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Westport Fuel Systems (US) (TSE:WPRT)
:WPRT
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Westport Fuel Systems
(NASDAQ:WPRT)
48Neutral
Positive Factors
Operational Efficiency
The firm saw a ~40% reduction in R&D and G&A expenses, reflecting successfully implementation of costs controls.
Strategic Positioning
Management is repositioning the company with an emphasis on leveraging its existing technology and solutions for the hydrogen fuel market and the compressed natural gas (CNG) opportunity in North America.
Negative Factors
Market Challenges
Management acknowledged a slowdown in the hydrogen infrastructure which poses a risk to the adoption rate of Westport's hydrogen products.
Revenue Performance
Westport reported consolidated revenues of $75.1M in 4Q24, showing a 14% year-over-year decrease.
Westport Fuel Systems (WPRT) vs. S&P 500 (SPY)
Market Cap
C$70.35M
Dividend YieldN/A
Average Volume (3M)5.89K
Price to Earnings (P/E)―
Beta (1Y)1.94
Revenue Growth-7.55%
EPS Growth55.18%
CountryCA
Employees1,509
SectorConsumer Cyclical
Sector Strength59
IndustryAuto - Parts
Share Statistics
EPS (TTM)-1.74
Shares Outstanding17,326,733
10 Day Avg. Volume2,745
30 Day Avg. Volume5,888
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.00
Price to Cash Flow (P/CF)0.00
P/FCF Ratio0.00
Enterprise Value/Market Cap1.57
Enterprise Value/RevenueN/A
Enterprise Value/Gross Profit2.26
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$7.60Price Target Upside87.28% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering3
Westport Fuel Systems Business Overview & Revenue Model
Company DescriptionWestport Fuel Systems Inc. is a leading provider of advanced fuel delivery systems and components for clean, low-carbon fuels such as natural gas, propane, and hydrogen to the global transportation industry. Operating in the automotive industry, Westport designs, manufactures, and supplies alternative fuel systems and components to original equipment manufacturers (OEMs) and the aftermarket. The company's core products include high-pressure direct injection systems and components, as well as a range of fuel storage and delivery systems aimed at reducing emissions and improving the fuel efficiency of vehicles.
How the Company Makes MoneyWestport Fuel Systems generates revenue primarily through the sale of its alternative fuel systems and components to OEMs and the aftermarket. The company earns money by designing and manufacturing systems that are integrated into vehicles powered by natural gas, propane, and hydrogen, thus catering to the growing demand for low-emission transportation solutions. Key revenue streams include sales of high-pressure direct injection technology, fuel storage, and delivery systems. Westport also benefits from strategic partnerships with major automotive manufacturers who are transitioning to alternative fuel vehicles, as well as from government regulations and incentives that promote the adoption of cleaner fuels. Through these avenues, Westport secures a steady income from both product sales and strategic collaborations in the global automotive market.
Westport Fuel Systems Financial Statement Overview
Summary
Westport Fuel Systems faces financial difficulties with consistent net losses, declining revenue, and negative cash flows. Despite a balanced debt-equity structure, operational inefficiencies and unprofitability are major concerns. The company needs to focus on improving its cash generation and operational efficiency to stabilize its financial position.Income Statement
Westport Fuel Systems has faced declining revenue growth with a negative trend in profitability. The company's revenue decreased from $331.8 million to $314.4 million in the TTM period, reflecting a -5.26% growth rate. The gross profit margin improved slightly to 16.32% from the previous year's 14.75%, but the net profit margin remains negative at -8.16%, indicating ongoing net losses. EBIT and EBITDA margins are also negative, showing operational challenges.40
Negative
Balance Sheet
The balance sheet reveals a moderate debt-to-equity ratio of 0.40, reflecting manageable leverage. However, the return on equity is negative at -17.18%, indicating inefficiencies and losses impacting shareholder returns. The equity ratio is 47.92%, suggesting a balanced structure of equity and liabilities. While the company maintains a reasonable equity position, profitability issues persist.55
Neutral
Cash Flow
Cash flow management is challenging, with a negative free cash flow growth rate of -4.26% year-over-year. The operating cash flow to net income ratio is 0.54, reflecting struggles in converting revenue into cash. The free cash flow to net income ratio is negative, highlighting ongoing cash outflows in operations and capital expenditures.35
Negative
| Breakdown | ||||
| Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 | Dec 2019 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 331.80M | 305.70M | 312.41M | 252.50M | 305.34M | Gross Profit |
| 48.94M | 36.20M | 48.15M | 39.54M | 68.25M | EBIT |
| -45.88M | -43.83M | 2.94M | -1.76M | 8.39M | EBITDA |
| -33.24M | -28.81M | -18.18M | -11.78M | -6.08M | Net Income Common Stockholders |
| -49.72M | -32.70M | 13.66M | -7.36M | 188.00K |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 54.75M | 86.18M | 124.89M | 64.26M | 43.73M | Total Assets |
| 355.75M | 407.45M | 471.31M | 346.26M | 279.93M | Total Debt |
| 82.83M | 76.42M | 97.92M | 113.36M | 66.40M | Net Debt |
| 28.08M | -9.76M | -26.97M | 49.10M | 22.67M | Total Liabilities |
| 195.30M | 203.49M | 234.89M | 242.20M | 190.57M | Stockholders Equity |
| 160.45M | 203.97M | 236.42M | 104.06M | 89.36M |
| Cash Flow | Free Cash Flow | |||
| -28.77M | -46.11M | -57.95M | -42.27M | -24.55M | Operating Cash Flow |
| -13.19M | -31.58M | -43.79M | -35.15M | -15.69M | Investing Cash Flow |
| -15.41M | 17.65M | 2.29M | 13.84M | 16.18M | Financing Cash Flow |
| -2.22M | -22.46M | 104.73M | 39.69M | -14.76M |
Westport Fuel Systems Technical Analysis
Negative
4.06
Price Trends
4.98
Negative
5.42
Negative
6.12
Negative
Market Momentum
-0.29
Negative
38.33
Neutral
74.75
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:WPRT, the sentiment is Negative. The current price of 4.06 is above the 20-day moving average (MA) of 3.98, below the 50-day MA of 4.98, and below the 200-day MA of 6.12, indicating a bearish trend. The MACD of -0.29 indicates Negative momentum. The RSI at 38.33 is Neutral, neither overbought nor oversold. The STOCH value of 74.75 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:WPRT.
Westport Fuel Systems Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Performance Comparison
TSE:WPRT
Westport Fuel Systems
4.06
-4.13
-50.43%
TSE:ATHR
Aether Catalyst Solutions
0.09
<0.01
12.50%
TSE:FHYD
First Hydrogen
0.48
-0.51
-51.52%
Westport Fuel Systems Earnings Call Summary
Earnings Call Date:Mar 31, 2025
(Q4-2024)
| % Change Since: -27.11%|
Next Earnings Date:May 13, 2025
Earnings Call Sentiment Neutral
Westport Fuel Systems is undergoing significant changes, including a strategic divestment of its light-duty business, which is expected to improve financial strength and allow a concentrated focus on its core heavy-duty and industrial segments. Despite positive developments in margins, EBITDA, and operational cash flow, the company experienced a decline in overall revenue and faces liquidity challenges that need addressing.Q4-2024 Updates
Positive Updates
Improved Margins and EBITDA
Gross margin increased to $14.3 million or 19% of revenue in Q4 2024, up from $8 million or 9% in Q4 2023. Adjusted EBITDA loss improved to $1.8 million in Q4 2024 from a $10.9 million loss in Q4 2023.
Positive Cash Flow from Operations
For the first time, Westport generated positive net cash from operations with $7.2 million in 2024.
Divestment of Light-Duty Business
Westport announced a transaction valued at $75.1 million to divest its light-duty business, which is expected to strengthen the balance sheet and allow a focused strategy on heavy-duty transport and industrial segments.
Growth in European Customer Sales
An increase in sales to established European customers helped improve margins.
Negative Updates
Revenue Decline
Q4 2024 revenue was $75.1 million, a 14% decrease compared to Q4 2023. Full-year 2024 revenue was $302.3 million, a 9% decrease from 2023.
Liquidity Concerns
Cash and cash equivalents decreased to $37.6 million at the end of 2024 from $54.9 million at the end of 2023. The company projects that cash will not be sufficient to fund operations for the next 12 months.
Company Guidance
In Westport's Q4 and fiscal year 2024 conference call, CEO Dan Sceli and CFO Bill Larkin outlined significant financial developments and strategic shifts. The company's revenue for the full year was $302.3 million, marking a 9% decrease from the previous year, primarily due to the HPDI revenue being redirected to Cespira. However, they reported improvements in gross margin, which increased to $57.6 million or 19% of revenue, up from $48.9 million or 15% the previous year. Adjusted EBITDA losses were reduced significantly from $21.5 million in 2023 to $11.2 million in 2024. The company achieved positive net cash from operations for the first time, with $7.2 million generated. A notable transaction was announced for the divestment of their light-duty business valued at $75.1 million, expected to enhance financial robustness and focus on growth in hard-to-decarbonize segments such as long-haul heavy-duty transport. The transaction is anticipated to close by the end of Q2 2025, subject to shareholder approval. This strategic move aims to streamline operations and align the company towards opportunities in HPDI technology and high-pressure controls, with a focus on expanding the addressable market in mobile and industrial applications.Westport Fuel Systems Corporate Events
M&A TransactionsBusiness Operations and Strategy
Westport Fuel Systems Announces Strategic Divestment of Light-Duty Segment
Positive
Apr 30, 2025
Westport Fuel Systems has entered into lock-up agreements with shareholders, executives, and board members to support the sale of its Light-Duty segment to Heliaca Investments. This transaction, valued at $73.1 million with potential earnouts, aims to improve Westport’s financial stability and focus on growth initiatives in hard-to-decarbonize mobility and industrial applications. The sale is expected to close in late Q2 2025, subject to shareholder approval and customary conditions, allowing Westport to streamline its operations and enhance efficiency.
Spark’s Take on TSE:WPRT Stock
According to Spark, TipRanks’ AI Analyst, TSE:WPRT is a Neutral.
Westport Fuel Systems is facing significant challenges with its financial performance, particularly with persistent negative net income, free cash flow issues, and declining revenue. The technical analysis indicates a bearish trend, further impacting the stock’s attractiveness. While the company is making strategic moves, such as divesting its light-duty business, which could improve its focus and financial strength, these changes have yet to address the immediate liquidity issues and valuation concerns, keeping the overall score on the lower side.
To see Spark’s full report on TSE:WPRT stock, click here.
Shareholder MeetingsFinancial Disclosures
Westport Fuel Systems Schedules Q1 2025 Financial Results Release and Annual Meeting
Neutral
Apr 17, 2025
Westport Fuel Systems has announced the release of its Q1 2025 financial results on May 13, 2025, followed by a conference call and webcast on May 14, 2025, to discuss the results and other corporate developments. Additionally, the company will hold its 2025 Annual General and Special Meeting virtually on May 15, 2025, encouraging shareholders to vote in advance to streamline the process. These events reflect Westport’s ongoing commitment to transparency and engagement with its stakeholders.
Spark’s Take on TSE:WPRT Stock
According to Spark, TipRanks’ AI Analyst, TSE:WPRT is a Neutral.
Westport Fuel Systems is making progress in improving margins and reducing losses, but faces significant challenges including declining revenue and liquidity concerns. Technical indicators suggest a bearish trend, and valuation metrics reflect the company’s lack of profitability. Strategic shifts, such as the divestment of the light-duty business, aim to strengthen the company, but substantial risks remain.
To see Spark’s full report on TSE:WPRT stock, click here.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.