Westport Fuel Systems (WPRT) AI Stock Analysis

• Market Cap: C$39.07M
• Dividend Yield: N/A
• Average Volume (3M): 10.20K
• Price to Earnings (P/E): ―
• Beta (1Y): 2.08
• Revenue Growth: -47.09%
• EPS Growth: -119.76%
• Country: CA
• Employees: 1,509
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Auto - Parts
• EPS (TTM): -1.08
• Shares Outstanding: 17,362,535
• 10 Day Avg. Volume: 6,032
• 30 Day Avg. Volume: 10,203
• PEG Ratio: 0.05
• Price to Book (P/B): 0.46
• Price to Sales (P/S): 0.21
• P/FCF Ratio: -6.46
• 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: C$6.15
• Price Target Upside: 173.52% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 46 Neutral
• Price Target: C$2.50 ▲(11.11% Upside)

Westport Fuel Systems is navigating a challenging environment with significant financial and technical hurdles. The stock is currently unattractive due to negative valuation metrics and bearish technical indicators. However, strategic shifts and recent corporate developments offer potential for future growth, particularly in the heavy-duty and alternative fuel systems markets.

Positive Factors

Strategic Focus on Heavy-Duty Systems

By divesting its Light-Duty segment, Westport can focus resources on its core heavy-duty and alternative fuel systems, potentially enhancing market position and innovation in these areas.

Improved Gross Margin

The improvement in gross margin indicates better cost management and pricing strategies, which can enhance profitability and financial health over the long term.

Strong Cash Position

A strong cash position and reduced debt enhance financial flexibility, allowing Westport to invest in growth opportunities and weather economic uncertainties.

Negative Factors

Revenue Decline

The significant revenue decline reflects challenges in maintaining sales momentum, which could hinder the company's ability to fund operations and growth initiatives.

Negative Adjusted EBITDA

Negative adjusted EBITDA indicates operational inefficiencies and challenges in achieving profitability, potentially impacting long-term financial sustainability.

Net Loss Increase

An increasing net loss suggests ongoing financial struggles, which may limit the company's ability to invest in growth and innovation, affecting future competitiveness.

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 technology products, including fuel systems, components, and related services. The company has key revenue streams from various sectors, such as commercial vehicles, passenger vehicles, and industrial applications. Additionally, Westport engages in partnerships with original equipment manufacturers (OEMs) and other industry players to integrate its technologies into their vehicles, which helps expand their market reach. The company's earnings are also supported by ongoing research and development initiatives aimed at innovating and enhancing their product offerings to meet changing regulatory standards and consumer demands for cleaner fuel alternatives.

Westport Fuel Systems Financial Statement Overview

Summary

Westport Fuel Systems faces significant financial challenges, with declining revenues and persistent losses impacting profitability. While the company maintains a conservative leverage position, its ability to generate returns and cash flow remains weak. Improvements in operational efficiency and cost management are crucial for future financial stability.

Income Statement

Westport Fuel Systems has experienced a significant decline in revenue, with a TTM revenue growth rate of -23.98%. The gross profit margin is moderate at 20.42%, but the company is struggling with profitability, as indicated by a negative net profit margin of -3.60% and negative EBIT and EBITDA margins. This suggests challenges in managing costs and achieving operational efficiency.

Balance Sheet

The company's debt-to-equity ratio is relatively low at 0.37, indicating a conservative leverage position. However, the return on equity is negative at -7.40%, reflecting ongoing losses and inefficiencies in generating returns for shareholders. The equity ratio is not explicitly calculated, but the balance sheet shows a stable capital structure with room for improvement in profitability.

Cash Flow

Westport Fuel Systems has a negative operating cash flow and free cash flow, although there is a positive free cash flow growth rate of 19.23%. The operating cash flow to net income ratio is low, indicating challenges in converting earnings into cash. The free cash flow to net income ratio is negative, reflecting cash flow difficulties.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	160.16M	302.30M	331.80M	305.70M	312.41M	252.50M
Gross Profit	30.82M	57.59M	48.94M	36.20M	48.15M	39.54M
EBITDA	-15.70M	-5.40M	-33.24M	-28.81M	-18.18M	-11.78M
Net Income	-60.66M	-21.84M	-49.72M	-32.70M	13.66M	-7.36M
Balance Sheet
Total Assets	104.09M	291.62M	355.75M	407.45M	471.31M	346.26M
Cash, Cash Equivalents and Short-Term Investments	33.10M	37.24M	54.75M	86.18M	124.89M	64.26M
Total Debt	5.71M	52.78M	82.83M	76.42M	97.92M	113.36M
Total Liabilities	23.87M	154.60M	195.30M	203.49M	234.89M	242.20M
Stockholders Equity	80.22M	137.03M	160.45M	203.97M	236.42M	104.06M
Cash Flow
Free Cash Flow	-3.39M	-9.74M	-28.77M	-46.11M	-57.95M	-42.27M
Operating Cash Flow	5.54M	7.18M	-13.19M	-31.58M	-43.79M	-35.15M
Investing Cash Flow	7.94M	4.47M	-15.41M	17.65M	2.29M	13.84M
Financing Cash Flow	-9.49M	-25.21M	-2.22M	-22.46M	104.73M	39.69M

Westport Fuel Systems Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 2.25
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• 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 2.25 is below the 20-day moving average (MA) of 2.37, below the 50-day MA of 2.55, and below the 200-day MA of 3.79, indicating a bearish trend. The MACD of -0.07 indicates Negative momentum. The RSI at 39.28 is Neutral, neither overbought nor oversold. The STOCH value of 20.23 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
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
HC	50 Neutral	C$11.08M	-2.94	-262.27%	―	278.39%	71.84%
WPRT	46 Neutral	C$39.07M	-0.51	-24.45%	―	-47.09%	-119.76%
ATHR	37 Underperform	C$3.77M	-3.14	―	―	―	-67.37%
FHYD	28 Underperform	C$29.05M	-8.09	―	―	―	57.00%

Westport Fuel Systems Corporate Events

Westport Unveils CNG Solution for HPDI Engines, Enhancing Clean Transportation

Westport Fuel Systems has announced a new compressed natural gas (CNG) solution for its HPDI engines, aiming to expand its market reach and improve the affordability and performance of heavy-duty natural gas trucks. This innovation is expected to significantly impact the transportation industry by offering a viable alternative to diesel, reducing emissions, and providing economic advantages for fleet operators, particularly in North America where natural gas resources are abundant.

Westport’s Cespira JV Advances with OEM Truck Trial Agreement

Westport Fuel Systems, through its joint venture Cespira with the Volvo Group, has entered into an agreement with a leading OEM to supply HPDI components for a customer truck trial. This trial is a significant step towards potential full commercialization with a second OEM, aiming to evaluate the market interest and viability of the direct injection system in heavy-duty trucking markets. The outcome of this trial could influence further investment decisions by the OEM, impacting Westport’s operations and positioning in the alternative fuel systems industry.