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Does Aspen Aerogels's (NYSE:ASPN) Share Price Gain of 44% Match Its Business Performance?

Simply Wall St

These days it's easy to simply buy an index fund, and your returns should (roughly) match the market. But you can significantly boost your returns by picking above-average stocks. To wit, the Aspen Aerogels, Inc. (NYSE:ASPN) share price is 44% higher than it was a year ago, much better than the market return of around 4.2% (not including dividends) in the same period. So that should have shareholders smiling. And shareholders have also done well over the long term, with an increase of 40% in the last three years.

See our latest analysis for Aspen Aerogels

Aspen Aerogels isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. When a company doesn't make profits, we'd generally expect to see good revenue growth. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.

In the last year Aspen Aerogels saw its revenue shrink by 2.2%. The stock is up 44% in that time, a fine performance given the revenue drop. We can correlate the share price rise with revenue or profit growth, but it seems the market had previously expected weaker results, and sentiment around the stock is improving.

The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).

NYSE:ASPN Income Statement, July 25th 2019

Take a more thorough look at Aspen Aerogels's financial health with this free report on its balance sheet.

A Different Perspective

It's nice to see that Aspen Aerogels shareholders have received a total shareholder return of 44% over the last year. Notably the five-year annualised TSR loss of 5.0% per year compares very unfavourably with the recent share price performance. The long term loss makes us cautious, but the short term TSR gain certainly hints at a brighter future. Most investors take the time to check the data on insider transactions. You can click here to see if insiders have been buying or selling.

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.