On Wednesday, Roth/MKM expressed a positive outlook on American Superconductor (NASDAQ:AMSC), increasing the stock's price target to $27.00 from the previous $20.00. The firm maintained its Buy rating for the company's shares.
This adjustment follows American Superconductor's announcement of a significant $75 million contract with Irving Shipbuilding, a prominent national shipbuilder in Canada. The deal involves American Superconductor's proprietary ship protection system (SPS), marking the first time the company has secured an SPS order with an allied navy.
The analyst from Roth/MKM highlighted the importance of this contract, noting that it not only validates American Superconductor's technology but also effectively doubles the total addressable market (TAM) for the company's Navy business. There is also potential for additional expansion of the TAM as the company may secure further orders with other allied navies.
The revenue from this new contract is anticipated to start contributing to American Superconductor's financials in the fiscal year 2025. Based on this new development, Roth/MKM has revised its revenue estimates upward for the company.
The analyst reiterated the Buy rating for American Superconductor, emphasizing the increased price target to $27.00, which reflects confidence in the company's growth prospects following the new contract with Irving Shipbuilding. This deal is seen as a significant milestone for American Superconductor, as it ventures further into the naval defense market.
In other recent news, American Superconductor Corporation (AMSC) announced robust financial results for the fourth quarter and full fiscal year 2023. The company's Q4 revenue surpassed $40 million, contributing to almost $146 million in total revenue for the fiscal year, exceeding forecasts.
A significant growth driver was the company's diversification strategy, including expansion in renewable, industrial, and navy sectors. This strategy has resulted in a robust 12-month backlog worth $140 million, and a positive outlook for fiscal year 2024. AMSC projects Q1 fiscal year 2024 revenues to be between $38 million and $42 million.
While no specific timeline was provided for reaching the goal of $50 million in quarterly revenue, the company is on track to nearly double its fiscal year 2023 revenue compared to two years prior. AMSC has identified business opportunities worth hundreds of millions with multiple chip manufacturers, indicating potential for further growth. These are just some of the recent developments at AMSC.
InvestingPro Insights
Following the upbeat assessment from Roth/MKM, American Superconductor (NASDAQ:AMSC) is also garnering attention for its financial health and stock performance. An InvestingPro Tip highlights that the company holds more cash than debt on its balance sheet, which can be a reassuring signal for investors looking for stability.
Moreover, analysts are optimistic about AMSC's future, anticipating net income growth this year and revising earnings upwards for the upcoming period. These revisions reflect a positive sentiment surrounding the company's earnings potential.
InvestingPro Data underscores this sentiment, with a notable revenue growth of 37.42% over the last twelve months as of Q4 2024. Furthermore, the stock has demonstrated strong returns, with a 238.89% increase over the past year and a 62.43% surge in the last month alone. Though the P/E Ratio stands at -63.83, indicating that the stock is not profitable based on the last twelve months of earnings, the significant growth in revenue and the positive outlook for net income may suggest potential for future profitability.
For investors seeking more in-depth analysis, there are additional InvestingPro Tips available, which can be accessed for American Superconductor at https://www.investing.com/pro/AMSC. Remember to use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, offering you further insights to inform your investment decisions.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.