The investment case for Ocean Power Technologies received a significant boost recently, as research firm HC Wainwright upgraded the company’s stock to a “strong-buy” rating. This vote of confidence coincides with the release of the firm’s latest quarterly figures and a dramatically expanding pipeline of potential business. Market experts are now modeling a path for the company to reach earnings per share (EPS) breakeven by the fiscal year 2030.
Management Confidence and Operational Metrics
A notable signal of internal optimism came from the company’s Chief Executive Officer, who made a direct purchase of shares. This transaction increased the CEO’s holdings to 510,690 common shares. Operationally, the quarter saw the delivery of eight autonomous vehicles, underscoring active project execution despite broader challenges.
The financial headlines from the report are a study in contrasts. On one hand, the quarterly revenue figure remained modest at $424,000. Operational expenses for the period were substantially higher, recorded at $8.7 million. However, the forward-looking indicators tell a more compelling story. The firm’s order backlog has experienced explosive growth, surging by nearly 300% year-over-year to reach $15.0 million. Furthermore, the total sales pipeline—representing potential future contracts—has expanded to $137.5 million. This marks a 63% increase from the prior year’s pipeline value of $84.4 million.
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Analyst Rationale and Strategic Direction
In its research note, HC Wainwright justified the upgrade by pointing to long-term earnings projections, anticipating a gradual improvement in EPS leading to the outlined breakeven timeline. Several other major analyst firms maintain “Buy” ratings on the stock, with many choosing to emphasize the strength of the growing sales pipeline over short-term revenue volatility.
Company management attributed part of the low quarterly revenue to the U.S. government shutdown, which disrupted delivery and procurement processes. Strategically, Ocean Power is advancing its focus on AI-supported autonomous systems. New partnerships aimed at developing digital-twin and simulation capabilities are intended to help convert the sales pipeline into firm orders more efficiently and enhance the scalability of its platform.
The Path Forward
The immediate financial picture remains challenging, with revenues currently lagging far behind operational costs. The critical question for investors is whether the company can successfully translate its $137.5 million pipeline into firm orders and steady deliveries. If it can achieve this conversion while simultaneously working to reduce operational losses, a more sustainable recovery becomes plausible. HC Wainwright’s projection of breakeven by fiscal 2030 encapsulates this core investment thesis, suggesting that current growth metrics may eventually translate into profitability.
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