American Superconductor stock is a buy, Roth says

Following the announcement of a major contract, Roth MKM analyst Justin Clare has raised his price target on American Superconductor (American Superconductor Stock Quote, Chart, News, Analysts, Financials NASDAQ:AMSC).

On June 12, AMSC announced it had won a multi-year contract with Irving Shipbuilding worth approximately $75-million.

“This contract award marks the first AMSC Ship Protection production systems delivery to an allied navy. This contract represents the success of the very deliberate actions we have taken to diversify our business, drive growth and expand scale both domestically and internationally,” said Daniel P. McGahn, Chairman, President and CEO, AMSC. “We look forward to working with Irving Shipbuilding Inc. and the Royal Canadian Navy during the expected insertion of our Ship Protection Systems into the CSC ships and look ahead to expanding our work with allied Navies.”

The analyst said this could be the beginning of a string of orders for AMSC.

“Earlier today, AMSC announced a $75mn contract for its proprietary ship protection system (SPS) with Irving Shipbuilding, Canada’s national shipbuilder,” he wrote. “It is the first SPS order AMSC has secured with an allied navy and further validates its technology. We believe the order effectively doubles the TAM for AMSC’s Navy business, while there is potential for further TAM expansion with additional allied navies. We expect revenue from the order to begin in FY’25 and increase our estimates.”

In a research update to clients June 12, Clare maintained his “Buy” rating and raised his price target on AMSC from $20.00 to $27.00.

The analyst thinks AMSC will post EPS of $0.04 per share on revenue of $156.6-million in fiscal 2025. He expects those numbers will improve to EPS of $0.28 on a topline of $177.6-million in fiscal 2025.