Aspen Aerogels, Inc.'s (NYSE:ASPN): Aspen Aerogels, Inc., an aerogel technology company, designs, develops, manufactures, and sells aerogel insulation products primarily for use in the energy infrastructure and building materials markets worldwide. The US$149m market-cap company’s loss lessens since it announced a -US$34.4m bottom-line in the full financial year, compared to the latest trailing-twelve-month loss of -US$32.0m, as it approaches breakeven. As path to profitability is the topic on ASPN’s investors mind, I’ve decided to gauge market sentiment. I’ve put together a brief outline of industry analyst expectations for ASPN, its year of breakeven and its implied growth rate.
According to the 4 industry analysts covering ASPN, the consensus is breakeven is near. They anticipate the company to incur a final loss in 2021, before generating positive profits of US$16m in 2022. ASPN is therefore projected to breakeven around 3 years from now. What rate will ASPN have to grow year-on-year in order to breakeven on this date? Using a line of best fit, I calculated an average annual growth rate of 65%, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.
Given this is a high-level overview, I won’t go into details of ASPN’s upcoming projects, but, bear in mind that generally oil and gas companies, depending on the stage of operation and resource produced, have irregular periods of cash flow. This means, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.
Before I wrap up, there’s one aspect worth mentioning. ASPN has managed its capital judiciously, with debt making up 4.8% of equity. This means that ASPN 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 ASPN which are not covered in this article, but I must stress again that this is merely a basic overview. For a more comprehensive look at ASPN, take a look at ASPN’s company page on Simply Wall St. I’ve also compiled a list of important factors you should further examine:
- Valuation: What is ASPN worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether ASPN is currently mispriced by the market.
- Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Aspen Aerogels’s board and the CEO’s back ground.
- 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.
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