Westport Fuel Systems Inc. WPRT, a developer, manufacturer and supplier of advanced alternative fuel systems and components, is likely to benefit from its HPDI fuel system, Euro 6 and Euro 7 LPG program and government policies.
Let’s see why you should consider adding this Zacks Rank #2 (Buy) stock to your portfolio.
The company’s portfolio of eco-friendly products positions it to capitalize on climate change mandates across the world. Its HPDI fuel system, which is a fully integrated OEM gaseous fuels system that allows diesel engines to operate with various clean-burning fuels, offers an environment-friendly, robust performance for heavy-duty trucks, thereby positioning the company favorably as the transition to green transportation solutions intensifies. The firm expects HPDI volumes to be a significant driver of revenues. The formation of Cespira, Westport’s HPDI joint venture with Volvo, launched in June 2024, to accelerate the commercialization and global adoption of Westport's HPDI technology in its long-haul and off-road applications augurs well.
In 2022, a European OEM awarded the company two programs to develop and supply LPG systems for a number of its vehicles, known as the Euro 6 and Euro 7 LPG program. These programs are projected to generate nearly EUR255 million in revenues through 2028. Euro 6 deliveries commenced in the first quarter of 2024 and are expected to exceed the company’s delivery expectations for 2024. The Euro 7 deliveries are expected to start by mid to late 2025.
Increased support and investments in alternative fuel bode well for Westport’s prospects. Government policies in major regions like Europe and North America are favoring the use of hydrogen as a fuel source. In Canada, Alberta has committed $57 million to developing hydrogen power. Additionally, Air Products — an industrial gases giant and leader in LNG technology — has pledged to build hydrogen refueling stations along a key transportation route in the province. These actions underscore hydrogen's crucial role in decarbonizing heavy-duty transport.
The low debt level of the natural gas fuel tech company is another positive. Long-term debt decreased to $23.5 million at the end of the third quarter of 2024 from $30.96 million on Dec. 31, 2023. Westport's total debt-to-capital ratio stands at 0.21, lower than that of the auto sector’s 0.53. The company’s current ratio of 1.60 is higher than the auto sector’s 1.25, signifying solid liquidity levels.
Some other top-ranked stocks in the auto space are Dorman Products, Inc. DORM, Geely Automobile Holdings Limited GELYY and Blue Bird Corporation BLBD, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for DORM’s 2024 sales and earnings suggests year-over-year growth of 3.66% and 51.98%, respectively. EPS estimates for 2024 and 2025 have improved 75 cents and 88 cents, respectively, in the past 60 days.
The Zacks Consensus Estimate for GELYY’s 2024 sales and earnings suggests year-over-year growth of 51.88% and 216.67%, respectively. EPS estimates for 2024 and have improved by a penny and 12 cents, respectively, in the past 30 days.
The Zacks Consensus Estimate for BLBD’s fiscal 2025 sales and earnings suggests year-over-year growth of 10.97% and 12.14%, respectively. EPS estimates for fiscal 2025 have improved 18 cents in the past 60 days.
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Westport Fuel Systems Inc. (WPRT) : Free Stock Analysis Report
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