Why Aspen Aerogels Stock Was Soaring This Week

Shares of Aspen Aerogels (NYSE:ASPN), a maker of industrial lubricants used to make lithium-ion batteries run longer and for other purposes like insulation, surged this week after the company delivered another round of soaring growth in its second-quarter earnings report, easily beating analyst estimates.

According to data from S&P Global Market Intelligence, the stock finished the week up 15.7%.

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Aspen's growth catapults again

The primary reason for Aspen's gains this week was surging revenue and profits in its second-quarter report.

Revenue in the quarter jumped 145% to $117.8 million, well ahead of the consensus at $101.4 million. That growth was driven by a surge in the thermal barriers segment, which featured 540% year-over-year revenue growth to $80.8 million. Its PyroThin cell-to-cell barriers help improve safety and performance in lithium-ion batteries and other types of EV batteries and are clearly finding a customer base.

Strength in that segment helped drive adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) up 124% to $28.9 million, and it posted earnings per share of $0.21, up from a per-share loss of $0.22 in the quarter a year ago and better than estimates at just $0.05.

CEO Don Young said, "This quarter's results demonstrate the significant operating leverage of our business model as we continue to utilize a higher percentage of our current capacity and effectively execute our strategy."

Can Aspen Aerogels keep up the momentum?

Aspen called for strong revenue growth for the full year, but at a slower pace than the second quarter.

It raised its revenue guidance from at least $380 million to at least $390 million, or at least 63% growth. The company also forecast earnings per share of $0.09.

That indicates a substantial slowdown from the first half, but the guidance is likely conservative. If Aspen can deliver more quarters like this, the stock will surely move higher.

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Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.