Freedom Broker analysts maintained their “Buy” recommendation on American Superconductor (AMSC) shares and a $54 target price. From the $23.39 closing price on November 6, the upside potential is about 130.9%. Experts highlight the increase in the order backlog, new projects in the semiconductor industry, and transformer manufacturer Comtrafo entering the North American market ahead of the original schedule.
About the company
American Superconductor supplies equipment that helps power grids and industrial enterprises maintain stable voltage and reliable power supply. The company operates in two main areas: Grid — solutions for power grids and energy-intensive facilities, Wind — electrical control systems for wind power.
In recent years, AMSC has expanded its product lineup through acquisitions. In particular, the purchase of Brazil’s Comtrafo allowed the company to enter the production of power and distribution transformers.
Order backlog approached $320 mln
The main argument for keeping a positive view, analysts say, is demand for AMSC equipment. In Q2 of fiscal 2026, the company received new orders of more than $95 mln. In the first half, their volume reached about $230 mln — more than double last year’s result.
The 12-month order backlog increased 50% year over year, to nearly $320 mln. This helps gauge future revenue, although the timing of individual deliveries may change.
Demand is spread across several markets. More than 40% of new quarterly orders came from traditional power generation, and over 25% from renewables. The company also received orders from data centers, but their contribution to the overall business remains small for now.
The semiconductor industry opens up new opportunities
AMSC management estimates potential projects in the semiconductor industry at around $200 mln. These projects are not yet included in the order backlog: the company still needs to sign contracts, and timelines remain uncertain.
At the same time, customers are asking to shorten lead times. AMSC is reviewing capacity needs for the next 12–24 months. For one major semiconductor project, a contract has already been signed, with delivery scheduled for Q4 of the fiscal year.
Analysts believe that the expansion of semiconductor manufacturing supports demand for reliable power supply: power outages can lead to costly production downtime.
Comtrafo began shipments to the U.S. earlier than expected
An additional growth factor is Comtrafo’s entry into the North American market. AMSC delivered and commissioned a 165 MVA transformer for a solar and energy storage project in Texas.
Originally, the company expected to start such shipments no earlier than 2028. Now it has another transformer order in the U.S. and several larger potential projects. Management estimates they could generate additional revenue as early as fiscal 2027.
Revenue is growing faster than profit
In Q2 of fiscal 2026, AMSC increased revenue by 42.8% year over year, to $94 mln. Of this amount, $18.5 mln came from Comtrafo. Organic growth, excluding the contribution of the acquired business, was about 14.7%.
Gross margin increased from 26.3% in the previous quarter to 28.2%, but remained below last year’s 31%. Adjusted net income rose only 3.3%, to $9.1 mln. GAAP net income fell from $4.8 mln to $3 mln due to higher tax expenses.
The Grid segment reduced its operating loss versus the prior quarter, but has not yet returned to profitability. The main contribution to operating profit came from the Wind segment. Analysts note that its dependence on a major customer, Inox Wind, remains a risk.
Next-quarter slowdown is related to delivery timing
For Q3, the company forecasts revenue of more than $80 mln and adjusted net income above $7 mln. Both benchmarks are below Q2 results. Management explains this in part by pulling forward about $20 mln of shipments: at customers’ request, the company completed them in the first half. The December quarter is also affected by seasonality. In Q4, management expects growth to re-accelerate thanks to scheduled deliveries.
Freedom forecasts AMSC revenue of about $372 mln in fiscal 2026, $425 mln in 2027, and $494 mln in 2028. Among the key risks, experts highlight contract delays, project postponements, and continued pressure on Grid profitability.
How the view has changed since July
In July, Freedom Broker initiated coverage of AMSC with a “Buy” recommendation and a $54 target. The thesis was based on rising spending on grid modernization, connecting data centers, and developing energy-intensive industries.
The new report confirms the expansion in orders, but shows that sales growth has not yet fully translated into profit growth. Maintaining the target price reflects analysts’ expectations that higher plant utilization and Comtrafo’s development will support further results.
Not an individual investment recommendation.