American Superconductor’s stock price has taken a beating over the past six months, shedding 26.3% of its value and falling to $23.51 per share. This might have investors contemplating their next move.
Following the pullback, is now an opportune time to buy AMSC? Find out in our full research report, it’s free.
Why Are We Positive On AMSC?
Founded in 1987, American Superconductor (NASDAQ:AMSC) has shifted from superconductor research to developing power systems, adapting to changing energy grid needs and naval technology requirements.
1. Skyrocketing Revenue Shows Strong Momentum
Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. Thankfully, American Superconductor’s 26.9% annualized revenue growth over the last five years was incredible. Its growth beat the average industrials company and shows its offerings resonate with customers. 
2. Increasing Free Cash Flow Margin Juices Financials
If you’ve followed StockStory for a while, you know we emphasize free cash flow. Why, you ask? We believe that in the end, cash is king, and you can’t use accounting profits to pay the bills.
As you can see below, American Superconductor’s margin expanded by 18.4 percentage points over the last five years. American Superconductor’s free cash flow margin for the trailing 12 months was 11.4%.
3. New Investments Bear Fruit as ROIC Jumps
ROIC, or return on invested capital, is a metric showing how much operating profit a company generates relative to the money it has raised (debt and equity).
We like to invest in businesses with high returns, but the trend in a company’s ROIC is what often surprises the market and moves the stock price. Over the last few years, American Superconductor’s ROIC has increased. This is a good sign, but we recognize its lack of profitable growth during the COVID era was the primary reason for the change.
Final Judgment
These are just a few reasons why we're bullish on American Superconductor. With the recent decline, the stock trades at 57.1× forward P/E (or $23.51 per share). Is now the right time to buy? See for yourself in our in-depth research report, it’s free.
Stocks We Like Even More Than American Superconductor
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