Yahoo Finance Westport Fuel Systems Inc’s (TSE:WPRT) Shift From Loss To Profit
Westport Fuel Systems Inc’s (TSE:WPRT): Westport Fuel Systems Inc. engineers, manufactures, and supplies alternative fuel systems and components for the transportation and industrial markets worldwide. The CA$600.1m market-cap posted a loss in its most recent financial year of -US$61.1m and a latest trailing-twelve-month loss of -US$53.5m shrinking the gap between loss and breakeven. Many investors are wondering the rate at which WPRT will turn a profit, with the big question being “when will the company breakeven?” In this article, I will touch on the expectations for WPRT’s growth and when analysts expect the company to become profitable.
See our latest analysis for Westport Fuel Systems
According to the industry analysts covering WPRT, breakeven is near. They expect the company to post a final loss in 2018, before turning a profit of US$8.3m in 2019. Therefore, WPRT is expected to breakeven roughly a couple of months from now! How fast will WPRT have to grow each year in order to reach the breakeven point by 2019? Working backwards from analyst estimates, it turns out that they expect the company to grow 82.2% year-on-year, on average, which signals high confidence from analysts. If this rate turns out to be too aggressive, WPRT may become profitable much later than analysts predict.
I’m not going to go through company-specific developments for WPRT given that this is a high-level summary, however, take into account that by and large a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
One thing I would like to bring into light with WPRT is its relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in WPRT’s case is 50.5%. Note that a higher debt obligation increases the risk in investing in the loss-making company.
Next Steps:
This article is not intended to be a comprehensive analysis on WPRT, so if you are interested in understanding the company at a deeper level, take a look at WPRT’s company page on Simply Wall St. I’ve also put together a list of relevant factors you should look at:
Valuation: What is WPRT worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether WPRT is currently mispriced by the market.
Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Westport Fuel Systems’s board and the CEO’s back ground.
Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
