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With the business potentially at an important milestone, we thought we'd take a closer look at Aspen Aerogels, Inc.'s (NYSE:ASPN) future prospects. Aspen Aerogels, Inc. designs, develops, manufactures, and sells aerogel insulation products primarily for use in the energy infrastructure and building materials markets worldwide. With the latest financial year loss of US$15m and a trailing-twelve-month loss of US$17m, the US$432m market-cap company amplified its loss by moving further away from its breakeven target. The most pressing concern for investors is Aspen Aerogels' path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.
According to the 6 industry analysts covering Aspen Aerogels, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2022, before generating positive profits of US$9.3m in 2023. The company is therefore projected to breakeven around 3 years from today. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 61% is expected, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.
Underlying developments driving Aspen Aerogels' growth isn’t the focus of this broad overview, though, keep in mind that by and large an energy business has lumpy cash flows which are contingent on the natural resource and stage at which the company is operating. So, a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital prudently, with debt making up 6.0% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.
There are key fundamentals of Aspen Aerogels which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Aspen Aerogels, take a look at Aspen Aerogels' company page on Simply Wall St. We've also put together a list of relevant aspects you should look at:
Historical Track Record: What has Aspen Aerogels' performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Aspen Aerogels' board and the CEO’s background.
Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
This article by Simply Wall St is general in nature. 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.
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