Intrinsic value of Energous Corporation - WATT

Previous Close

$4.14

  Intrinsic Value

$0.16

stock screener

  Rating & Target

str. sell

-96%

Previous close

$4.14

 
Intrinsic value

$0.16

 
Up/down potential

-96%

 
Rating

str. sell

We calculate the intrinsic value of WATT stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 0001), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 0.1

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2
   3
   4
   5
   6
   7
   8
   9
   10
   11
   12
   13
   14
   15
   16
   17
   18
   19
   20
   21
   22
   23
   24
   25
   26
   27
   28
   29
   30
   31

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  60.00
  54.50
  49.55
  45.10
  41.09
  37.48
  34.23
  31.31
  28.68
  26.31
  24.18
  22.26
  20.53
  18.98
  17.58
  16.32
  15.19
  14.17
  13.26
  12.43
  11.69
  11.02
  10.42
  9.87
  9.39
  8.95
  8.55
  8.20
  7.88
  7.59
Revenue, $m
  2
  2
  4
  5
  8
  10
  14
  18
  24
  30
  37
  45
  55
  65
  76
  89
  102
  117
  132
  149
  166
  184
  203
  224
  245
  266
  289
  313
  338
  363
Variable operating expenses, $m
  70
  109
  162
  236
  332
  457
  613
  805
  1,036
  1,308
  1,625
  1,986
  2,394
  2,849
  3,349
  3,896
  4,488
  5,124
  5,803
  6,525
  7,287
  8,090
  8,933
  9,815
  10,736
  11,697
  12,698
  13,739
  14,821
  15,946
Fixed operating expenses, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  70
  109
  162
  236
  332
  457
  613
  805
  1,036
  1,308
  1,625
  1,986
  2,394
  2,849
  3,349
  3,896
  4,488
  5,124
  5,803
  6,525
  7,287
  8,090
  8,933
  9,815
  10,736
  11,697
  12,698
  13,739
  14,821
  15,946
Operating income, $m
  -69
  -106
  -159
  -230
  -325
  -446
  -599
  -787
  -1,012
  -1,279
  -1,588
  -1,941
  -2,340
  -2,784
  -3,273
  -3,807
  -4,386
  -5,007
  -5,671
  -6,376
  -7,121
  -7,906
  -8,729
  -9,591
  -10,492
  -11,431
  -12,408
  -13,426
  -14,483
  -15,583
EBITDA, $m
  -68
  -105
  -158
  -229
  -323
  -444
  -595
  -782
  -1,006
  -1,271
  -1,578
  -1,929
  -2,325
  -2,767
  -3,253
  -3,784
  -4,359
  -4,977
  -5,636
  -6,337
  -7,078
  -7,857
  -8,676
  -9,533
  -10,427
  -11,361
  -12,332
  -13,343
  -14,395
  -15,487
Interest expense (income), $m
  0
  0
  0
  0
  1
  1
  1
  2
  3
  3
  4
  6
  7
  9
  11
  13
  15
  17
  20
  23
  26
  29
  33
  36
  40
  44
  48
  52
  57
  61
  66
Earnings before tax, $m
  -69
  -106
  -159
  -231
  -326
  -448
  -601
  -789
  -1,016
  -1,283
  -1,593
  -1,948
  -2,348
  -2,794
  -3,286
  -3,822
  -4,403
  -5,027
  -5,694
  -6,402
  -7,150
  -7,938
  -8,766
  -9,631
  -10,536
  -11,479
  -12,461
  -13,482
  -14,545
  -15,649
Tax expense, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Net income, $m
  -69
  -106
  -159
  -231
  -326
  -448
  -601
  -789
  -1,016
  -1,283
  -1,593
  -1,948
  -2,348
  -2,794
  -3,286
  -3,822
  -4,403
  -5,027
  -5,694
  -6,402
  -7,150
  -7,938
  -8,766
  -9,631
  -10,536
  -11,479
  -12,461
  -13,482
  -14,545
  -15,649

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  9
  14
  21
  30
  42
  58
  78
  102
  131
  166
  206
  251
  303
  360
  424
  493
  568
  648
  734
  826
  922
  1,024
  1,130
  1,242
  1,359
  1,480
  1,607
  1,739
  1,876
  2,018
Adjusted assets (=assets-cash), $m
  9
  14
  21
  30
  42
  58
  78
  102
  131
  166
  206
  251
  303
  360
  424
  493
  568
  648
  734
  826
  922
  1,024
  1,130
  1,242
  1,359
  1,480
  1,607
  1,739
  1,876
  2,018
Revenue / Adjusted assets
  0.222
  0.143
  0.190
  0.167
  0.190
  0.172
  0.179
  0.176
  0.183
  0.181
  0.180
  0.179
  0.182
  0.181
  0.179
  0.181
  0.180
  0.181
  0.180
  0.180
  0.180
  0.180
  0.180
  0.180
  0.180
  0.180
  0.180
  0.180
  0.180
  0.180
Average production assets, $m
  2
  3
  5
  7
  10
  14
  18
  24
  31
  39
  49
  60
  72
  85
  100
  117
  135
  154
  174
  196
  218
  243
  268
  294
  322
  351
  381
  412
  444
  478
Working capital, $m
  -5
  -7
  -11
  -16
  -22
  -31
  -41
  -54
  -70
  -88
  -109
  -134
  -161
  -192
  -226
  -262
  -302
  -345
  -391
  -439
  -491
  -545
  -602
  -661
  -723
  -788
  -855
  -925
  -998
  -1,074
Total debt, $m
  2
  5
  10
  16
  24
  34
  47
  63
  82
  105
  131
  162
  195
  233
  275
  320
  370
  422
  479
  539
  602
  669
  739
  812
  889
  969
  1,052
  1,139
  1,229
  1,322
Total liabilities, $m
  6
  9
  13
  20
  28
  38
  51
  67
  86
  109
  135
  165
  199
  237
  278
  324
  373
  426
  483
  542
  606
  673
  743
  816
  893
  973
  1,056
  1,142
  1,232
  1,326
Total equity, $m
  3
  5
  7
  10
  14
  20
  27
  35
  45
  57
  71
  86
  104
  124
  145
  169
  195
  222
  252
  283
  316
  351
  388
  426
  466
  508
  551
  596
  643
  692
Total liabilities and equity, $m
  9
  14
  20
  30
  42
  58
  78
  102
  131
  166
  206
  251
  303
  361
  423
  493
  568
  648
  735
  825
  922
  1,024
  1,131
  1,242
  1,359
  1,481
  1,607
  1,738
  1,875
  2,018
Debt-to-equity ratio
  0.720
  1.140
  1.400
  1.560
  1.660
  1.730
  1.780
  1.810
  1.830
  1.850
  1.860
  1.870
  1.880
  1.890
  1.890
  1.890
  1.900
  1.900
  1.900
  1.900
  1.900
  1.910
  1.910
  1.910
  1.910
  1.910
  1.910
  1.910
  1.910
  1.910
Adjusted equity ratio
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -69
  -106
  -159
  -231
  -326
  -448
  -601
  -789
  -1,016
  -1,283
  -1,593
  -1,948
  -2,348
  -2,794
  -3,286
  -3,822
  -4,403
  -5,027
  -5,694
  -6,402
  -7,150
  -7,938
  -8,766
  -9,631
  -10,536
  -11,479
  -12,461
  -13,482
  -14,545
  -15,649
Depreciation, amort., depletion, $m
  1
  1
  1
  2
  2
  3
  4
  5
  6
  8
  10
  12
  14
  17
  20
  23
  27
  31
  35
  39
  44
  49
  54
  59
  64
  70
  76
  82
  89
  96
Funds from operations, $m
  -68
  -106
  -158
  -229
  -324
  -445
  -597
  -784
  -1,009
  -1,275
  -1,584
  -1,936
  -2,334
  -2,777
  -3,266
  -3,799
  -4,376
  -4,997
  -5,659
  -6,363
  -7,107
  -7,890
  -8,712
  -9,573
  -10,471
  -11,409
  -12,385
  -13,400
  -14,456
  -15,553
Change in working capital, $m
  -2
  -3
  -4
  -5
  -7
  -8
  -11
  -13
  -16
  -18
  -21
  -24
  -27
  -31
  -34
  -37
  -40
  -43
  -46
  -49
  -51
  -54
  -57
  -59
  -62
  -65
  -67
  -70
  -73
  -76
Cash from operations, $m
  -66
  -103
  -154
  -224
  -317
  -437
  -587
  -771
  -994
  -1,257
  -1,562
  -1,912
  -2,307
  -2,747
  -3,232
  -3,762
  -4,336
  -4,954
  -5,613
  -6,314
  -7,055
  -7,836
  -8,655
  -9,513
  -10,409
  -11,344
  -12,317
  -13,330
  -14,383
  -15,478
Maintenance CAPEX, $m
  0
  0
  -1
  -1
  -1
  -2
  -3
  -4
  -5
  -6
  -8
  -10
  -12
  -14
  -17
  -20
  -23
  -27
  -31
  -35
  -39
  -44
  -49
  -54
  -59
  -64
  -70
  -76
  -82
  -89
New CAPEX, $m
  -1
  -1
  -2
  -2
  -3
  -4
  -5
  -6
  -7
  -8
  -9
  -11
  -12
  -14
  -15
  -16
  -18
  -19
  -20
  -22
  -23
  -24
  -25
  -26
  -28
  -29
  -30
  -31
  -32
  -34
Cash from investing activities, $m
  -1
  -1
  -3
  -3
  -4
  -6
  -8
  -10
  -12
  -14
  -17
  -21
  -24
  -28
  -32
  -36
  -41
  -46
  -51
  -57
  -62
  -68
  -74
  -80
  -87
  -93
  -100
  -107
  -114
  -123
Free cash flow, $m
  -67
  -105
  -157
  -227
  -321
  -442
  -594
  -781
  -1,006
  -1,271
  -1,580
  -1,932
  -2,331
  -2,775
  -3,264
  -3,799
  -4,378
  -5,000
  -5,665
  -6,371
  -7,117
  -7,904
  -8,729
  -9,593
  -10,496
  -11,437
  -12,417
  -13,437
  -14,498
  -15,600
Issuance/(repayment) of debt, $m
  2
  3
  4
  6
  8
  10
  13
  16
  19
  23
  26
  30
  34
  38
  42
  45
  49
  53
  56
  60
  63
  67
  70
  73
  77
  80
  83
  87
  90
  94
Issuance/(repurchase) of shares, $m
  70
  108
  161
  234
  330
  453
  608
  798
  1,026
  1,295
  1,607
  1,964
  2,366
  2,814
  3,307
  3,846
  4,429
  5,055
  5,724
  6,433
  7,184
  7,973
  8,802
  9,670
  10,576
  11,520
  12,504
  13,528
  14,592
  15,698
Cash from financing (excl. dividends), $m  
  72
  111
  165
  240
  338
  463
  621
  814
  1,045
  1,318
  1,633
  1,994
  2,400
  2,852
  3,349
  3,891
  4,478
  5,108
  5,780
  6,493
  7,247
  8,040
  8,872
  9,743
  10,653
  11,600
  12,587
  13,615
  14,682
  15,792
Total cash flow (excl. dividends), $m
  5
  7
  9
  13
  17
  21
  27
  33
  39
  46
  54
  61
  69
  77
  85
  93
  101
  108
  115
  123
  130
  136
  143
  150
  157
  163
  170
  177
  184
  191
Retained Cash Flow (-), $m
  -70
  -108
  -161
  -234
  -330
  -453
  -608
  -798
  -1,026
  -1,295
  -1,607
  -1,964
  -2,366
  -2,814
  -3,307
  -3,846
  -4,429
  -5,055
  -5,724
  -6,433
  -7,184
  -7,973
  -8,802
  -9,670
  -10,576
  -11,520
  -12,504
  -13,528
  -14,592
  -15,698
Prev. year cash balance distribution, $m
  16
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
  -49
  -101
  -152
  -221
  -313
  -432
  -581
  -765
  -986
  -1,249
  -1,553
  -1,902
  -2,297
  -2,737
  -3,222
  -3,753
  -4,328
  -4,947
  -5,608
  -6,311
  -7,054
  -7,837
  -8,659
  -9,520
  -10,419
  -11,357
  -12,334
  -13,351
  -14,408
  -15,507
Discount rate, %
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
  -47
  -93
  -132
  -182
  -243
  -313
  -393
  -478
  -567
  -655
  -738
  -812
  -873
  -919
  -946
  -954
  -942
  -911
  -863
  -802
  -730
  -650
  -568
  -485
  -405
  -331
  -265
  -207
  -157
  -117
Current shareholders' claim on cash, %
  14.1
  2.0
  0.3
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0

Energous Corporation is engaged in developing a technology called WattUp that consists of semiconductor chipsets, software, hardware designs and antennas that can enable radio frequency (RF)-based wire-free charging for electronic devices, providing power at a distance and enabling charging with mobility under software control. Its technology can be utilized in a range of devices, including wearables, Internet of Things (IoT) devices, smartphones, tablets, e-book readers, keyboards, mice, remote controls, rechargeable lights, cylindrical batteries and any other device with similar charging requirements that would otherwise need a battery or a connection to a power outlet. The Company is engaged in developing a solution that charges electronic devices by surrounding them with a contained three-dimensional (3D) RF energy pocket (RF energy pocket). It is also engaged in developing its transmitter technology to mesh, to form a wire-free charging network.

FINANCIAL RATIOS  of  Energous Corporation (WATT)

Valuation Ratios
P/E Ratio -1.8
Price to Sales 84.3
Price to Book 2.9
Price to Tangible Book
Price to Cash Flow -2.6
Price to Free Cash Flow -2.5
Growth Rates
Sales Growth Rate -66.7%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 0%
Cap. Spend. - 3 Yr. Gr. Rate NaN%
Financial Strength
Quick Ratio NaN
Current Ratio 0
LT Debt to Equity 0%
Total Debt to Equity 0%
Interest Coverage 0
Management Effectiveness
Return On Assets -135.3%
Ret/ On Assets - 3 Yr. Avg. -158.1%
Return On Total Capital -158.6%
Ret/ On T. Cap. - 3 Yr. Avg. -197.6%
Return On Equity -158.6%
Return On Equity - 3 Yr. Avg. -201.9%
Asset Turnover 0
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 0%
EBITDA Margin -4500%
EBITDA Margin - 3 Yr. Avg. -1800%
Operating Margin -4600%
Oper. Margin - 3 Yr. Avg. -1833.3%
Pre-Tax Margin -4600%
Pre-Tax Margin - 3 Yr. Avg. -1844.4%
Net Profit Margin -4600%
Net Profit Margin - 3 Yr. Avg. -1844.4%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 0%
Payout Ratio 0%

WATT stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the WATT stock intrinsic value calculation we used $1 million for the last fiscal year's total revenue generated by Energous Corporation. The default revenue input number comes from 0001 income statement of Energous Corporation. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our WATT stock valuation model: a) initial revenue growth rate of 60% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.3%, whose default value for WATT is calculated based on our internal credit rating of Energous Corporation, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Energous Corporation.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of WATT stock the variable cost ratio is equal to 4400%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for WATT stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 5.4% for Energous Corporation.

Corporate tax rate of 27% is the nominal tax rate for Energous Corporation. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the WATT stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for WATT are equal to 131.6%.

Life of production assets of 1.2 years is the average useful life of capital assets used in Energous Corporation operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for WATT is equal to -295.7%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $18.370435 million for Energous Corporation - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 26.684 million for Energous Corporation is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Energous Corporation at the current share price and the inputted number of shares is $0.1 billion.

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