Top25-SA-Banner

Roth Capital Reiterates Buy On Ballard Power Systems On The Back Of $80 Million Agreement With Volkswagen


Roth Capital analyst Matt Koranda weighed in on Ballard Power Systems (NASDAQ:BLDP), as the company announced Wednesday an $80 million agreement with Volkswagen that is comprised of an IP transfer and a two-year extension of an existing engineering services agreement. The analyst rates the stock a Buy.

Koranda observed, “In our view, this announcement represents a major win for BLDP on several fronts. First, if a portion of the $50mn IP transfer to VW can be recognized as revenue during Q1’15, we believe this places EPS profitability on the table in Q1. Second, it validates BLDP’s IP monetization strategy, in our view, as the company purchased the IP portfolio in Apr’14 for $22mn (roughly $2mn in cash and $20mn in BLDP stock). Third, this should fortify BLDP’s B/S with additional cash to help with the transition to EBITDA breakeven, which we forecast by Q4’15. Finally, this agreement deepens the relationship between Volkswagen and BLDP, which we view as a positive.”

According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Matt Koranda has a total average return of -6.5% and a 32.0% success rate. Koranda has a 23.5% average return when recommending BLDP, and is ranked #3202 out of 3510 analysts.