Westport Fuel Systems (WPRT) AI Stock Analysis

• Market Cap: $94.43M
• Dividend Yield: N/A
• Average Volume (3M): 7.69K
• Price to Earnings (P/E): ―
• Beta (1Y): 2.07
• Revenue Growth: -6.80%
• EPS Growth: 78.75%
• Country: CA
• Employees: 1,509
• Sector: Consumer Cyclical
• Sector Strength: 64
• Industry: Auto - Parts
• EPS (TTM): -0.19
• Shares Outstanding: 17,326,733
• 10 Day Avg. Volume: 12,276
• 30 Day Avg. Volume: 7,690
• PEG Ratio: -0.10
• Price to Book (P/B): 0.41
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -4.28
• Enterprise Value/Market Cap: 0.78
• Enterprise Value/Revenue: 0.06
• Enterprise Value/Gross Profit: 1.21
• Enterprise Value/Ebitda: -0.91
• 1Y Price Target: $7.51
• Price Target Upside: 36.48% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3

• Rating: 54 Neutral
• Price Target: C$5.50 ▲(0.00%Upside)

Westport Fuel Systems' stock score is moderately low, primarily due to its challenging financial performance and valuation concerns. However, the positive momentum in technical indicators and strategic shifts highlighted in the earnings call and corporate events provide some optimism for future growth potential.

Positive Factors

Gross Margins

Gross margins for the quarter were 21.5%, compared to 15.1% in 1Q24.

Strategic Opportunities

Westport Fuel Systems could take advantage of the restructured balance sheet to pursue acquisitions that could support commercialization efforts.

Technology and Innovation

The company's future business model is expected to be focused on leveraging its HPDI technology to develop products for alternative fuel solutions, including LNG, CNG, RNG, and hydrogen systems.

Negative Factors

Commercialization Stage

The company should now be viewed as an early-stage commercialization story where topline performance may not be material in the near term.

Divestiture Impact

The company's divestiture of its interest in Westport Fuel Systems Italia S.r.l., including the Light-Duty segment, is a primary reason for lowering the price target to $7.

Revenue Performance

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 shows improvement in gross profit margin and operating cash flow, but continues to face challenges with negative net income and free cash flow, indicating underlying profitability and cash generation issues. Reduced leverage is positive, yet revenue stability and profitability need focus.

Income Statement

Westport Fuel Systems has shown improvement in its gross profit margin from 14.7% to 19.0% over the last year. However, the company continues to face challenges with negative EBIT and net income, resulting in negative net profit and EBIT margins. Revenue growth has been volatile, with a decline in the latest year, indicating instability in revenue streams.

Balance Sheet

The company's debt-to-equity ratio has improved from 0.52 to 0.39, indicating reduced leverage. However, return on equity remains negative due to the negative net income. The equity ratio has slightly decreased, suggesting a moderate reliance on debt financing.

Cash Flow

Westport Fuel Systems has managed to improve its operating cash flow from a significant negative to a positive figure. However, free cash flow remains negative, reflecting ongoing challenges in generating cash after capital expenditures. The company has shown a better operating cash flow to net income ratio, but the free cash flow to net income ratio is still concerning.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	295.68M	302.30M	331.80M	305.70M	312.41M	252.50M
Gross Profit	61.09M	57.59M	48.94M	36.20M	48.15M	39.54M
EBITDA	-8.88M	-5.40M	-33.24M	-28.81M	-18.18M	-11.78M
Net Income	-10.64M	-21.84M	-49.72M	-32.70M	13.66M	-7.36M
Balance Sheet
Total Assets	295.25M	291.62M	355.75M	407.45M	471.31M	346.26M
Cash, Cash Equivalents and Short-Term Investments	32.53M	37.24M	54.75M	86.18M	124.89M	64.26M
Total Debt	50.45M	52.78M	82.83M	76.42M	97.92M	113.36M
Total Liabilities	157.65M	154.60M	195.30M	203.49M	234.89M	242.20M
Stockholders Equity	137.60M	137.03M	160.45M	203.97M	236.42M	104.06M
Cash Flow
Free Cash Flow	-13.03M	-9.74M	-28.77M	-46.11M	-57.95M	-42.27M
Operating Cash Flow	2.14M	7.18M	-13.19M	-31.58M	-43.79M	-35.15M
Investing Cash Flow	11.93M	4.47M	-15.41M	17.65M	2.29M	13.84M
Financing Cash Flow	-23.29M	-25.21M	-2.22M	-22.46M	104.73M	39.69M

Westport Fuel Systems Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 5.50
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:WPRT, the sentiment is Positive. The current price of 5.5 is above the 20-day moving average (MA) of 4.85, above the 50-day MA of 4.34, and above the 200-day MA of 5.20, indicating a bullish trend. The MACD of 0.37 indicates Negative momentum. The RSI at 75.29 is Negative, neither overbought nor oversold. The STOCH value of 82.17 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 *	62 Neutral	C$5.29B	8.34	20.23%	3.14%	3.09%	8.49%
WPRT	54 Neutral	$94.43M	―	-7.49%	―	-6.80%	78.75%
ATHR	37 Underperform	C$5.55M	―	116.24%	―	―	13.68%
FHYDF	―	$36.85M	―		―	―	―

Westport Fuel Systems Corporate Events

Westport Fuel Systems Approves Key Resolutions at Annual Meeting

Westport Fuel Systems held its Annual General and Special Meeting of Shareholders virtually, where all proposed resolutions were approved. Key decisions included the election of directors, appointment of KPMG LLP as auditors, an advisory vote on executive compensation, and the sale of Westport Fuel Systems Italia S.r.l. These approvals signify a strategic shift and operational realignment for Westport, potentially impacting its market positioning and stakeholder interests.

The most recent analyst rating on (TSE:WPRT) stock is a Buy with a C$22.00 price target. To see the full list of analyst forecasts on Westport Fuel Systems stock, see the TSE:WPRT Stock Forecast page.

Westport Fuel Systems Announces Strategic Divestment of Light-Duty Segment

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.