Aspen Aerogels (NYSE:ASPN) has been pivoting its business to become a key supplier to the burgeoning electric vehicle (EV) market. The business’s gross margins have steadily climbed from 11% to 37% over the past five quarters, grabbing investors’ attention and driving the stock up 63.56% in the past week. The potential for further progress and revenue growth points to the likelihood of ongoing positive momentum in the stock, making it a compelling option for investors.
Aspen Aerogels’ Award-winning Technology
Aspen Aerogels produces nanoporous, low-density, lightweight materials that can be customized to offer high thermal resistance, superior fire reaction, electrical conductivity, hydrophobicity, and vapor porosity. Initially, the technology was used in large-scale energy infrastructure facilities. However, the company has pivoted to focus on expanding into the EV market and has made substantial progress in supplying major EV producers such as GM (NYSE:GM) and Honda (NYSE:HMC).
Moreover, the company was awarded the Automotive News PACE Award for its groundbreaking work in thermal barrier technology. This award spotlights those who have shown extraordinary innovation and technological progress, contributing to establishing industry benchmarks and identifying best practices.
Aspen’s Surging Financial Results & Outlook
The company recently announced financial results for Q1 2024. It ended the quarter with cash and equivalents worth $101.5 million, with revenues of $94.5 million, marking a 107% increase from $45.6 million in Q1 2023. Despite this, the company recorded a net loss of -$1.8 million, or -$0.02 per share, an improvement from the -$16.8 million net loss and -$0.24 per share noted in the same period of the previous year.
Based on the strength of improvement in the first quarter, management has updated its 2024 full-year outlook, increasing projected revenue to $380 million, adjusted EBITDA of $55 million, net income of $2 million, and earnings per share of $0.03.
Is ASPN Stock a Buy?
Aspen Aerogels has been rated as a Strong Buy by ten Wall Street analysts who have issued recommendations and 12-month price targets over the past three months.. The average price target for ASPN stock is $25.90, representing little change from current levels.
The stock has been trending, climbing over 238% in the past year. It trades at the upper end of the 52-week price range of $5.32-$25.90 and demonstrates ongoing positive price momentum, trading above the 20-day (17.49) and 50-day (16.41) moving averages.
Final Analysis on ASPN Stock
Aspen Aerogels has made a successful shift in applying its technology to products for the surging EV market, positioning it for robust potential growth. The shares have shown positive momentum, with expectations of growing revenues that could catalyze them higher. So Investors looking for stock with exposure to the EV market may find ASPN a compelling option.
