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Westport Fuel (WPRT) Down 12.4% Since Earnings Report: Can It Rebound?

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It has been about a month since the last earnings report for Westport Fuel Systems Inc. (WPRT - Free Report) . Shares have lost about 12.4% 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’s Q1 Earnings & Revenues Beat Estimates

Westport Fuel Systems first-quarter 2018 adjusted net loss from continuing operations was 10 cents per share, narrower than the Zacks Consensus Estimate of a loss of 11 cents. Net loss per share from continuing operations was 12 cents per share in first-quarter 2017.

Also, total net loss from continuing operations in the reported quarter was $12.7 million compared with net loss of $12.8 million in first-quarter 2017.

Westport Fuel Systems logged consolidated revenues of $67.6 million in the reported quarter, up 13% year over year. Also, the top line surpassed the Zacks Consensus Estimate of $61.1 million. This upside was driven by the rise of euro vis-a-vis the U.S. dollar, solid sales in the European aftermarket and delayed original equipment manufacturing (OEM) business, and the launch of Westport HPDI 2.0 product.

During the quarter under review, consolidated gross margin decreased to $15.3 million (23% of sales) from $17.5 million (29% of sales) recorded in the year-ago quarter.

Consolidated adjusted EBITDA amounted to a negative $3.5 million compared with a negative $4.1 million in the prior-year quarter.

Segment Details

The company announced that effective January 2018, commensurate with the commercial launch of Westport HPDI 2.0, the company will manage and report results through three segments: Transportation, the CWI Joint Venture and Corporate.

In first-quarter 2018, CWI revenues decreased by $18.5 million from the same period last year to $52.2 million. This is mainly driven by lower volumes.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in fresh estimates. There has been one revision lower for the current quarter. Last month, the consensus estimate has shifted downward by 100% due to these changes.

Westport Fuel Systems Inc. Price and Consensus

 

VGM Scores

At this time, WPRT has a subpar Growth Score of D, however its Momentum is doing a lot better with an A. However, the stock was allocated a grade of F on the value side, putting it in the fifth 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.

The company's stock is suitable solely for momentum based on our styles scores.

Outlook

Estimates have been broadly trending downward for the stock and the magnitude of this revision indicates a downward shift. Notably, 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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