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With the business potentially at an important milestone, we thought we'd take a closer look at Westport Fuel Systems Inc.'s (TSE:WPRT) future prospects. Westport Fuel Systems Inc. engages in the engineering, manufacturing, and supplying alternative fuel systems and components for use in transportation applications in Europe, Asia, North America, South America, and internationally. The CA$96m market-cap company announced a latest loss of US$22m on 31 December 2024 for its most recent financial year result. As path to profitability is the topic on Westport Fuel Systems' investors mind, we've decided to gauge market sentiment. In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.
Westport Fuel Systems is bordering on breakeven, according to the 5 Canadian Machinery analysts. They anticipate the company to incur a final loss in 2026, before generating positive profits of US$1.5m in 2027. The company is therefore projected to breakeven around 2 years from today. How fast will the company have to grow each year in order to reach the breakeven point by 2027? Working backwards from analyst estimates, it turns out that they expect the company to grow 60% year-on-year, on average, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
We're not going to go through company-specific developments for Westport Fuel Systems given that this is a high-level summary, however, bear in mind that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
View our latest analysis for Westport Fuel Systems
Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital prudently, with debt making up 25% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.
Next Steps:
There are too many aspects of Westport Fuel Systems to cover in one brief article, but the key fundamentals for the company can all be found in one place – Westport Fuel Systems' company page on Simply Wall St. We've also compiled a list of pertinent aspects you should further research:
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Historical Track Record: What has Westport Fuel Systems' performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
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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' board and the CEO’s background.
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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.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.