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Shares of Ocean Power Technologies (OPTT - Free Report) gained over 75% in morning trading Tuesday following the company’s new product deployment and most recent earnings announcement. The stock has been on an insane run as of late, and shares of the company are up over 500% on the year.
Before we look at what is causing Ocean Power Technologies to climb at such a ridiculous rate, we first need to understand what exactly it does. Not all investors will be familiar with this relatively small up-and-comer.
What They Do
Ocean Power Technologies is a New Jersey-based renewable energy company that provides power generation devices and services based on extracting energy from ocean waves. The company’s main product is the PowerBuoy, a floating generator that harnesses the ocean’s energy and convert’s it to electrical power.
Ocean Power’s big sticking points are autonomous power and reliable communications. The overall “point” of its PowerBuoy is that it can be deployed and continue to operate with very little maintenance from actual people.
The PowerBuoy technology has several commercial applications and Ocean Power markets its energy to the ocean observation, oil, defense, and offshore wind farming industries. The company currently has six ongoing projects and has completed three.
Check out this company video to better visualize what the PowerBuoy system looks like:
As you can see, Ocean Power Technologies can implement a variety of different systems, ranging in shape and size, for a diverse set of applications.
Why it’s Soaring
The main reason the stock has been soaring is that Ocean Power is currently transitioning to a more commercial focus. Until now, the company has been committed to developing and perfecting its technology, and now it seems it is ready to be sold to the world.
For example, in its most recent earnings report, Ocean Power announced that it saw revenues of just $0.7 million in fiscal 2016, down from about $4 million in the year before. The company defended its lack of revenue, saying: “The decrease in revenues is consistent with our strategic pivot refocusing our product development efforts on autonomous PowerBuoys and our deliberate decision to transition toward commercial revenues.”
The company also recently announced its newest product deployment, which is a major step in its plan to commercialize the business. Last week, Ocean Power released its first and second PB3 PowerBuoy approximately four miles off of the coast of New Jersey.
“This deployment of our PB3 represents what we expect will be the final validation step prior to release of the product to our target customers and markets… As per our previously announced plan, this deployment represents a major milestone in our commercialization strategy enabling us to put our product in the hands of our customers. I am very proud of this critical company achievement,” said Ocean Power CEO George H. Kirby.
Bottom Line
Ocean Power Technologies is an innovative company with an amazing idea about transforming our ocean’s waves into useable energy. The stock is soaring because we are now seeing that amazing idea transform into an actual business with a real product. Now that Ocean Power is ready to start marketing its new PowerBuoy to its intended customers, the company could be in for some serious revenue.
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What Is Ocean Power Technologies (OPTT)?
Shares of Ocean Power Technologies (OPTT - Free Report) gained over 75% in morning trading Tuesday following the company’s new product deployment and most recent earnings announcement. The stock has been on an insane run as of late, and shares of the company are up over 500% on the year.
Before we look at what is causing Ocean Power Technologies to climb at such a ridiculous rate, we first need to understand what exactly it does. Not all investors will be familiar with this relatively small up-and-comer.
What They Do
Ocean Power Technologies is a New Jersey-based renewable energy company that provides power generation devices and services based on extracting energy from ocean waves. The company’s main product is the PowerBuoy, a floating generator that harnesses the ocean’s energy and convert’s it to electrical power.
Ocean Power’s big sticking points are autonomous power and reliable communications. The overall “point” of its PowerBuoy is that it can be deployed and continue to operate with very little maintenance from actual people.
The PowerBuoy technology has several commercial applications and Ocean Power markets its energy to the ocean observation, oil, defense, and offshore wind farming industries. The company currently has six ongoing projects and has completed three.
Check out this company video to better visualize what the PowerBuoy system looks like:
As you can see, Ocean Power Technologies can implement a variety of different systems, ranging in shape and size, for a diverse set of applications.
Why it’s Soaring
The main reason the stock has been soaring is that Ocean Power is currently transitioning to a more commercial focus. Until now, the company has been committed to developing and perfecting its technology, and now it seems it is ready to be sold to the world.
For example, in its most recent earnings report, Ocean Power announced that it saw revenues of just $0.7 million in fiscal 2016, down from about $4 million in the year before. The company defended its lack of revenue, saying: “The decrease in revenues is consistent with our strategic pivot refocusing our product development efforts on autonomous PowerBuoys and our deliberate decision to transition toward commercial revenues.”
The company also recently announced its newest product deployment, which is a major step in its plan to commercialize the business. Last week, Ocean Power released its first and second PB3 PowerBuoy approximately four miles off of the coast of New Jersey.
“This deployment of our PB3 represents what we expect will be the final validation step prior to release of the product to our target customers and markets… As per our previously announced plan, this deployment represents a major milestone in our commercialization strategy enabling us to put our product in the hands of our customers. I am very proud of this critical company achievement,” said Ocean Power CEO George H. Kirby.
Bottom Line
Ocean Power Technologies is an innovative company with an amazing idea about transforming our ocean’s waves into useable energy. The stock is soaring because we are now seeing that amazing idea transform into an actual business with a real product. Now that Ocean Power is ready to start marketing its new PowerBuoy to its intended customers, the company could be in for some serious revenue.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>