7/30/2023 0 Comments Watt yahoo finance news![]() We aim to bring you long-term focused analysis driven by fundamental data. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. This article by Simply Wall St is general in nature. Alternatively, email editorial-team (at). Have feedback on this article? Concerned about the content? Get in touch with us directly. ![]() If you would prefer to check out another company with better fundamentals, then do not miss this free list of interesting companies, that have HIGH return on equity and low debt or this list of stocks which are all forecast to grow. On another note, we conducted an in-depth investigation of the company, and identified 5 warning signs for Energous (3 don't sit too well with us!) that you should be aware of before investing here. Looking at the factors mentioned in this short report, we do think that its cash burn is a bit risky, and it does make us slightly nervous about the stock. While its cash runway wasn't too bad, its cash burn relative to its market cap does leave us rather nervous. Is Energous' Cash Burn A Worry?Įnergous is not in a great position when it comes to its cash burn situation. That's fairly notable cash burn, so if the company had to sell shares to cover the cost of another year's operations, shareholders would suffer some costly dilution. Since it has a market capitalisation of US$87m, Energous' US$28m in cash burn equates to about 33% of its market value. The image below shows how its cash balance has been changing over the last few years. To be frank, this kind of short runway puts us on edge, as it indicates the company must reduce its cash burn significantly, or else raise cash imminently. That means it had a cash runway of around 12 months as of September 2021. Importantly, its cash burn was US$28m over the trailing twelve months. ![]() As at September 2021, Energous had cash of US$28m and no debt. See our latest analysis for Energous When Might Energous Run Out Of Money?Ī company's cash runway is calculated by dividing its cash hoard by its cash burn. We'll start by comparing its cash burn with its cash reserves in order to calculate its cash runway. In this article, we define cash burn as its annual (negative) free cash flow, which is the amount of money a company spends each year to fund its growth. So, the natural question for Energous ( NASDAQ:WATT) shareholders is whether they should be concerned by its rate of cash burn. Having said that, unprofitable companies are risky because they could potentially burn through all their cash and become distressed. For example, biotech and mining exploration companies often lose money for years before finding success with a new treatment or mineral discovery. We can readily understand why investors are attracted to unprofitable companies.
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