this date? Using a line of best fit, I calculated an average annual growth rate of 123%, which is rather optimistic! If this rate turns out to be too aggressive, WATT may become profitable much later than analysts predict.

NasdaqCM:WATT Past and Future Earnings, May 23rd 2019
NasdaqCM:WATT Past and Future Earnings, May 23rd 2019

I’m not going to go through company-specific developments for WATT given that this is a high-level summary, but, keep in mind that generally a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

Before I wrap up, there’s one aspect worth mentioning. WATT has managed its capital prudently, with debt making up 1.0% of equity. This means that WATT has predominantly funded its operations from equity capital,and its low debt obligation reduces the risk around investing in the loss-making company.

Next Steps:

There are too many aspects of WATT to cover in one brief article, but the key fundamentals for the company can all be found in one place – WATT’s company page on Simply Wall St. I’ve also compiled a list of important aspects you should further examine:

  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.