A month has gone by since the last earnings report for Westport Innovations (WPRT Quick QuoteWPRT - Free Report) . Shares have lost about 0.6% in that time frame, outperforming the S&P 500.

But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is Westport due for a breakout? Well, first let's take a quick look at its most recent earnings report in order to get a better handle on the recent drivers for Westport Fuel Systems Inc. before we dive into how investors and analysts have reacted as of late.

Westport Q2 Loss Wider-Than-Expected

Westport incurred a loss of 53 cents per share in the second quarter of 2026, wider than the Zacks Consensus Estimate of a loss of 45 cents. The company had incurred a loss of 29 cents a year earlier.

WPRT reported revenues of $2.72 million, which declined 78.3% year over year but beat the consensus estimate of $2 million by 44.5%. Bottom-line pressure reflected warrant-liability revaluation, financing costs and foreign exchange losses, while Cespira's quarterly revenues jumped 125% to $27.07 million.

Operating Loss Widens on Added Charges

The year-over-year top-line comparison reflected the planned end of the Heavy-Duty OEM transitional service agreement with Cespira after the second quarter of 2025, leaving that segment with no sales activity this quarter. Gross profit fell to $0.13 million from $0.84 million, while gross margin slipped to 5% from 7%.

Research and development expenses declined to $1.21 million from $1.57 million, while general and administrative expenses edged up to $4.17 million from $4.11 million. The operating loss widened to $7.21 million from $1.01 million. WPRT also recorded a $1.69 million foreign exchange loss, a $1.50 million warrant-liability fair-value loss and $1.09 million of financing transaction costs. Adjusted EBITDA was negative $6.27 million compared with negative $1.02 million.

Cespira Scales Across Revenue Streams

Cespira's product revenues rose 127% to $18.92 million, supported by significantly higher system volumes. Aftermarket revenues increased 108% to $5.52 million, while service revenues climbed 156% to $2.64 million as project milestones were achieved.

The mix and higher volumes materially improved profitability. Gross profit reached $3.81 million versus a gross loss of $1.93 million, and gross margin improved to 14% from negative 16%. Cespira's net loss narrowed 65% to $2.38 million as revenues scaled, material costs declined and labor efficiency improved.

Controls Business Works Through Backlog

High-Pressure Controls revenues declined 6% year over year to $2.17 million, mainly because of lower sales volume. Gross profit was $0.13 million compared with $0.11 million, while gross margin improved to 5% from 4%. Westport ended the quarter with customer demand waiting to be fulfilled as output ramps at its Canadian and Chinese plants. 

The shortfall largely reflected the transfer of equipment from Europe, installation work, facility recertification and workforce training. The company characterized the first half as a transition period and expects the second half to focus on increasing production and filling backlog, with no additional major bottlenecks currently identified.

Liquidity Improves but Going-Concern Risk Remains

Cash and cash equivalents ended June were $23.95 million, down from $24.50 million as of March 31. Operating activities used $4.56 million of cash, while investing activities used $3.56 million, largely reflecting Cespira funding. Financing activities provided $8.30 million after the June equity and warrant transaction, partly offset by debt repayment.

Long-term debt, including the current portion, was $0.97 million. Despite the financing, Westport said projected cash resources are not sufficient to fund operations through the next 12 months, raising substantial doubt about its ability to continue as a going concern. The company is evaluating public-market, debt and other financing alternatives.

WPRT Targets 2027 Cespira Break-Even

The company reiterated its expectation that Cespira can reach break-even in 2027. Westport's second-quarter capital contribution to the joint venture fell to $3.51 million from $4.19 million a year earlier, and management expects funding needs to decline as volumes rise because the venture's core overhead base is already in place. 

The development pipeline adds another layer to the growth case. Volvo is funding Cespira's hydrogen HPDI development program, while on-road testing is underway and a European commercial launch is targeted before 2030. Separately, a significant Cespira engineering project is expected to finish in the fourth quarter of 2026 ahead of the planned Euro 7 product launch. 

How Have Estimates Been Moving Since Then?

Since the earnings release, investors have witnessed a upward trend in estimates revision.

VGM Scores

At this time, Westport has a subpar Growth Score of D, however its Momentum Score is doing a bit better with a C. However, the stock was allocated a score 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 F. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. Interestingly, Westport has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

Westport is part of the Zacks Automotive - Original Equipment industry. Over the past month, Dana (DAN Quick QuoteDAN - Free Report) , a stock from the same industry, has gained 2.5%. The company reported its results for the quarter ended June 2026 more than a month ago.

Dana reported revenues of $2.01 billion in the last reported quarter, representing a year-over-year change of +3.9%. EPS of $0.19 for the same period compares with $0.05 a year ago.

Dana is expected to post earnings of $0.70 per share for the current quarter, representing a year-over-year change of +311.8%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.

Dana has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of A.