Market News

Ocean Power Tech Updates 1 Key Risk Factor

Ocean Power Technologies, Inc. (OPTT) provides marine power, data, and service solutions. OPTT recently reported robust top-line growth for the second quarter. Driven by growth in strategic consulting services, revenue increased to $247,000 from $118,000 in the comparable year-ago period.

Higher engineering and product development costs coupled with increased selling, general and administrative (SG&A) expenses widened the net loss of the company to $5.2 million from $3 million a year ago.

Furthermore, OPTT has entered into strategic partnerships with Greensea and Fathom5, developers of software and robotics, to advance its proprietary next-generation Maritime Domain Awareness Solution (MDA) platform.

With these developments in mind, let us take a look at the changes in OPTT’s key risk factors that investors should know.

Risk Factors

According to the TipRanks Risk Factors tool, Ocean Power’s top risk category is Finance & Corporate, contributing 24% to the total 41 risks identified.

Compared to a sector average Finance & Corporate risk factor of 36%, OPTT’s is at 24%. In its recent quarterly report, the company has changed one key risk factor under the Finance & Corporate risk category.

OPTT acknowledged that it has a history of operating losses, and may not gain or maintain profitability and positive cash flow in the future. At the end of October, OPTT had an accumulated deficit of $243.2 million.

Until now, OPTT’s losses have been a result of costs incurred for research and development (R&D) programs and SG&A expenses. The company conceded that there remains substantial uncertainty regarding its ability to achieve successful commercialization of its products and solutions in its target markets. Even after achieving profitability, it may not be able to sustain it on a quarterly or annual timeframe.

Blogger Opinions

According to TipRanks data points, financial blogger opinions are 100% Bullish on Ocean Power Technologies, compared to the sector average of 65%.

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