Westport Innovations (NASDAQ:WPRT) has had an apathetic year so far. The organization's shares have declined almost 7% so far this year. In any case, in the wake of reporting its first-quarter results in right on time in May, Westport shares have taken off surprisingly. Westport has picked up close to 40%, and it would appear that the organization is set to show signs of improvement because of the developing selection of characteristic gas vehicles. Besides, as the likes of Clean Energy Fuels (CLNE) keeps building energizing infrastructure for characteristic gas vehicles, Westport's prospects should move forward.
Westport's joint efforts with Cummins and Weichai and its partnership with Tata Motors are expected to drive its development.
Tapping China for development
The joint wander with Weichai looks like a lucrative one. Weichai is a state-possessed Chinese organization that is occupied with the research, improvement, assembling, and sale of diesel engines.
- Warning! GuruFocus has detected 2 Warning Signs with WPRT. Click here to check it out.
- WPRT 15-Year Financial Data
- The intrinsic value of WPRT
- Peter Lynch Chart of WPRT
Together, Westport and Weichai have created an influential characteristic gas motor that should serve the needs of NGVs in China.
Presently, the Chinese NGV business sector is enormous. Indeed, it is allegedly developing at a faster rate than the United States.
Since regular gas prices at Chinese refueling stations are route underneath that of diesel, the development in Ngvs in China is expected to proceed. Westport is tapping this business sector smartly by cooperating with Weichai. The new motor released by the two companies is required to go into generation one year from now, and this should drive Westport's performance going ahead.
NGV selection is strong
Also, the NGV business is required to develop at a solid pace later on, and this will be aided by a maturing armada of current vehicles. The normal age of the class 8 armada (substantial obligation) in the United States has quickened to 11 years. Because of the minimal effort and clean nature of characteristic gas, there's a possibility that companies will now pick NGVs going ahead, opening a door for Westport to increase motor sales.
Westport's strong item portfolio is relied upon to help it tap this developing market and convey revenue development of around 30% this year. Also, its new products such as the Wp580 motor administration system and the ice PACK LNG system should help it increase its entrance.
More catalysts likely to work out
Westport's joint wander with Cummins is an alternate imperative catalyst to note. As of late, the two companies declared a 12-liter characteristic gas motor with a force yield of 400 horsepower. Also, Westport is presently the largest player in the Ford QVM program with in excess of 70% of the overall industry.
Also, it has entered into a partnership with Delphi to create HPDI 2.0 fuel infusion systems. This second-era fuel infusion system for HPDI will be created in Delphi facilities under an agreement giving Westport control of key generation supplies and tooling.
Solid fundamentals to support development
Separated from having solid prospects, Westport has impressive fundamentals as well. The organization's asset report is impressive, with cash of $184 million and obligation of just $64 million. Moreover, Westport's bottom line is required to develop at a breathtaking rate of 30% per year for the following five years. The organization has solid opportunities in the characteristic gas business, and it can keep investing in new engineering because of its strong monetary record. So, investors should stay invested in Westport as it seems like a solid long haul wager.