Chardan's Jay Srivatsa: Energous Corp Still Has Upside

In a report issued Tuesday, Chardan’s Managing Director Jay Srivatsa looks into Energous Corp WATT, after the company announced its second quarter financial results, which came in above estimates on Monday morning. Following the call, the firm reiterates a Buy rating and 12 month price target of $12.00 on the stock.

Highlights From The Call

The note highlights a few announcements and figures from the call.

• The company had an agreement with a Tier 1 consumer electronics company (still unknown, but supposedly LG Electronics or Samsung), to embed its wire free charging receiver technology, WattUp, into several consumer electronics products. In the call, management revealed this contract was expanded to include WattUp transmitter technology, “which paves the path to creating the wire free charging eco-system.” Chardan thinks this could be interpreted as an endorsement from the consumer electronics company, as Energous continues to develop both sides of the wireless charging system. In addition, they believe this speeds up the regulatory approvals and overall commercial development cycle for WattUp.
• “Third generation ASICs represents progress toward working silicon available for commercial use.” Srivatsa notes this progress evidences the company’s technical capability, which he believe, is central to “succeeding with a nascent technology in an emerging but as yet unproven market.”
• The firm expects to see additional licensing deals with top tier consumer electronics companies in the second half of the fiscal year. The analyst explains that, on top of working with the aforementioned Tier 1 customer, Energous “is actively engaged with 16 other companies in joint development and expects to sign and announce additional licensing development deals in the second half of this year.”
• “With critical IP protected by patents and more patents to be filed in the coming months combined with limited competitive threats,” Chardan thinks Energous is poised to move from the current contact-based approach to wireless charging into a real wireless solution.