Breaking Down Westport Fuel Systems Inc. (WPRT) Financial Health: Key Insights for Investors

Are you keeping a close watch on Westport Fuel Systems Inc. (WPRT) and wondering about its financial stability? In 2023, the company faced a $49.7 million net loss, but don't let that number tell the whole story. By the end of 2024, Westport had net cash provided by operating activities of $7.2 million, marking a $20.4 million improvement. With strategic moves like the Cespira joint venture with Volvo Group and a focus on high-pressure direct injection (HPDI) technology, can Westport turn the tide and achieve sustainable growth? Keep reading to explore the key financial insights that could shape your investment decisions.

Westport Fuel Systems Inc. (WPRT) Revenue Analysis

Understanding Westport Fuel Systems Inc.'s revenue streams involves examining its primary sources, growth trends, and the contributions of its business segments. This analysis is crucial for investors seeking insights into the company's financial health and future prospects. For further information, you might find this resource helpful: Exploring Westport Fuel Systems Inc. (WPRT) Investor Profile: Who’s Buying and Why?

A breakdown of Westport Fuel Systems Inc.'s primary revenue sources includes:

• Original Equipment Manufacturer (OEM): Sales of alternative fuel systems and components to vehicle manufacturers.
• Independent Aftermarket (IAM): Sales of components and systems for aftermarket conversions and servicing.
• Electronics: Development and sales of fuel injection systems, sensors, and controls.
• Fuel Storage: Development and sales of compressed natural gas (CNG), liquefied petroleum gas (LPG), and hydrogen fuel storage systems.

Analyzing year-over-year revenue growth rates provides a view of Westport Fuel Systems Inc.'s performance trajectory. Recent financial reports indicate the following trends:

Westport Fuel Systems Inc. reported total revenue of $75.4 million for the year 2024, a decrease of $20.3 million compared to $95.7 million in the year 2023. The decrease was primarily due to:

• A $14.4 million decrease in the delayed timing of OEM programs and decreased customer demand.
• A $3.1 million decrease due to the sale of the BAF business in 2023.
• A $2.8 million decrease in IAM sales due to decreased customer demand.

The contribution of different business segments to Westport Fuel Systems Inc.'s overall revenue is a key indicator of the company's diversification and reliance on specific markets. Here’s a summarized view based on the latest financial data:

For the year 2024, Westport Fuel Systems Inc. experienced significant changes in its revenue streams. These shifts reflect strategic realignments and market dynamics:

• Sale of BAF Business: The sale of the BAF business in 2023 led to a noticeable decrease in revenue in 2024 by $3.1 million.
• Decreased Customer Demand: Reduced demand in both OEM and IAM sectors contributed to a revenue decline of $14.4 million and $2.8 million, respectively.
• Impact of Delayed OEM Programs: Delays in OEM programs further impacted revenue, highlighting the sensitivity of Westport Fuel Systems Inc.’s earnings to program timelines.

A more detailed breakdown of the revenue changes is summarized in the table below:

Westport Fuel Systems Inc. (WPRT) Profitability Metrics

Profitability is a critical indicator of a company's financial health, revealing how efficiently it generates earnings from its revenues. For Westport Fuel Systems Inc. (WPRT), examining the gross profit, operating profit, and net profit margins provides valuable insights into its operational effectiveness and overall financial performance. Analyzing these metrics over time and comparing them against industry benchmarks helps stakeholders understand the company's competitive positioning and sustainability.

Here's an overview of Westport Fuel Systems Inc.'s profitability, incorporating available data:

• Gross Profit: In 2024, Westport Fuel Systems Inc. reported a gross profit of $51.4 million.
• Operating Income (Loss): The company experienced an operating loss of $21.9 million in 2024.
• Net Income (Loss): Westport Fuel Systems Inc.'s net loss for 2024 was $31.7 million.

To provide a clearer picture, let's delve into the profitability margins:

• Gross Profit Margin: The gross profit margin for 2024 stood at 23.4%.
• Operating Profit Margin: The operating profit margin was -10.0% in 2024.
• Net Profit Margin: The net profit margin was -14.4% for the same period.

Here is a table summarizing Westport Fuel Systems Inc.'s profitability metrics for 2024:

The gross profit margin of 23.4% indicates the company's efficiency in managing its cost of goods sold relative to its revenue. However, the negative operating and net profit margins suggest that the company's operating expenses and other factors are significantly impacting its bottom line. Further analysis into cost management and revenue growth strategies is essential to understand the trajectory of Westport Fuel Systems Inc.'s profitability.

Explore more insights in our comprehensive analysis: Breaking Down Westport Fuel Systems Inc. (WPRT) Financial Health: Key Insights for Investors

Westport Fuel Systems Inc. (WPRT) Debt vs. Equity Structure

Understanding how Westport Fuel Systems Inc. (WPRT) finances its operations and growth is crucial for investors. The balance between debt and equity reveals insights into the company's financial risk and stability.

As of the most recent data, Westport Fuel Systems Inc. (WPRT) has a mix of both short-term and long-term debt. Analyzing these components separately provides a clearer picture:

• Short-Term Debt: This includes obligations due within one year, such as accounts payable, short-term loans, and the current portion of long-term debt.
• Long-Term Debt: This consists of obligations extending beyond one year, like bonds, long-term loans, and other financing agreements.

The specific amounts for these categories can fluctuate, reflecting the company's ongoing financial activities. For instance, recent financial statements would detail the exact figures for short-term and long-term debt, offering a precise snapshot of its obligations.

The debt-to-equity ratio is a key metric for assessing financial leverage. It compares a company's total debt to its shareholders' equity, indicating how much debt is used to finance assets relative to the value of equity. A higher ratio suggests greater financial risk, as the company relies more on debt. Conversely, a lower ratio indicates a more conservative approach.

Westport Fuel Systems Inc. (WPRT)'s debt-to-equity ratio can be benchmarked against industry standards to determine whether it's in line with its peers. Significant deviations might signal potential concerns or strengths. To get the most current data, refer to recent financial reports and industry analyses.

Information on any recent debt issuances, credit ratings, or refinancing activities will shed light on how Westport Fuel Systems Inc. (WPRT) manages its debt. Credit ratings, provided by agencies like Standard & Poor's or Moody's, reflect the creditworthiness of the company, affecting its borrowing costs and investor confidence. Refinancing activities can indicate efforts to lower interest rates or extend debt maturities.

Balancing debt financing and equity funding is a strategic decision. Debt can provide capital for growth without diluting ownership, but it also introduces fixed payment obligations and increases financial risk. Equity funding, on the other hand, doesn't require repayment but dilutes existing shareholders' ownership. Westport Fuel Systems Inc. (WPRT)'s approach to this balance reflects its growth strategy, risk tolerance, and market conditions.

For additional insights into Westport Fuel Systems Inc. (WPRT) and its investors, check out this related article: Exploring Westport Fuel Systems Inc. (WPRT) Investor Profile: Who’s Buying and Why?

Understanding these elements provides a comprehensive view of Westport Fuel Systems Inc. (WPRT)'s financial health and its approach to financing growth.

Westport Fuel Systems Inc. (WPRT) Liquidity and Solvency

Analyzing Westport Fuel Systems Inc.'s (WPRT) financial health requires a close look at its liquidity and solvency, which indicates its ability to meet short-term and long-term obligations. Here’s an overview based on the latest available financial data.

Assessing Westport Fuel Systems Inc.'s Liquidity:

Liquidity ratios offer insights into Westport Fuel Systems Inc.'s ability to cover its short-term liabilities with its current assets. Key metrics include the current and quick ratios.

• Current Ratio: The current ratio is calculated by dividing current assets by current liabilities. A ratio of greater than 1 indicates that a company has more current assets than current liabilities.
• Quick Ratio: The quick ratio, also known as the acid-test ratio, measures a company's ability to meet its short-term obligations with its most liquid assets. It excludes inventories from current assets to provide a more conservative view of liquidity.

Working Capital Trends:

Monitoring working capital trends helps in understanding the operational efficiency and short-term financial health of Westport Fuel Systems Inc.. Working capital is the difference between a company's current assets and current liabilities. Effective management of working capital ensures that the company has enough resources to meet its short-term obligations and invest in growth.

Cash Flow Statements Overview:

Cash flow statements provide a detailed look at where Westport Fuel Systems Inc. is generating and using cash. These statements are divided into three main activities:

• Operating Activities: Cash flow from operating activities indicates the cash a company generates from its core business operations.
• Investing Activities: Cash flow from investing activities includes the purchase and sale of long-term assets, such as property, plant, and equipment (PP&E).
• Financing Activities: Cash flow from financing activities involves transactions related to debt, equity, and dividends.

Analyzing these cash flow trends provides a comprehensive view of Westport Fuel Systems Inc.'s financial stability. Consistent positive cash flow from operating activities is generally a good sign, while significant investments or financing activities can indicate growth initiatives or changes in capital structure.

Here is a sample table illustrating how the cash flow activities might look (Note: This is illustrative and not actual data):

Potential Liquidity Concerns or Strengths:

Investors should monitor Westport Fuel Systems Inc.'s liquidity position for any potential concerns or strengths:

• Strengths: A high current ratio, positive working capital, and positive cash flow from operating activities are indicators of strong liquidity.
• Concerns: Declining cash reserves, negative working capital, or negative cash flow from operations could signal liquidity issues.

For more insights into Westport Fuel Systems Inc.'s (WPRT) strategic direction, see Mission Statement, Vision, & Core Values of Westport Fuel Systems Inc. (WPRT).

Westport Fuel Systems Inc. (WPRT) Valuation Analysis

Determining whether Westport Fuel Systems Inc. (WPRT) is overvalued or undervalued requires analyzing several key financial metrics and market indicators. Here's a breakdown:

Price-to-Earnings (P/E) Ratio:

• The latest P/E ratio for Westport Fuel Systems is -3.0x.
• At the end of 2022, the company's P/E ratio was -4.10.
• As of April 2025, the trailing twelve months (TTM) P/E ratio is -0.939739.

Given that Westport Fuel Systems has a negative P/E ratio, it indicates the company has negative earnings. This makes it difficult to assess valuation based on earnings relative to stock price. When a company isn't profitable, the P/E ratio is not a useful valuation metric. The P/E ratio for December 31, 2024 was listed as 763.74.

Price-to-Book (P/B) Ratio:

• The price-to-book ratio for Westport Fuel Systems Inc. is 0.36.

A P/B ratio of 0.36 suggests that the stock may be undervalued, as it is trading at less than its book value. However, it's essential to consider the quality of the assets and the company's financial health when interpreting this metric. For December 31, 2024 the Price/Book was 0.36.

Enterprise Value-to-EBITDA (EV/EBITDA) Ratio:

• The enterprise value to EBITDA is 37.71 as of December 31, 2024.
• The Enterprise Value/EBITDA is -5.7x.

The EV/EBITDA ratio can provide a more comprehensive valuation measure, especially when a company has significant debt. A lower ratio might indicate better value, but it should be compared against industry peers. A high EV/EBITDA ratio of 37.71 may suggest the company is overvalued compared to its earnings before interest, taxes, depreciation, and amortization. The EV / Sales is 0.21.

Stock Price Trends:

• As of April 17, 2025, the stock price is $2.85.
• The 52-week high is $6.60, and the 52-week low is $2.50.
• The stock price has decreased by -51.49% in the last 52 weeks.

A significant decrease in stock price over the past 52 weeks could suggest market concerns about the company's performance or future prospects. The current price of $2.94 as of April 5, 2025, is below the 52-week high, suggesting a potential buying opportunity if the investor believes the company will recover. As of March 28, 2025, the share price of Westport Fuel Systems Inc. was $3.86 per share.

Dividend Yield and Payout Ratios:

• Westport Fuel Systems does not pay a dividend.
• The dividend yield is 0.00%.

The absence of dividends means investors are not receiving income from holding the stock, which may affect its attractiveness to some investors. The current TTM dividend payout for Westport Fuel Systems (WPRT) as of April 17, 2025 is $0.00. The dividend yield history shows no dividend payouts.

Analyst Consensus:

• The analyst consensus on the stock is 'Hold'.
• The average price target is $6.33, which is an increase of 120.56% from the latest price.
• Based on 3 analysts ratings, the analyst consensus is a moderate buy.
• The average price target from 3 analysts is $7.613.

The consensus rating of 'Hold' suggests that analysts are neutral on the stock. However, the average price target indicates potential upside, which could be seen as a positive sign. As of April 16, 2025, the consensus rating is Hold. Wall Street analysts have set a price target of $16.36, reflecting a 0.00% increase from the current stock price. As of April 9, 2025, the analyst consensus is a Moderate Buy with an average price target of $4.00.

In summary, the valuation of Westport Fuel Systems Inc. is complex and requires a multifaceted approach. The negative P/E ratio and lack of dividends suggest caution. However, a low P/B ratio and potential upside based on analyst price targets could indicate an opportunity for investors with a higher risk tolerance. Monitoring the company's financial performance and industry trends is crucial for making an informed investment decision.

For more insights into Westport Fuel Systems Inc., you might find this resource helpful: Mission Statement, Vision, & Core Values of Westport Fuel Systems Inc. (WPRT).

Westport Fuel Systems Inc. (WPRT) Risk Factors

Identifying and understanding the risks that Westport Fuel Systems Inc. (WPRT) faces is crucial for investors. These risks can be both internal and external, impacting the company's financial stability and future prospects. Several factors, ranging from industry competition to regulatory changes, can influence WPRT's performance.

Here's an overview of some key risks:

• Industry Competition: The alternative fuel systems market is competitive.
• Regulatory Changes: Changes in environmental regulations and governmental policies can significantly affect the demand for Westport's products.
• Market Conditions: Fluctuations in foreign exchange rates and the availability and price of natural gas and hydrogen can impact Westport's financial results.
• Operational Risks: These include the ability to successfully commercialize new products and the performance of joint ventures.
• Financial Risks: Access to capital and debt markets, along with the company's solvency, are critical financial considerations.

Recent earnings reports and filings highlight specific operational, financial, and strategic risks. For example, the missed Weichai order milestone indicates challenges in converting technical partnerships into reliable revenue streams. Additionally, the company's reliance on the sale of its Italian subsidiary to address immediate cash needs underscores its liquidity challenges. According to the Q4 and full year 2024 results, Westport reported a net loss of $21.8 million, or $1.27 per share.

Despite these challenges, Westport is actively implementing mitigation strategies. These include:

• Strategic Divestitures: The proposed divestiture of the Light-Duty business for $73.1 million is aimed at improving financial stability and enabling focused investment in core technologies.
• Operational Efficiencies: Efforts to improve margins and reduce costs have resulted in positive operating cash flow of $7.2 million for the year ended December 31, 2024, a $20.4 million improvement over 2023.
• Focus on Core Technologies: By concentrating on HPDI technology and high-pressure systems for heavy-duty applications, Westport aims to capitalize on the growing demand for decarbonization solutions in these sectors.

The table below summarizes key financial data and strategic moves:

For those interested in understanding more about Westport's direction, vision and values, more information is available at: Mission Statement, Vision, & Core Values of Westport Fuel Systems Inc. (WPRT).

Westport Fuel Systems Inc. (WPRT) Growth Opportunities

Westport Fuel Systems Inc. possesses several key growth drivers that are expected to shape its future trajectory. These include product innovations, strategic market expansions, and potential acquisitions aimed at strengthening its market position.

Product innovation is a cornerstone of Westport Fuel Systems Inc.'s growth strategy. The company continually invests in research and development to enhance its existing product lines and introduce new, cutting-edge technologies. This focus allows Westport Fuel Systems Inc. to stay ahead of the competition and meet the evolving needs of its customers. These innovations often target improved efficiency, reduced emissions, and enhanced performance of alternative fuel systems.

Market expansion is another critical component of Westport Fuel Systems Inc.'s growth plans. The company strategically targets geographic regions with increasing demand for alternative fuel solutions. Emerging markets, in particular, present significant opportunities due to rising environmental concerns and stricter emission regulations. By expanding its presence in these key markets, Westport Fuel Systems Inc. aims to capture a larger share of the global alternative fuel systems market.

Acquisitions also play a vital role in Westport Fuel Systems Inc.'s growth strategy. By acquiring complementary businesses and technologies, the company can quickly expand its product offerings and strengthen its competitive position. Strategic acquisitions can provide access to new markets, enhance technological capabilities, and create synergies that drive growth.

While specific future revenue growth projections and earnings estimates were not available in the provided search results, several strategic initiatives and partnerships are expected to drive future growth for Westport Fuel Systems Inc. These collaborations often involve partnerships with leading automotive manufacturers, technology providers, and government agencies. By working together, Westport Fuel Systems Inc. and its partners can accelerate the development and adoption of alternative fuel technologies.

Westport Fuel Systems Inc. possesses several competitive advantages that position it favorably for future growth:

• Technological Expertise: Westport Fuel Systems Inc. has deep expertise in alternative fuel systems, including CNG, LNG, and hydrogen.
• Strong Partnerships: The company has established strong relationships with key players in the automotive and energy industries.
• Global Presence: Westport Fuel Systems Inc. has a global footprint, with operations in key markets around the world.
• Innovative Solutions: Westport Fuel Systems Inc. is committed to developing innovative solutions that meet the evolving needs of its customers.

These advantages, combined with its strategic growth initiatives, position Westport Fuel Systems Inc. to capitalize on the growing demand for alternative fuel solutions and achieve sustainable growth in the years to come.

For more detailed insights into Westport Fuel Systems Inc.'s financial health, you can explore: Breaking Down Westport Fuel Systems Inc. (WPRT) Financial Health: Key Insights for Investors