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Westport (WPRT) Up 13.4% Since Last Earnings Report: Can It Continue?

A month has gone by since the last earnings report for Westport Innovations (WPRT). Shares have added about 13.4% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Westport due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

Westport Q3 Loss In Line, Sales Lag Estimates & Fall Y/Y

Westport incurred a loss of 7 cents per share in third-quarter 2022, in line with the Zacks Consensus Estimate but wider than a loss of 3 cents posted in the year-ago quarter. Westport registered consolidated revenues of $71.2 million in the quarter, missing the Zacks Consensus Estimate of $76 million. The top line also declined 4% from the year-ago level of $74.3 million.

Westport generated an adjusted EBITDA of negative $4.5 million in the third quarter, deteriorating from negative $1.4 million in the year-ago period.

Segmental Takeaways

Original Equipment Manufacturer (OEM): Net sales of the segment totaled 44.1 million, down from $48 million in the third quarter of 2021. The segment reported an operating loss of $7.3 million, compared with a loss of $7.4 million incurred in the year-ago period.

Independent Aftermarket (IAM): Net sales of the segment totaled $27.1 million, compared with $26.3 million in the year-ago period. In the quarter, the segment incurred an operating income of $2.2 million, rising from $0.7 million in third-quarter 2021.

Corporate Business Segment: In the reported quarter, operating loss for the segment amounted to $5.8 million, widening from a loss of $1.9 million reported in the year-earlier period.

Financials

Westport had cash and cash equivalents of $86.5 million as of Sep 30, 2022, down from $124.9 million at the end of 2021. Long-term debt decreased to $32.8 million at the end of third-quarter 2022 from $45.1 million on Dec 31, 2021. Net cash used in operating activities was $8.59 million during the quarter under review.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in fresh estimates.

The consensus estimate has shifted 21.74% due to these changes.

VGM Scores

At this time, Westport has a poor Growth Score of F, however its Momentum Score is doing a lot better with an A. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Westport has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

Westport belongs to the Zacks Automotive - Original Equipment industry. Another stock from the same industry, Gentex (GNTX), has gained 2.3% over the past month. More than a month has passed since the company reported results for the quarter ended September 2022.

Gentex reported revenues of $493.64 million in the last reported quarter, representing a year-over-year change of +23.5%. EPS of $0.31 for the same period compares with $0.32 a year ago.

Gentex is expected to post earnings of $0.39 per share for the current quarter, representing a year-over-year change of +11.4%. Over the last 30 days, the Zacks Consensus Estimate has changed +0.5%.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #4 (Sell) for Gentex. Also, the stock has a VGM Score of C.

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