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

Energous Corporation’s (NASDAQ:WATT): Energous Corporation engages in the development of a wire-free charging system. The company’s loss has recently broadened since it announced a -US$49.4m loss in the full financial year, compared to the latest trailing-twelve-month loss of -US$49.6m, moving it further away from 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.

See our latest analysis for Energous

Consensus from the 3 Electrical analysts is WATT is on the verge of breakeven. They anticipate the company to incur a final loss in 2019, before generating positive profits of US$169m in 2020. Therefore, WATT is expected to breakeven roughly 2 years from today. 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 136%, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

NasdaqCM:WATT Past Future Earnings November 21st 18
NasdaqCM:WATT Past Future Earnings November 21st 18

Given this is a high-level overview, I won’t go into details of WATT’s upcoming projects, though, take into account 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 currently has no debt on its balance sheet, which is rare for a loss-making loss-making, growth company, which typically has high debt relative to its equity. This means that WATT has been operating purely on its equity investment and has no debt burden. This aspect reduces the risk around investing in the loss-making company.

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 compiled a list of important aspects you should look at:

  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.

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.