Ocean Power stock soars after WAM-V deal with the US government

Ocean Power Technologies Inc (NYSE: OPTT) witnessed a remarkable surge of 70% on Wednesday following its announcement of a preliminary deal. 

The company revealed its success in securing a sole source contract award for multiple WAM-Vs, which are set to be delivered to a department of the US Government.

The contract will ultimately be awarded as a Firm-Fixed-Price purchase order through a noncompetitive process.

The revenue generated from this contract will be recognized evenly over the duration of the agreement, considering the anticipated delivery date in the near future.

Shares of the maritime solutions and services do not currently pay a dividend.

Why is it significant for Ocean Power stock?

Ocean Power has “reached an agreement in principle for multiple WAM-Vs for delivery” to the government of the United States. 

OPTT did not, however, disclose financial terms of the agreement due to the sensitive nature of the relationship, which Philipp Stratmann – its chief executive dubbed a “proof” that Ocean Technology products are key to the “future of ocean security”. 

His company’s WAM-V (small unmanned surface vehicle), the CEO added in a press release today, is a “cost-efficient force multiplier for the US government”.

Despite a massive surge this morning, Ocean Power stock is still down significantly versus its year-to-date high. 

When will OPTT deliver vehicles to the US government?

Ocean Power Technologies Inc did not specify when it will deliver the said vehicles but confirmed it will be in the near future. 

Revenue from the announced preliminary agreement with the US government, the company based out New Jersey added, will materialise throughout the duration of the contract. According to CEO Philipp Stratmann:

The dual use nature of our technologies enables us to provide systems to a broad set of customers.

The news arrives only days after Ocean Power was selected as preferred supplier for a PowerBuoy equipped with Merrows – its AI enabled Maritime Domain Awareness Solution slated for immediate delivery in the Middle East. 

Ocean Power had record revenue growth in Q3

The aforementioned back-to-back announcements underscore Ocean Power Technologies’ growing presence in the maritime technology sector and its increasing appeal to both government and other offshore operators. 

In March, OPTT reported record revenue growth for its fiscal third quarter. Its gross profit also climbed sharply on a year-over-year basis from $0.1 million to $0.8 million in Q3. Philipp Stratmann – the chief executive of Ocean Power said at the time:

We continue to make progress on our path towards profitability as evidenced by the continued growth in our pipeline, revenues, and gross margin. Our efforts to increase our backlog and revenues in the defense and national security industry are paying off.

The post Ocean Power stock soars after WAM-V deal with the US government appeared first on Invezz