Worksport Ltd. (WKSP) shares surged more than 26% on Monday after the clean energy and automotive accessories company shared some encouraging numbers: improving margins, a new distribution deal, and a clearer picture of when it might start generating positive operating cash flow.
The company reported a preliminary May gross margin of about 35%. That's a nice jump from 28.4% in the first quarter, and management credits efficiency gains, cost discipline, pricing power, and growing scale. For a company that's been burning cash, moving the margin needle is a big deal.
The Path to Positive Cash Flow
Worksport estimates it would need roughly $9 million in quarterly revenue to achieve positive operating cash flow. That math assumes the 35% gross margin holds, and the company is targeting hitting that milestone sometime in 2026. It's an ambitious goal, but the trajectory is starting to look plausible.
The company also announced it has secured Meyer Distributing as its first multinational distribution partner. Meyer placed an initial order for tonneau covers, which should open up access for dealers, installers, and resellers across the U.S. and Canada.
Distribution Drives Revenue Upside
Worksport's business splits into two channels: B2C and B2B. On the consumer side, activity is tracking near $1 million per month, or about $12 million annualized. On the B2B side, sales recently ran at about $0.7 million per month, or $8.4 million annualized.
But with the Meyer deal, momentum from Tri-State, existing channel relationships, and dealer expansion, management sees B2B annualized revenue potential above $24 million over the next 12 months. Combine that with B2C, and the total annualized revenue opportunity tops $36 million.
CEO Steven Rossi summed it up: the update reflects "expanding distribution, improving gross margins, compelling B2C activity, and a clear revenue path toward near-term operational cash-flow positivity."
Business Overview and Growth Strategy
Worksport designs and manufactures automotive accessories and clean-energy products, including tonneau covers and portable power stations. Recent margin gains and new distribution relationships support its push toward operational cash-flow positivity, with annualized revenue already tracking above $20 million.
Earnings Preview and Analyst Outlook
Worksport is expected to provide its next financial update on August 12, 2026. Analysts estimate a loss of 43 cents per share, improving from a loss of 71 cents, while revenue is expected to rise to $6.60 million from $4.11 million.
The stock carries a Buy rating with an average price forecast of $3.00. Maxim Group maintained its Buy rating but lowered its price forecast to $2.00 on May 15.
As of Monday's publication, Worksport shares were up 26.21% at $0.92.
