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FIRST ACCESS to Nadeem Walayat’s Analysis and Trend Forecasts

WISA Stock Breaking Down the Summit Wirless Opportunity

Companies / Corporate News Dec 16, 2020 - 02:55 PM GMT

By: Joshua_Rodriguez


Summit Wireless Technologies (NASDAQ: WISA) recently announced the publication of a new investor presentation. After diving into the presentation, I’ve found that the investment opportunity is only becoming more compelling.

Of course, when I see strong investing opportunities, I like to share them with you, my readers.

With that said, here’s what’s driving my interest in WISA stock today:

Skip to What You Want to Read

  1. What Is Summit Wireless Technologies?
  2. WiSA Is Building a Standard in Home Audio
  3. Simplicity & Affordability. The Keys to Summit Wireless Technologies’ Success
  4. Revenue Growth on the Horizon
  5. Final Thoughts

What Is Summit Wireless Technologies?

Summit Wireless Technologies is a company that’s focused on changing home audio as we know it. Through cutting-edge innovation, the company has developed technologies that both simplify the setup of home immersive sound systems, and reduce the cost of quality surround sound.

It’s claim to fame is its ultra-low latency, multi-channel wireless sound technology that is quickly taking the home entertainment industry by storm.

In fact, Summit Wireless Technologies founded the Wireless Speaker & Audio, or WiSA, association, an association that boasts members like LG, Harman, TCL, and ~70 others.

WiSA Is Building a Standard in Home Audio

Prior to the WiSA association, the home audio market was highly fragmented, with no real standard of quality. The Association is changing that in a big way.

Today, the WiSA Association has more than 70 television and audio brand members. The roster of names is an impressive one, including the likes of LG, Xbox, Toshiba, Phillips, Harman, and several others.

These members are working with the Association to set the standard for low latency, high quality, multichannel audio with the WiSA global interoperability standard.

Simplicity & Affordability. The Keys to Summit Wireless Technologies’ Success

In my view, there are two key factors that will drive substantial growth in WiSA, and consumer adoption of the company’s technologies ahead. Those are the simplicity of setup and affordability of quality home sound.

In terms of setup, consumers can take advantage of the innovated technologies developed by Summit Wireless and implemented by members of the WiSA association in two ways:

  1. WiSA-Ready Television & WiSA Certified Surround System. The first option is for the consumer to invest in a WiSA Ready television and a WiSA certified surround system. From there, all the consumer needs to do is plug the television and speakers in, and they’re ready to enjoy immersive sound from the comfort of home without the need to run wires or hire an expert to set up the system.
  2. WiSA SoundSend Dongle & WiSA Certified Speakers. Recently, Summit Wireless Technologies announced the launch of the WiSA Association’s first branded product, the WiSA SoundSend Dongle. With SoundSend, consumers don’t need to purchase a new, WiSA-Ready television to take advantage of the high quality sound offered through the company’s innovative technology. All consumers need to do is plug SoundSend into their existing smart television, plug in their WiSA Certified Speakers, and enjoy high definition, ultra-low latency surround sound.

In general, simplicity comes with a cost, and I mean a monetary one. That’s what makes WiSA so interesting. Its innovative technology is actually very inexpensive.

In fact, on page 9 of their recent investor presentation, which you can find here, the company outlines the cost and quality of home sound options as we know them today:

  1. Television & Soundbar. The lowest quality option is to pair a television with a soundbar, which will cost just shy of $800 for a premium soundbar by Sonos/Sony/Bose.
  2. Add a Sub. If you want a quality subwoofer to add to the TV/Soundbar combo, you'll have to pay about $1,300.
  3. Add two Rear Speakers: To create a semi immersive sound experience with a subwoofer and just two rear surround sound system, you’ll pay about $1,800.

Considering this, you’d expect for a WiSA sound system to cost above $1,800, but it’s cheaper than the subwoofer and soundbar option, with WiSA bundles as low as $899 with holiday special of $799 at Platin Audio. I checked Amazon and they even carry a 4 star rating.

Revenue & WiSA Member Growth on the Horizon

Considering the fact that Summit Wireless provides such a compelling offering with an inexpensive price tag, it’s no surprise that consumer adoption is picking up in a big way. Traffic to the WiSA website climbed by 112%. In Q4, the company is expecting traffic to climb by between 51% and 76% on a sequential basis.

Of course, growing consumer interest is driving substantial revenue growth. In the third quarter, Summit Wireless Technologies generated 45% revenue growth on a year over year basis. Gross margins came in at 17.1% in the quarter, up from just 7.6% a year before.

In the fourth quarter, Summit is expecting to generate more of the same. In fact, it’s currently guiding for 100+% revenue growth on a year over year basis in the quarter.

Final Thoughts

The bottom line here is that Summit Wireless Technologies is a stock that simply should not be ignored. The company is on the leading edge of innovation in home sound. With the pandemic leading consumers to beef up their home entertainment options, there’s never been a better time for this kind of movement.

And the movement is picking up pace.

The WiSA Association now boasts more than 70 members, some of them being massive, household names. At the same time, consumer awareness is growing, leading to a substantial increase in revenue.

All in all, WISA stock is one to heavily consider.

This is a paid advertisement.

By Joshua Rodriguez

© 2020 Copyright Joshua Rodriguez - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

© 2005-2019 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

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