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Fuel Systems Solutions, Inc. (FSYS) Message Board

  • juliaadams54 juliaadams54 Nov 12, 2013 1:33 PM Flag

    Lake Street inst. equity research analyst below, REITERATES BUY at $18 target as oversold, quality research not paid

    we maintain our BUY rating given the company’s
    strong position in the U.S. market - which is starting to see strong growth, the
    secular tailwind from the shift to natural gas fuel, and the attractive valuation
    of 6.3x EV/EBITDA on 2015 estimates.

    INVESTMENT THESIS & VALUATION
    Fuel Systems’ leading market position and numerous OEM and distributor
    relationships position it to benefit from the accelerating, global adoption of
    alternative-fueled vehicles. This shift is being driven by high oil prices and tightening
    emissions standards. We believe Fuel Systems is in the early stages of a multi-year
    growth ramp and the company can become a $600 million revenue business that
    generates EPS of $1.80-$1.90 and EBITDA of $80+ million.

    HIGHLIGHTS
    Q3 Results Solid – Revenue of $97.6M (+9%) was above our $95.5M
    estimate due to strong OEM sales in North America. EPS of $0.05 was
    above our estimate of $0.03, due to the revenue outperformance and good
    cost control. Results are summarized below.
    Q3 LSCM First Call
    Reported Estimate Consensus
    Revenue ($mm) $97.6 $95.5 $97.6
    EPS, GAAP $0.05 $0.03 $0.05
    EPS, adjusted $0.05 $0.03 $0.05

    U.S. OEM Market Ramps Up – Management noted strong trends in the GM
    business with orders for over 3,000 units (we estimate roughly $27 million in
    revenue), including approximately 1,600 pickups and 1,400 vans. The company
    also announced an aftermarket bi-fuel CNG option for the model year 2014
    Chevrolet Cruze, which is the first bi-fuel sedan available. We expect growth in
    the North American DOEM business as interest in light-duty gaseous fuel
    vehicles builds.
    Strong Results In Automotive Segment:
    In-line Results In Industrial Segment – Industrial segment revenue of $30.7
    million (+9% in constant currency) was in-line with our estimate and was helped
    by strong sales of APUs.

    VALUATION
    Our 12-month price target of $18 is based on an 8x EV/EBITDA multiple on our 2015
    EBITDA estimate of $35 million.

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    • terryjones694@rocketmail.com terryjones694 Nov 20, 2013 7:57 AM Flag

      It is perplexing that Wall Street's reaction to Fuel System Solutions' (FSYS) third quarter report (one that actually met expectations, both on the top and bottom lines) was so hateful, that it mercilessly stripped 30% of market value away, in a blink of an eye.

      Why was the carnage so brutal? Believe it or not, it was because the company narrowed its full year revenue guidance, to the bottom of its previously stated range of $400 to $420 million. So in effect, a potential reduction of $20 million in revenues, extracted $70 million of market value-pretty preposterous when considering those lost sales, would of generated just $5 million of gross profit. I guess the only explanation for the "sell now, ask questions later" reaction, is the market evidently assumed that the business it is slated to lose from both Volkswagen China and Honda Thailand by year's end, can not be replaced.

    • Read on SEEKING ALPHA
      .

      It is perplexing that Wall Street's reaction to Fuel System Solutions' (FSYS) third quarter report (one that actually met expectations, both on the top and bottom lines) was so hateful, that it mercilessly stripped 30% of market value away, in a blink of an eye.

      Why was the carnage so brutal? Believe it or not, it was because the company narrowed its full year revenue guidance, to the bottom of its previously stated range of $400 to $420 million. So in effect, a potential reduction of $20 million in revenues, extracted $70 million of market value-pretty preposterous when considering those lost sales, would of generated just $5 million of gross profit. I guess the only explanation for the "sell now, ask questions later" reaction, is the market evidently assumed that the business it is slated to lose from both Volkswagen China and Honda Thailand by year's end, can not be replaced.

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      An ironic twist: Did the market even pay attention to the obscure fact that if it wasn't for an impairment charge of $1.7 million, the company's earnings would have essentially doubled? The charge was attributable to the purchase of the remaining 50% of its India based Rohan BRC joint venture. Evidently the company overpaid when it initially entered into the JV three years ago.

      The conference call: the way it was run, didn't help matters either. The lack of enthusiasm, and robotic delivery, amplified the stock's sell-off. Further weakening the call were the participants very strong Italian accents, which were difficult to understand. The analysts compounded the problem by presenting questions that were off the mark, when it came to the priority of the stock price. Why not ask the obvious? "When are you going to begin a sto

    • time_for_your_tutor_lesson time_for_your_tutor_lesson Nov 13, 2013 3:56 PM Flag

      very accurate and great research they only cover high quality companies

      • 1 Reply to time_for_your_tutor_lesson
      • Motley fool today nov. 12 2013 yahoo headline says FSYS BUYING OPPORTUNITY BELOW TECHNICALLY
        .

        Does Fuel Systems Solutions' Bloodletting Represent Opportunity?
        Motely Fool today's yahoo headline
        By Rich Duprey November 12, 2013
        The hemorrhaging has been mostly stanched for Fuel System Solutions (NASDAQ: FSYS ) , the alternative fuel components maker that bled out last week after reporting earnings last week that matched Wall Street estimates on the top and bottom line but narrowing guidance for the coming quarter to the lower end of its prior forecast.
        With its shares tumbling 18% on the day of the release and ultimately closing out the week 21% lower, I think this is what's called in polite circles as an "overreaction."

        The components maker reported a nice 10% rise in its automotive revenues division to $67.5 million and a 6% increase in industrial revenues to $30.1 million, but what worried everyone was Fuel Systems' expectation that with expiration of certain OEM and delayed-OEM (DOEM) later this year and early into next year. Under Fuel System's DOEM model, it receives vehicles directly from automotive OEMs, installs its proprietary propane or natural gas fuel systems into the vehicles, then delivers the completed bi-fuel vehicles directly to the dealership network. It is the main driver of revenue growth.

        This past quarter, DOEM revenues jumped $8.4 million while compressor sales added another $1.6 million, gains that were offset by a $2.1 million drop in OEM kits, mainly in Italy, and U.S. aftermarket sales of some $1.4 million. That's why Westport Innovations NASDAQ: WPRT, which generates two-thirds less in sales than does Fuel Systems, and Clean Energy Fuels NASDAQ: CLNEwhich generates 10% less -- but both of which have generated more extensive losses than Fuel Systems -- have market caps far in excess of their rival. Fuel Systems has been priced at just $270 million whereas Westport and Clean Energy exceed $1 billion each.
        Which all goes to sa

 
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