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Why Ocean Power Technologies (OPTT) Stock Is Sinking Today

Stocks in this article: OPTT

NEW YORK (TheStreet) -- Shares of Ocean Power Technologies (OPTT) are down -20.92% to $1.21 after it canceled plans to build a renewable energy project off the coast of Australia, saying the plan is not "commercially viable."

Ocean Power will repay what it has received of a $62.5 million grant from the Australian government, which was to support the project, according to an SEC filing.

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Separately, TheStreet Ratings team rates OCEAN POWER TECHNOLOGIES INC as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:

"We rate OCEAN POWER TECHNOLOGIES INC (OPTT) a SELL. This is driven by some concerns, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity and generally disappointing historical performance in the stock itself."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Electrical Equipment industry and the overall market, OCEAN POWER TECHNOLOGIES INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • In its most recent trading session, OPTT has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. This company's share value has not moved any higher or lower since its value 12 months ago, and we feel the risks associated with investing in this company will outweigh any potential future gains.
  • OPTT, with its very weak revenue results, has greatly underperformed against the industry average of 5.4%. Since the same quarter one year prior, revenues plummeted by 77.0%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
  • The gross profit margin for OCEAN POWER TECHNOLOGIES INC is rather high; currently it is at 55.28%. It has increased significantly from the same period last year. Regardless of the strong results of the gross profit margin, the net profit margin of -371.35% is in-line with the industry average.
  • Net operating cash flow has increased to -$1.57 million or 17.98% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -5.87%.
  • You can view the full analysis from the report here: OPTT Ratings Report

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