FCC Nod Charges Up Energous Corp (NASDAQ: WATT) Stock Price By 168%


“A widely anticipated ground breaking –history-making milestone.”

That’s how Stephen R. Rizzone, CEO, President and Director, Energous Corp (NASDAQ: WATT) described the pending FCC certification of the first power-at-a-distance transmitter on the company’s last earnings call in November.

“The importance of this certification to our industry cannot be overstated, as it will demonstrate that RF-based wireless charging can safely provide the consumer with the freedom and utility to charge devices without the need to place them on a mat or pad,” he added.

Well, it’s happened.

Energous said yesterday that the FCC had certified its first-generation WattUp Mid Field transmitter, which sends focused, RF-based power to devices at a distance.

“This ground-breaking technology allows users to automatically charge their WattUp-enabled devices without having to remove them from their wrist or pocket, plug them in or place them on a mat to charge, freeing them from ever having to think about charging their devices again,” said Martin Cooper, Energous Board of Directors member and ‘Father of the Cell Phone.’

Energous Corp (NASDAQ: WATT) Shares Soar

The development sent the company’s shares flying, closing Wednesday at $23.70, up 168%.

The stock had been trundling lower over the past few months on account of the continuing delay in obtaining the FCC clearance. It didn’t help that Apple announced September its iPhone 8, iPhone 8 Plus and iPhone X phones would use the rival “Qi” wireless charging standard.

Be that as it may, the FCC green light has propelled the stock to an all-time high, with the claims (and the confidence) of the company vindicated.

Investors in the company’s March 2014 IPO, who received shares at $6 each, have been well rewarded, as shares have gained 295% from that price.

Energous Corp (NASDAQ: WATT): The Road Ahead

In October, Energous started shipping qualified silicon chips to certain customers, generating revenue, though small at this stage. These customers, one of which is Myant, a leading developer of textile computing platform and a signature line of smart apparel, are using WattUp near-field transmitters and integrated receivers based on already FCC-approved basic WattUp near field reference design. According to the company, though the revenue impact of these shipments is very small, they mark a significant step in its transition from a development company to a commercially operating one.

However, Energous is hoping to significantly boost its revenues by the second half of 2018, which it calls a revenue inflection point. Two new unnamed partners, both of which are top-tier consumer companies with high volumes and a worldwide presence, are expected to make that possible. One of these is a global top-10 consumer electronic company. Energous is scheduling to launch shipments to these two partners in the latter part of 2018.

Energous also has a licensing agreement with Apple power-chip supplier Dialog Semiconductor that could be instrumental towards commercialization of its FCC-approved technology for which Dialog is the exclusive global supplier. “Dialog provides early adopters with the assurance of chip supply and support that comes from a top tier semiconductor company that ships millions of chips each month into some of the world’s most demanding customers,” said Mark Tyndall, its senior vice president for corporate development and strategy.

Energous currently has a focus on generating revenue out of only the top-tier companies from the Dialog portfolio of customers, claiming that it has “more companies interested in the WattUp technology than we can support.”

In 2019, Energous is expecting revenue streams from a number of top tier customers of Dialog who have been introduced to WattUp technology.

Energous Corp (NASDAQ: WATT): To Invest or Not

The FCC approval is a huge boost, and increases manifold the chances of the company achieving commercial production and profitable revenues in the next couple of years. But the technology still needs widespread adoption: will the consumer electronic biggies really bite the bullet?

The jury may be out on that one, but it is not a bad idea to accumulate this stock in small lots at every decline to lower the risk but nevertheless keep a foot in the door.