American Superconductor Corporation AMSC has delivered a stunning performance in 2024, with its stock skyrocketing 192.4% year to date (YTD). The company has outpaced the Zacks Electronics - Miscellaneous Components industry and major benchmarks like the S&P 500 and The Technology Select Sector SPDR Fund XLK ETF, highlighting its stellar momentum.
AMSC stock has also outperformed other players in the Electronics - Miscellaneous Components industry space, including Ballard Power Systems BLDP and OSI Systems OSIS. While shares of Ballard Power Systems have plunged 60.3% YTD, OSI Systems shares have risen 35.4%.
YTD Price Return Performance
Image Source: Zacks Investment Research
With such an impressive run, many wonder: Is it too late to buy? The answer is no. Here’s why AMSC’s growth story still has plenty of room to run.
AMSC Leadership in Renewable Energy and High-Growth Markets
American Superconductor’s dominance in alternative energy solutions has been pivotal. Its cutting-edge offerings, from grid interconnection systems to high-temperature superconductor cables, cater to the surging demand for renewable energy and grid modernization. As the transition to green energy gains momentum, AMSC is well-positioned to ride this wave.
The company’s portfolio addresses key sectors like wind energy, marine systems and power grid resilience. These industries are booming due to the increasing global focus on clean energy and energy efficiency. American Superconductor’s ability to outperform industry benchmarks reflects investor confidence in its capability to seize long-term growth opportunities.
AMSC’s Expanding Market Reach With Strategic Moves
American Superconductor’s diversified portfolio is a standout feature, offering high-demand solutions such as D-VAR Systems for power grid stability and advanced wind turbine designs. These products cater to utilities, renewables and industrial applications, ensuring strong customer demand across multiple sectors.
The recent acquisition of NWL, which enhances its footprint in military and industrial markets, underscores American Superconductor’s strategic vision. With rising global defense budgets, its marine systems —designed to tackle challenges for naval fleets — position the company for sustained growth in the defense sector.
AMSC’s Financial Resilience
American Superconductor’s financial performance supports its bullish case. In the second quarter of fiscal 2025, the company posted revenues of $54.5 million, up a staggering 60.2% year over year, driven by robust demand for energy power systems and electrical control shipments.
Notable contract wins bolster its financial outlook. These include a $75 million deal with the Royal Canadian Navy and a follow-on $12 million order from wind energy leader InoxWinds this year. Such high-value agreements signal AMSC’s ability to secure steady revenue streams and maintain its growth trajectory.
The Zacks Consensus Estimate for fiscal 2025 and 2026 implies sustained growth expectations, reinforcing confidence in AMSC’s long-term prospects.
Image Source: Zacks Investment Research
Is AMSC’s Premium Valuation Justified?
American Superconductor stock is trading at a premium, with a forward 12-month price-to-sales (P/S) ratio of 5.37 compared with the industry’s 2.43. While this suggests a higher valuation, the premium can be justified by AMSC's impressive financial performance, strategic acquisitions and growing demand across multiple high-growth sectors like wind, power grids and marine systems.
Image Source: Zacks Investment Research
Though some investors may view the premium valuation as a risk, American Superconductor’s long-term growth prospects and strong market positioning make it an attractive buy for those looking to capitalize on the renewable energy boom.
Conclusion: Buy AMSC Stock for Now
Despite its dramatic rally, American Superconductor remains a compelling investment. Its leadership in renewable energy and grid modernization, coupled with a diversified product portfolio and strategic acquisitions, positions it as a key player in high-growth markets.
While the stock’s premium valuation may seem daunting, it reflects the company’s robust fundamentals and growth prospects. For investors seeking exposure to renewable energy and defense sectors, American Superconductor offers an attractive opportunity to capitalize on these booming industries. AMSC currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Free: 5 Stocks to Buy As Infrastructure Spending Soars
Trillions of dollars in Federal funds have been earmarked to repair and upgrade America’s infrastructure. In addition to roads and bridges, this flood of cash will pour into AI data centers, renewable energy sources and more.
In, you’ll discover 5 surprising stocks positioned to profit the most from the spending spree that’s just getting started in this space.
Download How to Profit from the Trillion-Dollar Infrastructure Boom absolutely free today.American Superconductor Corporation (AMSC) : Free Stock Analysis Report
OSI Systems, Inc. (OSIS) : Free Stock Analysis Report
Ballard Power Systems, Inc. (BLDP) : Free Stock Analysis Report
Technology Select Sector SPDR ETF (XLK): ETF Research Reports
To read this article on Zacks.com click here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
