In a March 1 research note, analyst Gerry Sweeney announced that ROTH Capital Partners initiated coverage on Crown Electrokinetics Corp. (CRKN:OTCQB); the company intends to launch commercial sales of its DynamicTint product this year.
It is a neutral-colored optical switching film that, when applied to glass or embedded between glass sheets, electronically controls tint levels, on demand and rapidly, via electrokinetic technology, Sweeney explained.
This leading technology is part of ROTH's investment thesis on the Oregon-headquartered energy firm, which the analyst covered in the report.
The use of DynamicTint reduces a building's energy requirements, thereby lowering costs, an estimated 20–30%, according to Crown. It also can be used to retrofit existing glass, saving owners from having to replace the glass outright.
"DynamicTint technology has several advantages over competing smart-glass technologies, and we expect Crown to leverage its strategic partners to scale the technology over the coming years," Sweeney wrote, adding that the product costs about half the price of competitors' offerings.
Sweeney also noted that Crown has partnerships in place that will be key to its success. Those with global glass and film manufacturers will reduce capex, allowing for estimated gross margins of 60% at a minimum. Partner and investor Hudson Pacific Properties agreed to participate in pilot and other beta tests of Crown's commercial retrofit product. The REIT, with 115 buildings, could become a large DynamicTint consumer.
Further, Sweeney highlighted that Crown's market, commercial buildings, is large, addressable and represents a multibillion opportunity. Globally, the smart glass market was about $3.8 billion in 2020, according to MarketsandMarkets, and continues growing. The U.S. alone is home to 5.9 million commercial buildings.
"We also believe Crown will sell into the commercial skylight market and eventually the automotive market," the analyst added.
Sweeney noted that ROTH forecasts $13 million of revenue for Crown in the current fiscal year, increasing to $65 million in the next.
ROTH rates Crown Buy and calculates for it an $11 per share price target. Its stock now is trading at about $4.83 per share.[NLINSERT]
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Disclosures from ROTH Capital Partners, Crown ElectroKinetics Corp., Company Note, March 1, 2021
Regulation Analyst Certification ("Reg AC"): The research analyst primarily responsible for the content of this report certifies the following under Reg AC: I hereby certify that all views expressed in this report accurately reflect my personal views about the subject company or companies and its or their securities. I also certify that no part of my compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in this report.
Within the last twelve months, ROTH has received compensation for investment banking services from Crown ElectroKinetics Corp..
ROTH makes a market in shares of Crown ElectroKinetics Corp. and as such, buys and sells from customers on a principal basis.
Shares of Crown ElectroKinetics Corp. may be subject to the Securities and Exchange Commission's Penny Stock Rules, which may set forth sales practice requirements for certain low-priced securities.
Within the last twelve months, ROTH has managed or co-managed a public offering for Crown ElectroKinetics Corp..
ROTH Capital Partners, LLC expects to receive or intends to seek compensation for investment banking or other business relationships with the covered companies mentioned in this report in the next three months.