Westport Fuel's Revenues To Grow At 10-Year CAGR Of 17%, Analyst Forecasts

H.C. Wainwright analyst Amit Dayal reiterated a Buy rating on Westport Fuel Systems Inc WPRT, raising the price target to $30 from $7.

Westport announced the completion of the consolidation of its common shares based on one new post-consolidation common share for every ten pre-consolidation common shares in June 2023.

The massive hike in target price is to reflect the consolidation of the company's shares.

The analyst applauds the company's signing of a non-binding letter of intent (LoI) to establish a joint venture (JV) for the continued commercialization of the company's HPDI fuel system technology. 

Dayal believes the completion of this transaction, expected in the first half of 2024, should be favorable to HPDI sales expansion and provide investors with greater transparency on business metrics associated with this segment. 

However, the analyst does not anticipate any meaningful impact on its near-term financial expectations for the company as a result of this development. 

Going ahead, the analyst is projecting the company's revenues to increase from $329.2 million in 2023 to $1.6 billion in 2033 at a ten-year CAGR of approximately 16.9%.

Dayal expects WPRT's gross margins to ramp from 16.9% in 2023 and exceed 25.0% in 2028 and beyond.

The analyst forecasts an increase in operating expenses at a ten-year CAGR of 4.0% from $89.1 million in 2023 to $131.5 million in 2033.

Price Action: WPRT shares are trading higher by 7.2% to $10.64 on the last check Wednesday.