Editor's note: The original version of this article misnamed the company in the headline.

Investors in American Superconductor (AMSC 3.46%) stock are having a pretty good week so far. On Tuesday, the provider of technology to electrical grid operators and wind turbine manufacturers announced an enlarged follow-on order from Inox Wind, a wind turbine manufacturer in India. That, in turn, elicited a price target boost and a renewed buy rating from analyst Eric Stine of investment bank Craig-Hallum on Wednesday morning.

Investors quickly responded to the price target hike, bidding up American Superconductor stock by 8.2% through 1:15 p.m. ET. Yet that still leaves room for the stock to rise as much as 33% more by the end of this year, based on Craig-Hallum's $14 target price (up from $12 previously).

Should you buy American Superconductor stock?

And yet ... does American Superconductor stock actually deserve that buy rating?

As I explained in an article published earlier on Wednesday, I have my doubts. While Tuesday's contract was substantial in size, amounting to $8 million or nearly 7% of the company's annual revenues, it's not big enough to turn the company profitable. Indeed, analysts polled by S&P Global Market Intelligence expect American Superconductor to lose money this quarter ... and next quarter ... and for the next two years at least.

As far out as analysts are willing to make predictions, they see American Superconductor losing money. So how could a stock like that be a "buy?"

One reason American Superconductor might be a buy

The fact is, I'm not sure it is a buy -- but I do see a reason to hope that it might become one.

While it is unprofitable on a GAAP (generally accepted accounting principles) basis, and is expected to remain so for the foreseeable future, analysts do see the potential for American Superconductor to begin generating positive free cash flow -- and fairly soon. According to S&P data, the consensus of analysts who follow the stock is that American Superconductor will generate about $2 million in operating cash flow next year while spending only $1 million on capital improvements. By 2026, operating cash flow is expected to exceed capital expenditures -- meaning free cash flow would remain positive for the company, and perhaps even grow in future years.

Now granted, at its current $320 million market capitalization, $1 million in free cash flow would give American Superconductor a price-to-free-cash-flow ratio of 320. That's not cheap -- at all. But at least it would be a positive valuation, which is something the company lacks when valued on GAAP profits.

Is this a thin reed upon which to base a buy thesis for American Superconductor stock? Undoubtedly it is. But at least it's a start.