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

Simply Wall St

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Energous Corporation's (NASDAQ:WATT): Energous Corporation develops wire-free charging solutions. The US$159m 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. The most pressing concern for investors is WATT’s path to profitability – when will it breakeven? I’ve put together a brief outline of industry analyst expectations for WATT, its year of breakeven and its implied growth rate.

Check out our latest analysis for Energous

WATT is bordering on breakeven, according to the 4 Electrical analysts. They anticipate the company to incur a final loss in 2020, before generating positive profits of US$368m in 2021. Therefore, WATT is expected to breakeven roughly 2 years 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 125% is expected, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.

NasdaqCM:WATT Past and Future Earnings, May 10th 2019

Underlying developments driving WATT’s growth isn’t the focus of this broad overview, but, take into account that by and large a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

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 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 relevant 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.

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.