UPDATE: Ascendiant Capital Initiates Coverage on Ocean Power Technologies with Strong Buy Rating, $5 PT on Significant Undervalue

In a report published Thursday, Ascendiant Capital analyst George Santana initiated coverage on Ocean Power Technologies OPTT with a Strong Buy rating and $5.00 price target. In the report, Santana noted, “The company is currently valued at a negative Enterprise Value. In our view, this significantly undervalues the years and dollars invested in developing this pioneering technology which continues to approach commercial viability. Even if we give the company no credit for its net cash position (currently $2.18 per share), we believe a larger company might offer at least $50 million for the intellectual property and engineering know-how. This yields a valuation of roughly $5 per share. While it is likely the company may need to raise additional capital, cash burn is $3-4 million per quarter, versus net cash of over $22 million, meaning the company should not be at risk of running out of cash in the near term.” Ocean Power Technologies closed on Wednesday at $1.51.