Ballard(US:BLDP)2024-08-13 00:40Investment Rating - The report maintains an OUTPERFORM rating for Ballard Power Systems (BLDP US) with a target price of $6.50 [42] Core Views - The market is expected to react slightly negatively to Ballard's Q2 2024 results due to a net loss of $31.5 million, higher than market expectations, driven by low revenue and fixed cost pressures [2] - Ballard reaffirmed its 2024 operating expense guidance of $145-165 million but reduced its capital expenditure guidance from $50-70 million to $25-40 million [2] - The company expects revenue to be weighted towards the second half of 2024, with corresponding gross margin expansion [2] - Ballard did not reiterate its expectation of achieving breakeven by FY2025, with EBITDA profitability projected for 2027-2028 and gross margins in the low 20% range [2] - Q2 2024 revenue was $16 million, below the consensus estimate of $18.7 million, with a gross margin of -32%, worse than the expected -15% [2] - Backlog decreased from $180.5 million in Q1 2024 to $169.5 million in Q2 2024, with 12-month orders dropping from $79.7 million to $75.5 million [2] Financial Performance - Q2 2024 revenue grew 11% quarter-over-quarter and 5% year-over-year, driven by the Power Products division [2] - Gross loss improved slightly to -$5.1 million in Q2 2024 from -$5.4 million in Q1 2024, due to increased revenue and cost reduction initiatives [2] - EBITDA loss was $37.5 million, slightly worse than the consensus estimate of $36.4 million [4] - Net loss for Q2 2024 was $31.5 million, a 24% improvement from Q1 2024 but 5% worse year-over-year [4] Strategic Outlook - Ballard's future capital expenditure guidance over the next five years is $300 million [2] - No updates were provided on the $130 million MEA factory in Shanghai, which is still under review [3]