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Westport Fuel Systems (WPRT) Down 19.9% Since Earnings Report: Can It Rebound?

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A month has gone by since the last earnings report for Westport Fuel Systems Inc. (WPRT - Free Report) . Shares have lost about 19.9% in that time frame.

Will the recent negative trend continue leading up to its next earnings release, or is WPRT due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

Westport Fuel Q4 Earnings & Revenues Beat Estimates

Westport Fuel Systems' fourth-quarter 2017 adjusted net loss from continuing operations was 12 cents per share, narrower than the Zacks Consensus Estimate of a loss of 13 cents.

Also, total net loss from continuing operations in the quarter was $19.2 million from the net loss of $44.4 million in fourth-quarter 2016.

Westport Fuel Systems logged consolidated revenues of $64.2 million in the reported quarter, up 7% year over year. Also, the top line surpassed the Zacks Consensus Estimate of $55.3 million. This upside was driven by the initial shipments of the Westport HPDI 2.0 product and an increase in the value of Euro compared with the U.S. dollar.

For 2017, the company reported revenues of $247.1 million, up from the 2016 figure of $177.4 million.

During the quarter, consolidated gross margin increased to $16 million (25% of sales) from $13.1 million (23% of sales) recorded in the year-ago quarter. This improvement came from higher revenues and better operating efficiencies.

Consolidated adjusted EBITDA amounted to a negative $3.5 million compared with a negative $10.6 million in the prior-year quarter.

Segment Details

In 2017, Automotive Business Unit recorded a 39% increase in revenues to $239.4 million, primarily because of the consolidation of Fuel Systems for 12 months as opposed to seven months in 2016.

Corporate and Technology Investments Business Unit revenues were $7.7 million in 2017 compared with $5.1 million in 2016.

In 2017, CWI segment recorded 15% rise in revenues to $317.3 million, mainly on account of an increase in units sold and growth in parts revenues.

Financial Position

Westport Fuel Systems had cash and cash equivalents of $71.8 million as of Dec 31, 2017, up from $60.9 million as of Dec 31, 2016.

How Have Estimates Been Moving Since Then?

Analysts were quiet during the last two month period as none of them issued any earnings estimate revisions.

VGM Scores

Currently, WPRT has a strong Growth Score of A, though it is lagging a lot on the momentum front with a C. The stock was allocated a grade of F on the value side, putting it in the bottom 20% quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Our style scores indicate that the stock is more suitable for growth investors than momentum investors.

Outlook

WPRT has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.


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