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Canada's leading stock market, the TSX, introduced the TSX30 in 2019, highlighting the top 30 performing TSX stocks over three years. Ballard Power Systems (TSX:BLDP) secured a spot on the inaugural list and maintained its position for the following two years. Despite missing out on the 2022 and 2023 lists due to a downturn, Ballard Power Systems remains a quality stock poised for potential growth in 2024, making it a notable contender among TSX growth stocks.
At its current price of $4.07 per share, the industrial stock has experienced a 17.1% decline year-to-date. However, recent business developments and emerging growth drivers indicate a potential turnaround for the developer of fuel cell products.
Ballard Power Systems operates in a vast and expanding market. According to Fortune Business Insights, the global fuel cell market is projected to exceed US$36.4 billion by 2029, with a compound annual growth rate (CAGR) of 29.7% from 2022 onwards. Market analysts anticipate revenue and earnings growth rates of 30.3% and 10.3% per annum, respectively.
In 2023, Ballard Power Systems reported a 25.1% year-over-year increase in revenue to US$102.4 million, while net loss from continuing operations improved by 10.1% to US$144.2 million compared to 2022. Total operating expenses rose by 2.2% to US$149 million. Management refrained from providing revenue and net income guidance for 2023 or 2024 due to the early-stage development and adoption of hydrogen fuel cell technology.
As the leader in proton exchange membrane (PEM) fuel cell technology, Ballard Power Systems plans to invest in next-generation products, advanced manufacturing, and production capacity expansion in 2024. Management anticipates revenue distribution to be similar to 2023, with approximately 30% in the first half and 70% in the second half. Notably, Ballard secured its largest-ever order on April 1, 2024, signing a long-term supply agreement with Solaris Bus & Coach to supply 1,000 hydrogen fuel cell engines for the European transit bus market through 2027.
Furthermore, Ballard received recommendations for two grants worth US$40 million from the US Department of Energy's Hydrogen and Fuel Cell Technologies Office, supporting the construction of the "Ballard Rockwall Giga 1" facility in Rockwall, Texas, under the Clean Hydrogen Electrolysis, Manufacturing, and Recycling Program.
With these developments and the landmark agreement in Europe, Ballard Power Systems is positioned for a return to the winner's circle, signaling potential growth opportunities in 2024.
