Here's Why You Should Retain Westport Stock in Your Portfolio

Strength in Cespira, High-Pressure CNG Solution Aid WPRT

Westport is benefiting from strong momentum in its joint venture, Cespira, which focuses on low- and net-zero carbon transportation using HPDI systems. Cespira’s commercial progress broadened in the second quarter of 2026. Revenues rose 125% year over year, while product revenues increased 127%. About 12,000 Volvo natural gas trucks use HPDI across more than 35 countries. European LNG-to-diesel economics and CO2 credit rules continue to support adoption. A second OEM is planning a larger second phase after an initial 200-truck field trial, while the company continues to target Cespira breakeven in 2027.

Westport continues to advance its integrated high-pressure CNG storage solution, which has received overwhelming interest in the platform from fleet operators, dealers, and OEMs. The platform is intended to pair CNG storage with HPDI technology and preserve diesel-like performance. North America represents a major opportunity because heavy-duty trucking fuel costs are substantial, and fleets are increasingly seeking practical lower-emission solutions without sacrificing performance. If Westport successfully commercializes this platform in the region, it could meaningfully expand the company’s addressable market and revenue base.

Cespira’s engineering work continues to support revenues while broadening HPDI applications. Service revenues rose 156% year over year in the second quarter of 2026 as project milestones were achieved. One long-term engineering project is expected to finish in the fourth quarter of 2026 ahead of the planned Euro 7 product launch. Cespira also signed a Volvo-funded development agreement for a hydrogen-fueled HPDI engine, with a certified European commercial launch targeted before 2030. 

Westport remains concentrated on Cespira and High-Pressure Controls following the July 2025 Light-Duty divestiture. Production is active at the expanded Cambridge, Ontario facility and the Jiangsu, China site, where the company is ramping output and localizing supply chains. High-Pressure Controls had a customer backlog as of June 30, 2026, and the company expects volume to return to plan as the transferred equipment and facilities move beyond the transition period.

Slower Hydrogen Adoption, Currency Risks Ail Westport

Westport still projects that cash will not fund operations for the 12 months following issuance of its second-quarter 2026 results, leaving substantial doubt about its ability to continue as a going concern. Cash was $23.9 million as of June 30, 2026, down from $24.5 million as of March 31, 2026, despite about $10 million of gross proceeds from June financing. The company is evaluating public-market, debt and financing alternatives, but access and terms remain uncertain.

Hydrogen adoption is developing more slowly than Westport previously expected, limiting near-term demand for High-Pressure Controls. Second-quarter 2026 segment revenues fell 6% year over year as lower sales volumes and the manufacturing transition constrained output.  The hydrogen market is not growing at the rate expected a year ago. A prolonged adoption cycle could keep plant utilization and margins below targeted levels despite the existing customer backlog.

Westport reports in U.S. dollars while operating across multiple currencies, leaving earnings exposed to exchange-rate movements. In the second quarter of 2026, the company recorded a $1.7 million foreign exchange loss against a $4.2 million gain in the prior-year quarter. The reversal contributed to the increase in net loss from continuing operations to $11.4 million from $5.1 million. The company does not use foreign exchange contracts, leaving results exposed if currency moves persist.

Price Performance, Valuation and Estimates  

Westport has underperformed the Zacks Original Equipment industry in the last six months. Its shares have lost 13.5% against the industry’s growth of 0.3%. 

Image Source: Zacks Investment Research

From a valuation perspective, WPRT appears overvalued. Going by its price/sales ratio, the company is trading at a forward sales multiple of 3.32, higher than the industry’s 2.35. 

Image Source: Zacks Investment Research

The Zacks Consensus Estimate for Westport’s 2026 and 2027 loss per share has widened 11 cents and narrowed 2 cents, respectively, in the past seven days.

Image Source: Zacks Investment Research

Stocks to Consider

Some better-ranked stocks in the auto space are Geely Automobile Holdings Limited GELHY and Garrett Motion Inc. GTX, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for GELHY’s 2026 sales and earnings implies year-over-year growth of 77.1% and 43%, respectively. The EPS estimate for 2026 and 2027 has improved 12 cents and 23 cents each over the past seven days.

The Zacks Consensus Estimate for GTX’s 2026 sales and earnings implies year-over-year growth of 7.2% and 25.7%, respectively. The EPS estimate for 2026 and 2027 has improved 10 cents each over the past 30 days.

7 Best Stocks for the Next 30 Days

Just released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."

Since 1988, the full list has beaten the market more than 2X over with an average gain of +23.9% per year. So be sure to give these hand picked 7 your immediate attention. 

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research