Asset-tracking and process management technologist Aspen Technology (AZPN) is turning heads today. The company was expected to suffer lower sales and dramatically weaker earnings year over year in Wednesday's fourth-quarter earnings report, but Aspen had other ideas. The report crushed Wall Street's expectations across the board and inspired a fairly optimistic set of guidance targets for the new fiscal year, sending share prices 28% higher in Wednesday's after-market trading session.

Aspen shocked the Street

Your average analyst had expected Aspen's revenue to fall 10% year over year, landing near $177 million. Earnings were seen heading roughly 26% lower to $1.17 per share.

In reality, Aspen's fourth-quarter sales rose 2% to $199 million and the bottom-line drop was a much milder 3%, stopping at earnings of $1.54 per share.

Aspen's management expects the fiscal year 2021 to deliver earnings of approximately $5.05 per share on sales in the neighborhood of $729 million. Here, the current analyst view called for earnings near $3.64 per share on revenue closer to $600 million. These differences are not small.

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Image source: Getty Images.

How Aspen achieved these great results

As it turns out, many businesses in Aspen's most important target markets are very interested in making their work processes more efficient and their material assets more reliable. Large-scale economic crises like the COVID-19 pandemic tend to have that effect.

About 40% of Aspen's revenue is derived from the energy sector, followed by 25% to 30% in the chemical and engineering markets. Other industries, including pharmaceutical development, round out the picture with a revenue share of approximately 5%. These are all capital-intensive business sectors, where even small tweaks to asset management standards and modest process improvements can save millions of dollars.

CEO Antonio Pietri is excited about the growth prospects his company is facing in this difficult market environment. The company is injecting artificial intelligence tools into its recently released Internet of Things hub and preparing updated versions of its core software packages.

"While the current macroeconomic environment is challenging, there are many factors that support long-term growth for the business," Pietri said on the fourth-quarter earnings call. "The innovations that will be delivered in our new software release will further reinforce the value our mission-critical solutions have generated for customers for nearly 40 years and uniquely position AspenTech to again lead the next transformation of the process industries."

What's next for Aspen Technology?

Under these circumstances, Pietri sees the modest growth of the fourth quarter blooming into double-digit revenue increases for the foreseeable future. Aspen controls a very small slice of a multi-billion dollar annual market, giving the company plenty of room for strong long-term growth trends. The customers who are taking a long, hard look at their process and asset management tools during this crisis should evolve into lasting business relationships with multi-year contracts.

The stock is a bit pricey at 34 times trailing earnings and 36 times free cash flow, but nobody said winning was cheap. Aspen just proved its mettle as an exciting growth stock with a basket full of reliable growth drivers.