Categories: Invest

Is it too late to buy Ocean Power Technologies stock after spiking 18% after earnings?

On Thursday, Ocean Power Technologies Inc. (NASDAQ:OPTT) shares advanced by more than 2%, extending this week’s post-earnings gains to 18%. The stock had spiked nearly 10% on Wednesday. Ocean Power reported its most recent quarterly results, Tuesday after the close, registering a significant revenue growth and a squeeze in loss per share.

The company posted an FQ2 GAAP loss per share of $0.10, while revenue for the quarter increased by 108% to $0.25 million from the same quarter a year ago. The company also said it had $72.6 million in unrestricted cash and cash equivalents as of 31st October.

Is Ocean Power stock overvalued?


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From an investment perspective, Ocean Power shares trade at a steep price-sales ratio of 82.14, thus making the stock less attractive to bargain hunters. 

On the other hand, analysts expect the company’s bottom line to improve by about 66% this year after its loss per share declined during Q2. 

Therefore, the stock could be an intriguing option for investors that target companies that have the potential to spike on growth prospects.

Source – TradingView

Technically, Ocean Power shares seem to have recently bounced off the trendline support to recover from oversold conditions, surging towards the 100-day moving average.

Therefore, although the stock is yet to reach overbought conditions, the 100-day MA could trigger a short-term pullback towards $1.73 or lower to $1.50. 

On the other hand, if the rally continues above the 100-day MA, Ocean Power could find resistance at about $2.21, or higher at $2.44.

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