We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Here's Why You Should Retain Westport (WPRT) Stock for Now
Read MoreHide Full Article
Westport Fuel Systems Inc. (WPRT - Free Report) is likely to benefit from its HPDI technology and Euro 6 and Euro 7 LPG programs amid headwinds from delayed production in China and strong competition.
Let’s find out why this Zacks Rank #3 (Hold) stock is worth retaining at the moment.
HPDI Technology, LPG Programs to Aid Results
Westport’s portfolio of eco-friendly product mix is set to boost prospects amid climate change concerns. Its HPDI fuel system offers an environment-friendly and robust performance for heavy-duty trucks, thereby benefiting the company from an increased transition to green transportation solutions.
The firm expects HPDI volumes to be a significant driver of revenues. Collaboration with Volvo to accelerate the commercialization and global adoption of Westport's HPDI fuel system technology for long-haul and off-road applications augurs well. Westport has signed an investment agreement for its HDPI technology with Volvo in the first quarter and expects to close the HDPI joint venture with Volvo in the second quarter. The HPDI technology is poised to bode well for the company.
In 2022, Westport was awarded two programs to develop and supply LPG systems for several vehicle applications for a global OEM. The Euro 6 and Euro 7 LPG programs are projected to generate nearly EUR255 million in revenues through 2028. The deliveries for the Euro 6 program commenced in the first quarter, while the deliveries of Euro 7 are expected to start soon.
Increased support and investments in alternative fuel bode well for Westport. Government policies in major regions like Europe and North America favor the use of hydrogen as a fuel source. In Canada, Alberta has committed $57 million to developing hydrogen power. Additionally, Air Products has pledged to build hydrogen refueling stations along a key transportation route in the province. These actions underscore hydrogen's crucial role in decarbonizing heavy-duty transport.
The company is restructuring its operations in India to improve its business position and generate positive cash flow for the first time. By strategically reducing headcount, WPRT aims to streamline its workforce for greater operational agility. Additionally, it is decreasing reliance on external consultants, shifting toward internal expertise and resource optimization, and making changes to production lines to reduce manufacturing costs.
The low debt level of the natural gas fuel tech company is another positive. Long-term debt decreased to $30.36 million at the end of the first quarter from $30.9 million as of Dec 31, 2023. Westport's total debt-to-capital ratio is 0.23, lower than the auto sector’s 0.51. The company’s current ratio of 1.84 is higher than the auto sector’s 1.27, signifying solid liquidity levels.
Delayed Production, Strong Competition Ail
In China, the company anticipates production to begin in the second quarter of 2025 instead of late 2024, as originally expected. The longer timeline to complete the certification of the initial products, per the new regulations associated with hydrogen components, is causing delays. Delays in production may hurt top-line growth. The company’s products face significant competition from other alternative powertrain technologies and existing technologies, particularly aftermarket kit providers. As the market for natural gas engine products grows, this competition is likely to intensify. New technological developments may negatively impact the development or sales of some or all of Westport's products, thereby potentially making them noncompetitive or obsolete.
The Zacks Consensus Estimate for GELYY’s 2024 sales indicates year-over-year growth of 36.6%. The earnings per share (EPS) estimates for 2024 and 2025 have moved up 34 cents and 54 cents, respectively, in the past 60 days.
The consensus estimate for BLBD’s 2024 sales and earnings implies year-over-year growth of 17.29% and 155.14%, respectively. The EPS estimates for 2024 and 2025 have improved 63 cents and 69 cents, respectively, in the past 30 days.
The Zacks Consensus Estimate for OSK’s 2024 sales and earnings indicates year-over-year growth of 9.86% and 10.72%, respectively. The EPS estimates for 2024 and 2025 have improved 72 cents and 67 cents, respectively, in the past 30 days.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Here's Why You Should Retain Westport (WPRT) Stock for Now
Westport Fuel Systems Inc. (WPRT - Free Report) is likely to benefit from its HPDI technology and Euro 6 and Euro 7 LPG programs amid headwinds from delayed production in China and strong competition.
Let’s find out why this Zacks Rank #3 (Hold) stock is worth retaining at the moment.
HPDI Technology, LPG Programs to Aid Results
Westport’s portfolio of eco-friendly product mix is set to boost prospects amid climate change concerns. Its HPDI fuel system offers an environment-friendly and robust performance for heavy-duty trucks, thereby benefiting the company from an increased transition to green transportation solutions.
The firm expects HPDI volumes to be a significant driver of revenues. Collaboration with Volvo to accelerate the commercialization and global adoption of Westport's HPDI fuel system technology for long-haul and off-road applications augurs well. Westport has signed an investment agreement for its HDPI technology with Volvo in the first quarter and expects to close the HDPI joint venture with Volvo in the second quarter. The HPDI technology is poised to bode well for the company.
In 2022, Westport was awarded two programs to develop and supply LPG systems for several vehicle applications for a global OEM. The Euro 6 and Euro 7 LPG programs are projected to generate nearly EUR255 million in revenues through 2028. The deliveries for the Euro 6 program commenced in the first quarter, while the deliveries of Euro 7 are expected to start soon.
Increased support and investments in alternative fuel bode well for Westport. Government policies in major regions like Europe and North America favor the use of hydrogen as a fuel source. In Canada, Alberta has committed $57 million to developing hydrogen power. Additionally, Air Products has pledged to build hydrogen refueling stations along a key transportation route in the province. These actions underscore hydrogen's crucial role in decarbonizing heavy-duty transport.
The company is restructuring its operations in India to improve its business position and generate positive cash flow for the first time. By strategically reducing headcount, WPRT aims to streamline its workforce for greater operational agility. Additionally, it is decreasing reliance on external consultants, shifting toward internal expertise and resource optimization, and making changes to production lines to reduce manufacturing costs.
The low debt level of the natural gas fuel tech company is another positive. Long-term debt decreased to $30.36 million at the end of the first quarter from $30.9 million as of Dec 31, 2023. Westport's total debt-to-capital ratio is 0.23, lower than the auto sector’s 0.51. The company’s current ratio of 1.84 is higher than the auto sector’s 1.27, signifying solid liquidity levels.
Delayed Production, Strong Competition Ail
In China, the company anticipates production to begin in the second quarter of 2025 instead of late 2024, as originally expected. The longer timeline to complete the certification of the initial products, per the new regulations associated with hydrogen components, is causing delays. Delays in production may hurt top-line growth. The company’s products face significant competition from other alternative powertrain technologies and existing technologies, particularly aftermarket kit providers. As the market for natural gas engine products grows, this competition is likely to intensify. New technological developments may negatively impact the development or sales of some or all of Westport's products, thereby potentially making them noncompetitive or obsolete.
Westport Fuel Systems Inc. Price and Consensus
Westport Fuel Systems Inc. price-consensus-chart | Westport Fuel Systems Inc. Quote
Stocks to Consider
Some better-ranked stocks in the auto space are Geely Automobile Holdings Limited (GELYY - Free Report) , Blue Bird Corporation (BLBD - Free Report) and Oshkosh Corporation (OSK - Free Report) , each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for GELYY’s 2024 sales indicates year-over-year growth of 36.6%. The earnings per share (EPS) estimates for 2024 and 2025 have moved up 34 cents and 54 cents, respectively, in the past 60 days.
The consensus estimate for BLBD’s 2024 sales and earnings implies year-over-year growth of 17.29% and 155.14%, respectively. The EPS estimates for 2024 and 2025 have improved 63 cents and 69 cents, respectively, in the past 30 days.
The Zacks Consensus Estimate for OSK’s 2024 sales and earnings indicates year-over-year growth of 9.86% and 10.72%, respectively. The EPS estimates for 2024 and 2025 have improved 72 cents and 67 cents, respectively, in the past 30 days.