Should You Add Ocean Power Technologies Stock to Your Portfolio?

imageStock Markets20 minutes ago (Jul 06, 2021 12:30PM ET)

(C) Reuters. Should You Add Ocean Power Technologies Stock to Your Portfolio?

The growing momentum behind the global push for carbon neutrality and a renewable energy transition is favorable for renewable energy company Ocean Power Technologies (OPTT). However, the challenges related to higher installation and scalability costs of the emerging ocean energy systems market make OPTT’s growth prospects gloomy. So, given that the company’s financials look bleak, the question is, will the stock be able to recover, or will it decline soon? Read ahead to learn more.Wave-energy-based renewable company Ocean Power Technologies, Inc. (OPTT) offers proprietary systems, such as its PB3 PowerBuoy system, that generate power by harnessing the energy of ocean waves, in the United States and internationally. OPTT’s stock has gained 322.3% over the past year on growing investor optimism about the clean energy sector’s prospects.

Closing yesterday’s trading session at $2.96, OPTT’s stock is trading 33.8% below its $7.30 all-time high, which it hit on January 25. While the stock has gained 23.9% over the past month, it has lost 4.5% over the past three months.

Pandemic-induced delays in OPTT’s revenue-generating projects negatively impacted the company’s top line in its last reported quarter. Its revenue has shrunk, and its profit margin remained negative. Although the clean energy hype has been driving its shares up over the past year, OPTT’s current valuation is not justified, given the high losses and expenses incurred by the company. So, we think the stock could suffer a pullback in the near term.

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Should You Add Ocean Power Technologies Stock to Your Portfolio?

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