Worksport (NASDAQ:WKSP) Releases Quarterly Earnings Results, Misses Estimates By $0.02 EPS

Worksport (NASDAQ:WKSP) issued its quarterly earnings results on Tuesday. The company reported ($0.26) earnings per share for the quarter, missing the consensus estimate of ($0.24) by ($0.02), Zacks reports. The company had revenue of $7.23 million for the quarter, compared to the consensus estimate of $7.24 million. Worksport had a negative net margin of 95.65% and a negative return on equity of 95.05%.

Here are the key takeaways from Worksport’s conference call:

• Worksport reported a record $7.2 million in Q3 net sales, up 44% year over year and 38% sequentially. Gross profit increased 40% year over year, operating expenses fell 12%, and net loss narrowed to $3.6 million from $4.9 million.
• Sales growth was supported by both channels, while large distributor orders increased sevenfold and September sales reached a monthly record of $2.7 million. Estimated backlog rose to about $740,000 at quarter-end, and inventory declined 21% to $9.6 million.
• Q3 operating cash use fell to about $0.4 million, but management said favorable working-capital movements—particularly inventory conversion—accounted for much of the improvement and should not be treated as a run rate. Operating cash use totaled $12 million in the first nine months; the company ended Q3 with $2.5 million in cash after a $2.3 million warrant inducement and said it may continue to use its credit facility and capital markets.
• Gross margin was 30.3%, down from 31.5% in Q2, with management citing higher material and landed costs, tariffs, and a larger B2B sales mix. The company said aluminum-cost inflation has pressured margins, including on NEXUS, though it expects to maintain healthy margins.
• NEXUS generated about $4.8 million in Q3 sales, roughly two-thirds of revenue, while SOLIS sales reached about $96,000; management is still working to build repeatable demand for SOLIS and COR. Terravis Energy’s AetherLux certification and production remain conditional on testing and readiness, and a potential complementary-product acquisition is subject to due diligence and definitive agreements; management gave no new target for operating cash-flow positivity.

Worksport Stock Performance

WKSP stock traded up $0.03 on Thursday, hitting $0.31. The company had a trading volume of 238,815 shares, compared to its average volume of 2,869,987. The company has a current ratio of 3.79, a quick ratio of 0.72 and a debt-to-equity ratio of 0.26. Worksport has a 12-month low of $0.24 and a 12-month high of $3.13. The stock has a market cap of $6.18 million, a price-to-earnings ratio of -0.17 and a beta of 0.54. The stock’s 50-day simple moving average is $0.39 and its 200 day simple moving average is $0.86.

Analyst Ratings Changes

A number of brokerages recently weighed in on WKSP. Maxim Group lowered shares of Worksport from a “buy” rating to a “hold” rating in a report on Friday, October 30th. Wall Street Zen downgraded Worksport from a “hold” rating to a “sell” rating in a research note on Saturday, September 5th. HC Wainwright initiated coverage on Worksport in a report on Thursday. They issued a “buy” rating for the company. Finally, Weiss Ratings restated a “sell (e+)” rating on shares of Worksport in a research note on Friday, October 2nd. One investment analyst has rated the stock with a Buy rating, one has assigned a Hold rating and one has assigned a Sell rating to the stock. According to MarketBeat, Worksport has a consensus rating of “Hold” and an average price target of $2.00.

Worksport Company Profile

Worksport Ltd. (NASDAQ: WKSP) develops and manufactures tonneau covers and related products for pickup trucks. Its covers are designed to protect cargo, improve vehicle utility, and provide an alternative to conventional truck-bed coverings. The company serves the automotive aftermarket and targets owners of pickup trucks across North America. Worksport’s product portfolio includes hard and soft folding tonneau covers, including its COR line of hard-shell covers. The company is also developing SOLIS, a solar-integrated tonneau cover designed to generate electricity from sunlight, and COR battery-related products intended to store and supply portable power.