Why Aspen Aerogels Stock Soared This Week

Shares Aspen Aerogels (US National Institute of Science and Technology) 1.82%)maker of industrial lubricants used to extend the life of lithium-ion batteries as well as for other purposes such as insulation, saw a sharp rise this week after the company released another second-quarter earnings report that easily beat analyst estimates.

Shares ended the week up 15.7%, according to S&P Global Market Intelligence data.

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Aspen growth is skyrocketing again

The main reason for Aspen’s gains this week was the increase in revenue and earnings in its second-quarter report.

Revenue for the quarter rose 145% to $117.8 million, far exceeding the consensus of $101.4 million. The increase was driven by growth in the thermal barrier segment, which saw revenue increase 540% year over year to $80.8 million. Its PyroThin cell-to-cell barriers help improve the safety and performance of lithium-ion and other EV battery types and are clearly finding a customer base.

The segment’s strength drove adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) up 124% to $28.9 million, with earnings per share of $0.21, up from a loss per share of $0.22 in the year-ago quarter and beating estimates of just $0.05.

CEO Don Young said, “This quarter’s results demonstrate significant operating leverage of our business model as we continue to leverage a higher percentage of our current capabilities and successfully execute on our strategy.”

Will Aspen Aerogels maintain its momentum?

Aspen forecasts strong revenue growth for the full year, but at a slower pace than in the second quarter.

It raised its revenue forecast from at least $380 million to at least $390 million, or at least 63% growth. The company also forecast earnings per share of $0.09.

That indicates a significant slowdown from the first half, but the outlook is likely cautious. If Aspen can deliver more quarters like this one, the stock will surely rise.