Aspen Aerogels (ASPN 1.56%) easily beat quarterly expectations and said revenue more than doubled from a year ago. Investors are buying in, sending shares of the advanced materials company up 38% as of 10:30 a.m. ET.
Revenue is surging
Aspen makes materials designed to improve the efficiency of lithium batteries, among other uses. The company lost $0.02 per share in the first quarter of 2024, it reported yesterday, on revenue of $94.5 million, significantly better results than the $0.11-per-share loss on revenue of $75 million that Wall Street had expected.
Revenue was up 107% year over year, led by thermal barrier sales up 459% and accounting for about two-thirds of total sales. And Aspen is getting closer to profitability after losing $0.24 per share in the first quarter of 2023.
NYSE: ASPN
Key Data Points
"We remain deeply engaged with a growing list of automotive OEMs and battery cell manufacturers and have strong conviction that we are providing a unique solution to a very challenging problem," CEO Don Young said in a statement. "We remain focused on scaling the five OEM awards that we have in hand alongside maximizing our Energy Industrial business."
Is Aspen Aerogels a buy after its strong quarterly results?
Shares of Aspen Aerogels are now up nearly 250% over the past year. But the company is still relatively small, with a market capitalization of just $1.7 billion, and the potential market opportunity as the world transitions to electric vehicles is massive.
Post-earnings the company boosted its full-year revenue guidance by 9% to $380 million, and said it now expects to be slightly profitable on a per-share basis. Young said that Aspen's existing manufacturing footprint and supply arrangements give the company the capacity to do about $650 million worth of business, which at scale he says can generate a 35% gross margin.
With such high expectations now built into the stock price, there are risks that any misstep could cause the shares to tumble. But if things go according to script for Aspen, this stock can continue to accelerate from here.
Editor's note: This article has been corrected. The company said that it believes "the Q1 results further demonstrate that we have the capability with existing assets and supply arrangements to deliver $650 million of annual revenue with at least 35% gross margins and 25% Adjusted EBITDA margins."
