Energous Corporation Stock Forecast

Energous Stock Forecast: Smartphones are a revolutionary invention with one big problem: they never seem to hold enough charge.

According to a survey by J.D. Power and Associates, poor battery life is the single greatest cause of customers’ dissatisfaction with their smartphones. Users are so concerned about the longevity of their phone batteries that half of them turn off Wi-Fi, Bluetooth, and location services when they’re not necessary.

For battery-conscious users who always struggle to find an outlet, there’s a new solution in town: wireless charging. A variety of companies are developing wireless charging solutions: devices shaped like small pucks or mats that can wirelessly transfer energy to a receiver inside the phone using electromagnetic induction.

Energous Corporation [NASDAQ: WATT], however, takes the concept of wireless charging one step further by removing the need for physical contact between the device and the charger. Shares of Energous have had their ups and downs over the past several years, and the stock is currently on a protracted decline. But is this slump projected to continue, or will Energous stock mount a turnaround in the near future?

What Does Energous Corporation Do?

Energous Corporation [NASDAQ: WATT] is a technology firm developing wireless power and wireless charging solutions. In particular, Energous is the creator of WattUp, a wireless charging technology that uses radio frequency to charge compatible devices within a radius of 15 feet.

Energous partners with companies that plan to use the WattUp technology in their own products, such as the collaboration with Chinese smartphone manufacturer Vivo announced in February 2019.

According to Energous, the WattUp transmitter has the potential to eliminate the tangled bundles of wires and power strips that are frequently found near televisions and desktop computers – no cables and no physical contact required. This differentiates WattUp from other wireless chargers that require the device to be touching them.

Founded in 2012, Energous is currently headquartered in San Jose, California. Stephen R. Rizzone has served as the company’s president and CEO since October 2013. Energous’ competitors include companies such as Ossia, uBeam, WiTricity, Spansive, and PowerSquare that are also developing wireless charging solutions. Larger electronics manufacturers such as Broadcom and Renesas have also incorporated wireless chargers into their suite of product offerings.

Is Energous Corporation a Buy?

Energous stock was definitely a buy a few years ago, when good news seemed to keep rolling in.

In December 2017, the company received FCC certification for its first-generation WattUp Mid Field transmitter, the first such certification for a “power-at-a-distance” wireless charger. However, FCC certification for Energous’ first consumer product, the Delight personal sound amplification product, didn’t come until one year later in December 2018. Energous has now secured regulatory approval for WattUp in more than 100 countries.

At that time, Energous Corporation [NASDAQ: WATT] was also signing manufacturing deals with companies like Dialog Semiconductor to produce a wireless charging chip. Since Dialog was a supplier of Apple, there was some speculation that this chip would eventually make its way inside the iPhone.

However, Apple decided to invest in its in-house chip development instead, simultaneously cutting back on its orders from Dialog. Since then, shares of Energous and Apple have seemed to be at odds.

In March 2019, for example, Energous stock rose by 3 percent after Apple announced that it was cancelling its AirPower wireless charging mat for iPhone, AirPods, and Apple Watch.

What are the Risks of Buying Energous Corporation?

Unfortunately, there hasn’t been much good news for Energous investors lately. After an IPO price of $6 in 2014, Energous stock soared into the low $20s in early 2018, but has been gradually declining since then. Shares of Energous now trade below the IPO price.

One reason for this decline: Energous Corporation [NASDAQ: WATT] has not been able to post quarterly results that satisfy investors.

Energous stock dropped by 20 percent in October 2018 after the company reported Q3 2018 revenue of just $228,000, for a net loss of $12.6 million. The company has been forced to sell millions of shares to raise money, with a total net loss of $51 million in 2018.

Despite its valuation of hundreds of millions of dollars, Energous is generating negative profits, with no free cash flow and less than $1 million in annual sales. This is bad news for a company that faces stiff competition in the sector from both smaller businesses and major players like Apple.

Another spot of bad news: Energous founder and CTO Michael Leabman departed the company in January 2018, citing personal reasons and assuming a new role as a contractor.

Energous Corporation Stock Forecast Summary

We believe that the wireless charging market has a great deal of potential for future growth – but investors may want to look beyond Energous for greener pastures.

The company seems to be going nowhere fast at the moment, despite receiving regulatory approval for selling its WattUp technology.

All of Energous’ 2018 revenue came not from product sales, but from payments from its manufacturing partnerships. What’s more, Energous Corporation [NASDAQ: WATT] has not yet been acquired by a larger company, which suggests that many businesses are having the same reservations.

For now, there are simply too many red flags for investors to consider putting their money in Energous stock.

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The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.