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

About a month has passed since the company’s last earnings report Westport Fuel Systems Inc. WPRT. The stock has lost about 12.4% in that time.

Will the recent negative trend continue until the next earnings release, or is WPRT due for a breakout? Before we dive into the recent reaction from investors and analysts, let’s take a quick look at the company’s most recent earnings report in order to get a better handle on the important factors influencing the situation.

Westport Fuel’s first-quarter earnings and revenues topped estimates

Westport Fuel Systems’ adjusted net loss from continuing operations for the first quarter of 2018 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 the first quarter of 2017.

Additionally, total net loss from continuing operations for the reported quarter was $12.7 million, compared to a net loss of $12.8 million in the first quarter of 2017.

During the quarter, Westport Fuel Systems reported consolidated revenues of $67.6 million, up 13% year-over-year. Additionally, earnings surpassed the Zacks Consensus Estimate of $61.1 million. This improvement was driven by the appreciation of the euro against the US dollar, solid sales in the European aftermarket and delayed original equipment manufacturing (OEM) and the launch of the Westport HPDI 2.0 product.

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

Consolidated adjusted EBITDA was -$3.5 million compared to -$4.1 million in the prior-year quarter.

Segment details

The company announced that from January 2018, with the commercial launch of Westport HPDI 2.0, it will manage and report performance across three segments: Transportation, CWI Joint Venture and Corporate.

In the first quarter of 2018, CWI’s revenue decreased by $18.5 million compared to the same period last year to $52.2 million. This is mainly due to lower volumes.

How have estimates changed since then?

Last month, investors saw a downward trend in new estimates. There was one lower revision in the current quarter. Last month, the consensus estimate moved down 100% due to these changes.

Westport Fuel Systems Inc. Price and Consensus

Westport Fuel Systems Inc. Price and Consensus | Quote from Westport Fuel Systems Inc

VGM results

Right now, WPRT has a weak growth score of D, but its momentum is doing much better at A. However, the stock is rated F on the value side, putting it in the fifth quintile for this investment strategy.

Overall, the company’s overall VGM score is F. If you’re not focused on one strategy, this score should interest you.

The company’s shares are only suitable for dynamics based on the results of our styles.

Perspectives

Estimates for the stock have generally been trending lower, and the magnitude of this revision indicates a shift to the downside. Notably, WPRT carries a Zacks Rank #2 (Buy). We expect an above-average rate of return on shares in the coming months.

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