A week ago, Aspen Aerogels, Inc. (NYSE:ASPN) came out with a strong set of first-quarter numbers that could potentially lead to a re-rate of the stock. Revenue crushed expectations at US$95m, beating expectations by 25%. Aspen Aerogels reported a statutory loss of US$0.02 per share, which - although not amazing - was much smaller than the analysts predicted. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Taking into account the latest results, the most recent consensus for Aspen Aerogels from nine analysts is for revenues of US$393.5m in 2024. If met, it would imply a major 37% increase on its revenue over the past 12 months. Aspen Aerogels is also expected to turn profitable, with statutory earnings of US$0.066 per share. Before this latest report, the consensus had been expecting revenues of US$362.1m and US$0.19 per share in losses. So we can see there's been a pretty clear upgrade to expectations following the latest results, with a small increase to revenues expected to lead to profitability earlier than previously forecast.
It will come as no surprise to learn that the analysts have increased their price target for Aspen Aerogels 32% to US$26.80on the back of these upgrades. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. 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.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's clear from the latest estimates that Aspen Aerogels' rate of growth is expected to accelerate meaningfully, with the forecast 52% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 16% p.a. 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. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Aspen Aerogels going out to 2026, and you can see them free on our platform here..
Don't forget that there may still be risks. For instance, we've identified 3 warning signs for Aspen Aerogels (1 is concerning) you should be aware of.
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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.