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DOW   38,612.24
QQQ   425.61
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Germany says Europe's largest economy is in 'troubled waters' and cuts its growth forecast
Range-bound Home Depot stock still is, lower prices ahead
S&P 500   4,981.80
DOW   38,612.24
QQQ   425.61
Palo Alto Networks, Keysight fall; Garmin, Toll Brothers rise, Wednesday, 2/21/2024
Is Gold Really Boring? (Ad)
Palo Alto Networks aims at cyber security leadership
Spotify sounding better to analysts as company tunes into profits
Is Gold Really Boring? (Ad)
3 Reasons the Capital One-Discover merger is a big deal
How major US stock indexes fared Wednesday, 2/21/2024
Is Gold Really Boring? (Ad)
Germany says Europe's largest economy is in 'troubled waters' and cuts its growth forecast
Range-bound Home Depot stock still is, lower prices ahead
S&P 500   4,981.80
DOW   38,612.24
QQQ   425.61
Palo Alto Networks, Keysight fall; Garmin, Toll Brothers rise, Wednesday, 2/21/2024
Is Gold Really Boring? (Ad)
Palo Alto Networks aims at cyber security leadership
Spotify sounding better to analysts as company tunes into profits
Is Gold Really Boring? (Ad)
3 Reasons the Capital One-Discover merger is a big deal
How major US stock indexes fared Wednesday, 2/21/2024
Is Gold Really Boring? (Ad)
Germany says Europe's largest economy is in 'troubled waters' and cuts its growth forecast
Range-bound Home Depot stock still is, lower prices ahead
S&P 500   4,981.80
DOW   38,612.24
QQQ   425.61
Palo Alto Networks, Keysight fall; Garmin, Toll Brothers rise, Wednesday, 2/21/2024
Is Gold Really Boring? (Ad)
Palo Alto Networks aims at cyber security leadership
Spotify sounding better to analysts as company tunes into profits
Is Gold Really Boring? (Ad)
3 Reasons the Capital One-Discover merger is a big deal
How major US stock indexes fared Wednesday, 2/21/2024
Is Gold Really Boring? (Ad)
Germany says Europe's largest economy is in 'troubled waters' and cuts its growth forecast
Range-bound Home Depot stock still is, lower prices ahead

American Superconductor faster than a speeding bullet on EPS beat

photo of power transmission lines with tech symbols

Key Points

  • American Superconductor provides power resiliency systems worldwide for power grids and wind turbines.
  • The company reported its second consecutive quarter of non-GAAP EPS profits and 64.8% YoY revenue growth.
  • Twelve-month backlog rose 25% YoY to $132 million.
  • 5 stocks we like better than American Superconductor

Megawatt-scale power resiliency solutions provider American Superconductor Co. NASDAQ: AMSC shares surged 40% on its Q3 2023 earnings report and upside guidance. The computer and technology sector company offers products and services to keep electricity flowing smoothly on the power grid, storage and through sustainable energy systems like wind turbines. The company's proprietary high-temperature superconductor (HTS) wire products are used throughout industries including healthcare, mining, military, semiconductor, industrial processing and power transmission.

Its ship protection systems enable naval and commercial ships to reduce their magnetic signature, helping protect them from magnetic mines, as well as power generation and propulsion systems. The company has been in a turnaround, improving both top and bottom-line results as evidenced by its latest earnings report and guidance. The company competes with various companies like Siemens Energy AG OTCMKTS: SMEGF and Power Integrations Inc. NASDAQ: POWI.

Diversified industries

The company has two divisions, Grid and Wind. The Grid division makes power systems and electronic converters that optimize and control the flow of electricity through power grids and renewable energy systems. Utilities are key customers that depend on its products to enhance the reliability and stability of electric grids. The U.S. Navy's fleet protection and power systems are under the Grid division. The Wind division designs wind turbine systems and provides components and control systems. They're focused on boosting the performance and efficiency of wind turbines and helping to reduce production costs.


Wind turbine order

On January 16, 2024, American Superconductor announced an $8 million follow-on order from Inox Wind Ltd, a premiere India-based wind turbine manufacturer. The order is for the 3 MW class wind turbine electrical control systems (ECS). American Superconductor expects to ship the systems out throughout 2024 and is contracted as the exclusive supplier of ECS for Inox's 3 MW class wind turbine. According to the National Electricity Plan for 2022 to 2032, India's onshore wind market capacity is expected to add more than 80 GW by 2032 to reach its installed capacity goal of 122 GW.

Steady earnings beats  

On January 24, 2024, American Superconductor announced its Q3 2023 EPS of 3 cents, beating analyst estimates by 9 cents. Revenues jumped 64.8% YoY to $39.4 million versus $34 million consensus analyst estimates. Increased shipments of electronic control and new energy power systems drove the revenue surge. They achieved 25% gross margins and non-GAAP net income for the second consecutive quarter. The company closed the quarter with $25 million in cash and cash equivalents.

American Superconductor CEO Daniel McGahn commented, "We booked over $34 million of new orders during the quarter, including our second 3MW ECS order from Inox Wind. We ended the quarter with over $137 million in a 12-month backlog, nearly 25% year-over-year growth. Given this backlog position, strong demand in our end markets, and shortening customer lead times, we believe we are very well positioned for the fourth fiscal quarter which will end March 2024."

Upside guidance

American Superconductor raised forecasts for its fourth-quarter 2023 revenues of $36 million to $40 million versus $34.4 million consensus analyst estimates. The GAAP net loss is not expected to exceed $3.5 million or 12 cents a share. Non-GAAP net loss is not expected to exceed $1.7 million or 6 cents per share compared to consensus analyst estimates for a loss of 4 cents, assuming no change in fair value of contingent consideration. Operating cash flow is expected to break even to positive cash generation of $2 million. American Superconductor expects cash and cash equivalents to be at least $25 million. 

American Superconductor analyst ratings and price targets are at MarketBeat. American Superconductor peers and competitor stocks can be found with the MarketBeat stock screener. AMSC shares have a 4.86% short interest.

asmc stock daily bull flag breakdown

Daily bull flag breakout

The daily candlestick chart on AMSC indicates a bull flag breakout pattern. The flagpole formed on the rally from the $5.78 low on October 23, 2023, to the $11.81 peak on December 28, 2023. The flag formed as AMSC pulled back in a parallel price panel comprised of lower highs and higher lows that tested the daily 50-period moving average (MA). The daily market structure low (MSL) triggered the breakout through $10.19, powered by the sharp rise in the daily relative strength index (RSI) oscillator through the 70-band. This triggered the bull flat breakout as shares surged to $14.70 on January 26, 2024. Pullback support levels are at $11.00, $10.19, $9.37 and $8.56.

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Should you invest $1,000 in American Superconductor right now?

Before you consider American Superconductor, you'll want to hear this.

MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and American Superconductor wasn't on the list.

While American Superconductor currently has a "Buy" rating among analysts, top-rated analysts believe these five stocks are better buys.

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Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
American Superconductor (AMSC)
0.361 of 5 stars
$13.21-0.5%N/A-22.39Buy$12.00
Power Integrations (POWI)
4.6038 of 5 stars
$72.62+0.0%1.10%74.87Hold$86.17
Siemens Energy (SMEGF)
0 of 5 stars
$14.77+4.5%N/AN/AModerate BuyN/A
Compare These Stocks  Add These Stocks to My Watchlist 

Jea Yu

About Jea Yu

  • JeaYu21@gmail.com

Contributing Author

Trading Strategies

Experience

Jea Yu has been a contributing writer for MarketBeat since 2018.

Areas of Expertise

Equities, options, ETFs and futures; fundamental, qualitative, quantitative and technical analysis and pattern identification; active and swing trading; trading systems and methodology development

Education

Bachelor of Arts, University of Maryland, College Park

Past Experience

U.S. equity markets trader, writer and analyst for over 25 years. Published four books by publishers McGraw-Hill, John Wiley & Sons, Marketplace Books and Bloomberg Press. Speaker at various expos and seminars and has been quoted and featured in USA Today, The Wall Street Journal, Traders Magazine, The Financial Times and various trade publications, including Stocks & Commodities, Active Trader and Online Investor.


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