Why Aspen Aerogels Stock Soared This Week

Actions of Aspen Airgels (ASPN 1.82%)a maker of industrial lubricants used to make lithium-ion batteries work longer and for other purposes, such as insulation, rose this week after the company delivered another round of soaring growth in its earnings report from second quarter, easily beating analysts’ estimates.

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

Image source: Getty Images.

Aspen’s growth is catapulting again

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

Revenue for the quarter rose 145% to $117.8 million, well ahead of the $101.4 million consensus. This increase was driven by growth in the Thermal Barriers segment, which saw a 540% year-over-year increase in revenue to $80.8 million. PyroThin’s cell-to-cell barriers help improve the safety and performance of lithium-ion and other types of EV batteries, and are clearly finding a customer base.

Strength in that segment helped boost adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) by 124% to $28.9 million and post earnings per share of $0.21, up from a loss per share of $0.22 in the quarter. now even better than estimates at just $0.05.

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

Can Aspen Airgels Keep Up The Momentum?

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

It raised its revenue guidance from at least $380 million to at least $390 million, or an increase of at least 63 percent. The company also estimated earnings per share of $0.09.

This indicates a substantial slowdown from the first half, but the guidance is likely conservative. If Aspen can deliver more quarters like this, the stock is sure to move higher.