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Westport Fuel Systems (TSE:WPRT)
TSX:WPRT
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Westport Fuel Systems
(TSX:WPRT)
44Neutral
Positive Factors
Cost Controls
The firm saw a ~40% reduction in R&D and G&A expenses, reflecting successfully implementation of costs controls.
Gross Margins
Overall gross margins for the quarter were 21.8%, improving from 20.5% in 2Q24 and 17.1% in 3Q23.
Negative Factors
Net Loss
Despite improvements in cost efficiencies, the company still reported a net loss of $3.9mn indicating additional growth and cost measures are needed to reach bottom-line profitability.
Westport Fuel Systems (WPRT) vs. S&P 500 (SPY)
Market Cap
$86.67M
Dividend YieldN/A
Average Volume (3M)4.71K
Price to Earnings (P/E)―
Beta (1Y)1.81
Revenue Growth-1.69%
EPS Growth50.79%
CountryCA
Employees1,715
SectorConsumer Cyclical
Sector Strength48
IndustryAuto - Parts
Share Statistics
EPS (TTM)-2.02
Shares Outstanding17,264,864
10 Day Avg. Volume5,430
30 Day Avg. Volume4,708
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.19
Price to Cash Flow (P/CF)-1.50
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$31.22Price Target Upside456.45% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
Westport Fuel Systems Business Overview & Revenue Model
Company DescriptionWestport Fuel Systems Inc. is a global leader in alternative fuel, low-emissions transportation technologies. The company designs, manufactures, and supplies advanced clean fuel systems and components for the automotive and transportation sectors. With a focus on reducing the environmental impact of transportation, Westport's core products include natural gas, propane, and hydrogen fuel systems, which are used in passenger cars, light and heavy-duty trucks, and various industrial applications.
How the Company Makes MoneyWestport Fuel Systems generates revenue through the sale of its alternative fuel systems and components to original equipment manufacturers (OEMs) and the aftermarket. The company's key revenue streams include product sales, technology licensing, and engineering services. Westport collaborates with major automotive companies to integrate its clean fuel technologies into vehicles, enhancing its market reach and adoption. Additionally, strategic partnerships and joint ventures, such as those with Cummins Inc. and Weichai Power, significantly contribute to its earnings by expanding the deployment of its technologies across global markets.
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 | |||||
| TTM | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 | Dec 2019 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 314.36M | 331.80M | 305.70M | 312.41M | 252.50M | 305.34M | Gross Profit |
| 51.29M | 48.94M | 36.20M | 48.15M | 39.54M | 68.25M | EBIT |
| -30.79M | -45.88M | -43.83M | 2.94M | -1.76M | 8.39M | EBITDA |
| -22.65M | -33.24M | -28.81M | -18.18M | -11.78M | -6.08M | Net Income Common Stockholders |
| -25.64M | -49.72M | -32.70M | 13.66M | -7.36M | 188.00K |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 45.96M | 54.75M | 86.18M | 124.89M | 64.26M | 43.73M | Total Assets |
| 288.27M | 355.75M | 407.45M | 471.31M | 346.26M | 279.93M | Total Debt |
| 71.96M | 82.83M | 76.42M | 97.92M | 113.36M | 66.40M | Net Debt |
| 26.00M | 28.08M | -9.76M | -26.97M | 49.10M | 22.67M | Total Liabilities |
| 200.76M | 195.30M | 203.49M | 234.89M | 242.20M | 190.57M | Stockholders Equity |
| 87.51M | 160.45M | 203.97M | 236.42M | 104.06M | 89.36M |
| Cash Flow | Free Cash Flow | ||||
| -29.99M | -28.77M | -46.11M | -57.95M | -42.27M | -24.55M | Operating Cash Flow |
| -13.94M | -13.19M | -31.58M | -43.79M | -35.15M | -15.69M | Investing Cash Flow |
| 4.97M | -15.41M | 17.65M | 2.29M | 13.84M | 16.18M | Financing Cash Flow |
| -1.02M | -2.22M | -22.46M | 104.73M | 39.69M | -14.76M |
Westport Fuel Systems Technical Analysis
Negative
5.61
Price Trends
5.92
Negative
5.85
Negative
6.63
Negative
Market Momentum
-0.22
Positive
34.48
Neutral
70.18
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 5.61 is below the 20-day moving average (MA) of 5.62, below the 50-day MA of 5.92, and below the 200-day MA of 6.63, indicating a bearish trend. The MACD of -0.22 indicates Positive momentum. The RSI at 34.48 is Neutral, neither overbought nor oversold. The STOCH value of 70.18 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 (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | C$3.47B | 43.77 | 7.09% | ― | 33.74% | 61.09% | |
76 Outperform | C$1.06B | 8.72 | 26.63% | 3.90% | 12.14% | 26.17% | |
71 Outperform | $3.69B | 24.11 | 16.36% | 7.61% | 6.95% | -35.38% | |
67 Neutral | $37.06B | 12.10 | 10.88% | 3.51% | 3.97% | -22.22% | |
59 Neutral | $12.50B | 11.24 | 1.20% | 3.72% | 1.27% | -20.93% | |
57 Neutral | C$1.49B | ― | -0.38% | ― | 18.07% | 98.61% | |
44 Neutral | $86.67M | ― | -16.00% | ― | -1.69% | 50.79% |
* Consumer Cyclical Sector Average
Performance Comparison
TSE:WPRT
Westport Fuel Systems
5.61
-3.66
-39.48%
TSE:CVE
Cenovus Energy
20.48
-5.52
-21.25%
TSE:GEI
Gibson Energy
22.67
0.98
4.53%
TSE:PSI
Pason Systems
13.35
-1.36
-9.25%
TSE:NFI
NFI Group Inc
12.11
-0.70
-5.46%
TSE:MDA
MDA Ltd
28.85
14.25
97.60%
Westport Fuel Systems Earnings Call Summary
Earnings Call Date: Nov 12, 2024 | % Change Since: -2.26% | Next Earnings Date: Mar 31, 2025
Earnings Call Sentiment Neutral
The earnings call presented a balanced view with notable success in cost reductions, margin improvements, and Cespira's performance. However, these were offset by a decline in overall revenue, challenges in the hydrogen market, and ongoing issues with Weichai orders.Highlights
Cespira Operational Success
Cespira, the joint venture, reported $16.2 million in revenue in Q3, a $2.7 million increase from the same quarter last year, offsetting the reported decline in consolidated revenue.
Cost Reduction Achievements
Westport successfully reduced SG&A expenses by almost 40% and R&D expenses by over 40% compared to the same quarter last year, leading to improved gross margins and adjusted EBITDA.
Gross Margin Improvement
Gross margin increased to $14.5 million or 22% of revenue in Q3 2024, up from $13.2 million or 17% in Q3 2023, driven by increased sales volumes and a change in sales mix.
Light-Duty Segment Performance
Light-duty revenue for Q3 2024 was $61.5 million, up from $60.2 million for Q3 2023. The segment also saw an increase in gross margin to 23% of revenue.
Lowlights
Revenue Decline
Total revenue for Q3 2024 was $66.2 million, a 14% decrease compared to the prior year period, primarily due to heavy-duty OEM business now being conducted in Cespira.
Slowdown in Hydrogen Market
High pressure Gas Controls revenue decreased to $1.6 million from $3.7 million in Q3 2023, attributed to a general slowdown in the hydrogen market.
Challenges with Weichai Orders
Westport has not received significant orders from Weichai and does not anticipate additional volume by the end of 2024 despite ongoing collaboration.
Cash Flow and Inventory Management
Net cash used by operating activities was $9.9 million, with significant cash outflows related to inventory buildup to support Euro 6 deliveries and heavy-duty business.
Company Guidance
In the Q3 2024 earnings call for Westport Fuel Systems, the company highlighted several key metrics and strategic updates. The quarter marked the first full operational period for the joint venture Cespira, which generated $16.2 million in revenue, a notable increase from $13.5 million in the same quarter last year. This JV contributed to a decrease in consolidated revenue by 14% to $66.2 million, due to the transition of heavy-duty OEM operations into Cespira. Westport achieved a 22% gross margin, up from 17% in Q3 2023, driven by cost-cutting initiatives and increased sales volume in the light-duty segment, which generated $61.5 million in revenue. The company also reported a decrease in SG&A and R&D expenses by approximately 40% compared to the previous year. Despite a slowdown in hydrogen infrastructure development, Westport remains optimistic about the future role of hydrogen and continues to focus on alternative fuels like LPG and CNG. The company is also working on improving its operational cash flow, with cash and cash equivalents standing at $33.3 million as of September 30, 2024.Westport Fuel Systems Corporate Events
Westport Fuel Systems Announces Director Retirement and Leadership Transition
Jan 13, 2025
Westport Fuel Systems has announced the retirement of Brenda Eprile from its Board of Directors, effective January 6, 2025. The company is in the process of evaluating options to appoint an independent director to fill the vacancy left by her departure. The retirement marks the end of Eprile’s 11-year tenure with Westport, during which she provided exceptional leadership and dedication. This transition may influence the company’s governance structure as it continues its mission to innovate in the clean fuel technology sector.
Westport Fuel Systems Reports Q3 Revenue and Strategy
Nov 12, 2024
Westport Fuel Systems has reported a 14% revenue decline for Q3 2024, mainly due to transitioning its heavy-duty OEM assets to Cespira, which generated $16.2 million. Despite the revenue drop, the company improved its net loss and adjusted EBITDA by executing strategic cost-cutting measures and focusing on innovation and operational excellence.
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.