Westport Fuel Systems (WPRT) AI Stock Analysis

• Market Cap: $67.75M
• Dividend Yield: N/A
• Average Volume (3M): 6.64K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.96
• Revenue Growth: -7.55%
• EPS Growth: 55.18%
• Country: CA
• Employees: 1,509
• Sector: Consumer Cyclical
• Sector Strength: 58
• Industry: Auto - Parts
• EPS (TTM): -1.74
• Shares Outstanding: 17,326,733
• 10 Day Avg. Volume: 6,887
• 30 Day Avg. Volume: 6,640
• PEG Ratio: N/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 Ratio: 0.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $7.61
• Price Target Upside: 94.61% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3

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.

Positive Factors

Cost Management

The firm saw a ~40% reduction in R&D and G&A expenses, reflecting successful implementation of cost controls.

Growth Potential

New OEM signups under Cespira should provide investors with some evidence with respect to growth potential for that business.

Innovation and Product Expansion

The launch of the Kia Niro Tri-Fuel and the Prinis VSI-3 DI LPG systems indicate strong focus on innovation and expanding the product portfolio in response to market needs.

Negative Factors

Market Risks

Management acknowledged a slowdown in the hydrogen infrastructure which poses a risk to the adoption rate of Westport's hydrogen products.

Profitability Concerns

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.

Revenue Decline

Westport reported consolidated revenues of $75.1M in 4Q24, showing a 14% year-over-year decrease.

Westport Fuel Systems Business Overview & Revenue Model

Company Description

Westport Fuel Systems Inc. engages in the engineering, manufacturing, and supplying alternative fuel systems and components for use in transportation applications worldwide. The company operates through Original Equipment Manufacturer and Independent Aftermarket segments. It offers alternative fuel systems and components, which include a range of alternative fuels, such as liquefied petroleum gas, compressed natural gas, liquefied natural gas, renewable natural gas, and hydrogen; and independent aftermarket, light and heavy-duty original equipment manufacturers (OEMs) and delayed OEMs, electronics, hydrogen, and fuel storage activities. The company also provides Westport High Pressure Direct Injection 2.0, a fully integrated fuel systems that enables diesel engines using primarily natural gas fuel to match the power, torque, and fuel economy benefits found in traditional compression ignition diesel engines, which reduces greenhouse gas emissions. Its products and services are used for passenger cars; light-, medium-, and heavy-duty trucks; and cryogenics and hydrogen applications under the Cummins Westport, BRC Gas Equipment, Westport, OMVL, Prins, GFi Control systems, Emer, Zavoli, TA Gas Technology, Valtek, and AFS brands. The company was formerly known as Westport Innovations Inc. and changed its name to Westport Fuel Systems Inc. in June 2016. Westport Fuel Systems Inc. was incorporated in 1995 and is headquartered in Vancouver, Canada.

How the Company Makes Money

Westport 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.

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.

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.

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
103.84M	54.75M	86.18M	124.89M	64.26M	43.73M
	Total Assets
153.15M	355.75M	407.45M	471.31M	346.26M	279.93M
	Total Debt
16.22M	82.83M	76.42M	97.92M	113.36M	66.40M
	Net Debt
-54.01M	28.08M	-9.76M	-26.97M	49.10M	22.67M
	Total Liabilities
69.87M	195.30M	203.49M	234.89M	242.20M	190.57M
	Stockholders Equity
83.28M	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

• Technical Analysis Sentiment: Negative
• Last Price: 3.91
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: 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 3.91 is below the 20-day moving average (MA) of 4.60, below the 50-day MA of 5.35, and below the 200-day MA of 6.29, indicating a bearish trend. The MACD of -0.45 indicates Positive momentum. The RSI at 34.18 is Neutral, neither overbought nor oversold. The STOCH value of 37.72 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

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PSI	76 Outperform	C$870.56M	7.18	26.63%	4.64%	12.14%	26.17%
MDA	76 Outperform	C$3.00B	37.24	7.09%	―	33.74%	61.09%
Sector *	59 Neutral	$6.44B	11.30	3.27%	4.27%	2.37%	-21.19%
NFI	50 Neutral	C$1.35B	―	-0.38%	―	18.07%	98.61%
WPRT	46 Neutral	$67.75M	―	-14.68%	―	-7.55%	55.18%

Westport Fuel Systems Corporate Events

Westport Fuel Systems Schedules Q1 2025 Financial Results Release and Annual Meeting

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.