Back to top

Image: Bigstock

Should AMSC Stock Be Part of Your Portfolio Ahead of Q3 Earnings?

Read MoreHide Full Article

American Superconductor Corporation (AMSC - Free Report) is expected to report its third-quarter fiscal 2024 results on Jan. 22. For the fiscal third quarter, AMSC expects revenues in the band of $55-$60 million. The Zacks Consensus Estimate is pegged at $56.85 million, indicating a rise of 44.5% from the year-ago period’s reported figure.

Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.

American Superconductor anticipates a fiscal third-quarter non-GAAP loss of not more than 5 cents per share. The consensus mark is projected at earnings of 7 cents per share, unchanged over the past 60 days. The company reported non-GAAP earnings of 3 cents per share in the year-ago quarter.

Zacks Investment Research
Image Source: Zacks Investment Research

We note that American Superconductor’s bottom line surpassed the Zacks Consensus Estimate in each of the four trailing quarters, the surprise being 328.2%, on average.

Earnings Whispers for AMSC

Our proven model does not conclusively predict an earnings beat for American Superconductor this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is not the case here. You can see the complete list of today’s Zacks #1 Rank stocks here.

Though AMSC carries a Zacks Rank #2, it has an Earnings ESP of 0.00% at present. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Factors to Note Ahead of AMSC’s Q3 Results

American Superconductor’s third-quarter performance is likely to have benefited from the recent acquisition of NWL Inc. The company acquired NWL in August 2024 in a cash-stock deal worth $56.4 million and expects it to be immediately accretive to its top and bottom lines.

American Superconductor's third-quarter results are expected to benefit from an improved business model, increased bookings and a strengthened balance sheet. The company’s strengthening operational and manufacturing capabilities are likely to have contributed well to its top-line growth in the quarter under review.

Increasing demand for its energy power and ship protection systems is expected to have positively impacted the Grid segment’s performance in the to-be-reported quarter. Its growing focus on expanding U.S. ship platforms is expected to have acted as a tailwind. The consensus estimate for Grid revenues is pegged at $50.1 million, suggesting growth of 49% year over year.

Growing shipments to Inox of both its 2-megawatt and 3-megawatt class turbines are likely to have bolstered the Wind segment’s performance in the fiscal third quarter. The consensus mark for Wind revenues is pegged at $6.8 million, indicating year-over-year growth of 18.4%. Strong momentum across renewables, mining and metals, semiconductors and military end-markets is likely to have boosted the company’s performance in the to-be-reported quarter.

However, macroeconomic uncertainties and unfavorable foreign exchange fluctuations are expected to have been concerns.

AMSC Stock Price Performance & Valuation

American Superconductor shares have outperformed the Zacks Electronics - Miscellaneous Components industry and the broader tech sector in the past year. The stock has also outperformed its peers, including Ballard Power Systems (BLDP - Free Report) , OSI Systems (OSIS - Free Report) and BWX Technologies (BWXT - Free Report) .

One-Year Price Return Performance

Zacks Investment Research
Image Source: Zacks Investment Research

Let us look at the value American Superconductor offers investors at current levels. Currently, AMSC is trading at a premium, with a forward 12-month price-to-sales (P/S) of 4.5X compared with the industry’s 2.52X. Its peers, Ballard Power Systems, OSI Systems and BWX Technologies, have a forward 12-month P/S of 5.4X, 1.62X and 3.76X, respectively.

Forward 12-Month Price-To-Sales Multiple

Zacks Investment Research
Image Source: Zacks Investment Research

Investment Thesis for AMSC Stock

American Superconductor is a promising investment, leveraging its expertise in renewable energy and power resilience. The company is strategically positioned in high-growth sectors like grid interconnections, wind energy and marine power solutions, all vital to the global shift toward cleaner and more reliable energy systems.

AMSC’s advanced grid technologies, such as D-VAR and REG systems, address the urgent need for modernized power grids, particularly as renewable energy integration increases worldwide. The August 2024 acquisition of NWL expanded its footprint into industrial and military power supply markets, diversifying revenue streams and enhancing product offerings.

By focusing on renewable energy, grid stability and defense solutions, AMSC aligns with critical global trends, offering investors a compelling opportunity to benefit from long-term growth in energy sustainability and national security.

Conclusion: Buy AMSC Stock for Now

American Superconductor’s growth story is far from over. Its leadership in alternative energy, coupled with strong product offerings and strategic partnerships, positions the company for continued success. Its robust financial performance and increasing market demand bode well for long-term prospects.

Published in