Westport heads north All indications suggest this is going to be a "green" day for Westport Innovations shareholders. The company that specializes in converting diesel engines to run on natural gas received its third buy rating in two weeks this morning, as Wall Street stalwart Piper Jaffray joined previous Westport backers Macquarie and Capstone Investments in endorsing the stock.
According to Piper, this $37 stock is likely to tack on upward of $10 to its share price over the next 12 months, hitting $47.50 per share before a year is out.
Is Piper right? Your guess is as good as theirs. With Westport currently unprofitable, and expected to make no profit this year (or even next year), there really isn't a lot to hang a valuation on for this stock. From a traditional PEG ratio perspective, analysts' consensus earnings growth target of 30% for the next five years would ordinarily mean we'd want to see a P/E of 30 or less on the stock. This, however, would require Westport to be pulling in about $1.24 per share in profit. Last year, Westport lost $1.28.
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