WPRT - Westport Fuel Systems: No Visible Path To Profitability - Hold

2024-06-18 13:45:28 ET

Summary

• Last month, Westport Fuel Systems reported disappointing first quarter 2024 results with revenues and earnings falling well short of consensus expectations.
• On a more positive note, favorable working capital movements resulted in cash flow from operations improving substantially on a year-over-year basis.
• Subsequent to quarter-end, the company and Volvo finally launched their new HPDI joint venture which triggered a $28.4 million cash payment to Westport.
• In combination with ongoing cost-cutting efforts, the resulting liquidity boost should be sufficient to carry the company well into 2026 and potentially even beyond.
• However, with no visible path to profitability or free cash flow generation, I don't see any reason to initiate or add to existing positions at this point. Consequently, I am reiterating my "Hold" rating on the shares.

Note:

I have covered Westport Fuel Systems Inc. ( WPRT ) previously, so investors should view this as an update to my earlier articles on the company. ...

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