Earnings Beat: Aspen Aerogels, Inc. (NYSE:ASPN) Just Beat Analyst Forecasts, And Analysts Have Been Lifting Their Forecasts

Aspen Aerogels, Inc. (NYSE:ASPN) just released its quarterly report and things are looking bullish. The results were impressive, with revenues of US$95m exceeding analyst forecasts by 25%, and statutory losses of US$0.02 were likewise much smaller than the analysts had forecast. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for Aspen Aerogels

Taking into account the latest results, the current consensus from Aspen Aerogels' nine analysts is for revenues of US$393.5m in 2024. This would reflect a huge 37% increase on its revenue over the past 12 months. Earnings are expected to improve, with Aspen Aerogels forecast to report a statutory profit of US$0.05 per share. Before this latest report, the consensus had been expecting revenues of US$362.1m and US$0.19 per share in losses. The analysts have definitely been lifting their expectations, with the company expected to reach profitability next year - sooner than expected - thanks to the small increase to revenue expectations.

It will come as no surprise to learn that the analysts have increased their price target for Aspen Aerogels 24% to US$25.20on the back of these upgrades. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Aspen Aerogels analyst has a price target of US$33.00 per share, while the most pessimistic values it at US$14.00. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Aspen Aerogels' past performance and to peers in the same industry. The analysts are definitely expecting Aspen Aerogels' growth to accelerate, with the forecast 52% annualised growth to the end of 2024 ranking favourably alongside historical growth of 16% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 4.8% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Aspen Aerogels is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away is that there's been a clear step-change in belief around the business' prospects, with the analysts now expecting Aspen Aerogels to become profitable next year. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

With that in mind, we wouldn't be too quick to come to a conclusion on Aspen Aerogels. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Aspen Aerogels analysts - going out to 2026, and you can see them free on our platform here.

Even so, be aware that Aspen Aerogels is showing 3 warning signs in our investment analysis , and 2 of those shouldn't be ignored...

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.