American Superconductor's Earnings Surge, Future Growth Expected

June 05, 2024 at 07:00 AM EDT

wind turbine and solar grid

American Superconductor Co. (NASDAQ: AMSC) provides products, solutions, and services to help optimize and power electronics and the clean energy segment. Its power control systems help utility companies, industrial facilities, and renewable energy developers to connect, transmit, and distribute power. It’s hard to believe shares were trading as high as $751.25 during the internet bubble in February 2000.

American Superconductor competes in the computer and technology sector with Schneider Electric S.E. (OTCMKTS: SBGSF), Eaton Co. plc (NYSE: ETN), and Emerson Electric Co. (NYSE: EMR).

American Superconductor Products and Services

American Superconductor manufactures power electronics systems that convert and control power. The systems are integrated into various applications like the wind turbine grid, smart grid, and marine propulsion systems. They also develop high-temperature superconductor wires, which are superior to traditional copper wires. These wires reduce energy loss during transmission and can transmit more power with the same cable size.

American Superconductors stock chart

AMSC triggers an Ascending Triangle Breakout

The daily candlestick chart on AMSC illustrates an ascending triangle breakout pattern. The ascending trendline forms at $11.36 on April 25, 2024, marking higher lows on pullbacks toward the flat-top upper trendline at $15.93. The breakout occurred on its Q1 2024 earnings release, sending shares to a high of $20.69 on the gap to $16.59. The daily relative strength index (RSI) has climbed to the 80-band.

Fiscal Q4 2023 Earnings: A Significant YoY Improvement for American Superconductor

American Superconductor reported a Q4 2023 EPS of 6 cents, beating analyst estimates for a loss of 2 cents by 8 cents. The net loss was $1.6 million compared to a net loss of $6.9 million in the previous year. Non-GAAP income was $1.9 million or 6 cents compared to a non-GAAP net loss of $7.8 million or 28 cents in the year-ago period. Revenues surged 32.5% YoY to $42 million, beating the $37.1 million consensus estimates. Robust new energy power system sales and higher Wind segment revenues primarily drove the YoY increase. The company closed the quarter with $92.3 million in cash and cash equivalents.

Fiscal full year 2023 net loss was $11.1 million or 37 cents per share compared to a loss of $35 million and $1.26 per share in fiscal 2022. Non-GAAP net income was $600,000 compared to a non-GAAP net loss of $28.8 million or $1.03 per share for fiscal 2022.

American Superconductor's Raised Guidance

American Superconductor raised fiscal Q1 2024 revenues to $38 million to $42 million versus $35.4 million consensus estimates. EPS is not expected to exceed a loss of 1 cent compared to consensus estimates for a loss of 3 cents. Operating cash flow is expected to break even to a positive $2 million in Q1 2024.

American Superconductor's Wind and Grid Segments Drive Robust Revenue Growth

American Superconductor CEO Dave McGahn noted that revenues rose more than 30% YoY, reaching recovery levels surpassing $40 million recently. The Wind and Grid segments grew. The Wind segment revenue had a significant increase of over 125% YoY, and its Grid business saw revenue growth exceeding 30%. Gross margins doubled compared to a year ago in March. Customers are pushing for accelerated shipments, which its manufacturing and supply chain has been able to accommodate. This is evident across its Wind, Grid, Ship Protection, and New Energy business lines.

New Order Strength Driving Backlog to $140 million

The company booked over $37 million in new orders per quarter during the year. In Q4, over $33 million came from its new energy power systems. Its backlog has grown to $140 million at the end of March. The company has decided to move away from issuing orders and press releases for new energy power systems. The purpose originally was to illustrate the company's grid growth. The company is past that point with growth coming from new energy power systems and ship protection systems in addition to the return of growth for its Wind segment, along with prospective order sizes increasing.

Robust Military Sales of Ship Protection Systems

McGahn noted that they have received nearly $20 million in military revenue, including ship protection and new energy power system sales. He concluded, “We successfully delivered and tested the first ship protection system. The system is now operating on the ship. We delivered our second ship protection system, and we are currently delivering the third. In our Wind business, we more than doubled our year-over-year growth as Inox business prospects demonstrate improvement and our 3 megawatt ECS demonstrates its capabilities.”

American Superconductor analyst ratings and price targets are on MarketBeat.

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