American Superconductor Corporation (AMSC Quick QuoteAMSC - Free Report) is scheduled to report its second-quarter fiscal 2024 results on Oct. 30.

For the fiscal second quarter, AMSC expects revenues in the band of $50-$55 million. The Zacks Consensus Estimate is pegged at $50.9 million, indicating a rise of 49.7% from the year-ago period’s reported figure.

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American Superconductor anticipates a fiscal second-quarter non-GAAP loss of not more than 5 cents per share. The consensus mark is projected at earnings of 4 cents per share, unchanged over the past 60 days. The company reported break-even earnings in the year-ago quarter.

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We note that American Superconductor’s bottom line surpassed the Zacks Consensus Estimate in each of the four trailing quarters, the surprise being 169.8%, on average.

Earnings Whispers for AMSC

Our proven model does not conclusively predict an earnings beat for American Superconductor this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is not the case here. You can see the complete list of today’s Zacks #1 Rank stocks here.

Though AMSC carries a Zacks Rank #3, it has an Earnings ESP of 0.00% at present. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Factors Likely to Influence AMSC’s Quarterly Performance

American Superconductor’s second-quarter performance is likely to have benefited from the recent acquisition of NWL Inc. The company acquired NWL in August 2024 in a cash-stock deal worth $56.4 million and expects it to be immediately accretive to its top and bottom lines. Excluding the NWL business, AMSC had forecasted second-quarter revenues in the range of $38-$42 million.

American Superconductor's second-quarter results are expected to benefit from an improved business model, increased bookings and a strengthened balance sheet. The company’s strengthening operational and manufacturing capabilities are likely to have contributed well to its top-line growth in the quarter under review.

Increasing demand for its energy power and ship protection systems is expected to have positively impacted the Grid segment’s performance in the to-be-reported quarter. Its growing focus on expanding U.S. ship platforms is expected to have acted as a tailwind. The consensus estimate for Grid revenues is pegged at $44.5 million, suggesting growth of 55.9% year over year.

Growing shipments to Inox of both its 2-megawatt and 3-megawatt class turbines are likely to have bolstered the Wind segment’s performance in the fiscal second quarter. The consensus mark for Wind revenues is pegged at $6.8 million, indicating year-over-year growth of 23%. Strong momentum across renewables, mining and metals, semiconductors and military end-markets is likely to have boosted the company’s performance in the to-be-reported quarter.

However, macroeconomic uncertainties and unfavorable foreign exchange fluctuations are expected to have been concerns.

AMSC Stock Price Performance & Valuation

American Superconductor shares have outperformed the Zacks Electronics - Miscellaneous Components industry as well as the broader tech sector in the year-to-date period. The stock has also underperformed its peers, including Ballard Power Systems (BLDP Quick QuoteBLDP - Free Report) , OSI Systems (OSIS Quick QuoteOSIS - Free Report) and BWX Technologies (BWXT Quick QuoteBWXT - Free Report) .

YTD Price Return Performance

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Let us look at the value American Superconductor offers investors at current levels. Currently, AMSC is trading at a premium, with a forward 12-month price-to-sales (P/S) of 3.9X compared with the industry’s 2.47X. Its peers, Ballard Power Systems, OSI Systems and BWX Technologies, have a forward 12-month P/S of 4.21X, 1.38X and 4.08X, respectively.

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Investment Thesis for American Superconductor Stock

American Superconductor presents a compelling investment opportunity due to its strong positioning in the renewable energy and power resiliency markets. AMSC has been expanding its portfolio across diverse high-growth sectors, including grid interconnections, wind energy systems and marine power solutions. The company’s robust grid solutions, such as D-VAR and REG systems, are highly relevant as global demand for power grid modernization rises, especially with increased renewable energy integration.

American Superconductor’s acquisition of NWL broadened its footprint into the industrial and military power supply markets, enhancing product depth and market reach. This acquisition, coupled with expanding customer relationships, strengthens AMSC's financial outlook. With a focus on renewable energy, grid resilience and defense solutions, the company is poised for sustained growth in today’s energy-conscious and security-focused market.

Conclusion: Hold AMSC Stock for Now

American Superconductor’s growth story is far from over. Its leadership in alternative energy, coupled with strong product offerings and strategic partnerships, positions the company for continued success. Its robust financial performance and increasing market demand bode well for long-term prospects.

Despite these positives, American Superconductor faces near-term challenges, including stretched valuations and potential pressures on margins as it invests in expanding its market reach. While the long-term growth outlook remains promising, these factors suggest that a hold approach is prudent at present. Monitoring how the company manages costs and capitalizes on its NWL acquisition for growth in industrial power supply will provide better insight into its capacity for sustained profitability, making patience key for existing investors.