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1. Company Snapshot

1.a. Company Description

Aspen Aerogels, Inc.designs, develops, manufactures, and sells aerogel insulation products primarily for use in the energy infrastructure and building materials markets in the United States, Asia, Canada, Europe, and Latin America.The company offers PyroThin thermal barriers for use in lithium-ion batteries in electric vehicles and energy storage industries; Pyrogel XTE that reduces the risk of corrosion under insulation in energy infrastructure operating systems; Pyrogel HPS for applications within the power generation market; Pyrogel XTF to provide protection against fire; Cryogel Z for sub-ambient and cryogenic applications in the energy infrastructure market; and Spaceloft Subsea for use in pipe-in-pipe applications in offshore oil production.


It also offers Spaceloft Grey and Spaceloft A2 for use in the building materials market; and Cryogel X201, which is used in designing cold systems, such as refrigerated appliances, cold storage equipment, and aerospace systems.The company was founded in 2001 and is headquartered in Northborough, Massachusetts.

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1.b. Last Insights on ASPN

Negative drivers behind Aspen Aerogels' recent performance include uncertainty surrounding the EV tax credit, which could impact the company's growth. The potential elimination of the credit may slow US EV sales, limiting Aspen's revenue expansion. Additionally, Tesla's declining market share could hinder Aspen's growth, as the company's success is tied to the EV market. Furthermore, international markets offer expansion opportunities, but the company's growth is still heavily reliant on the US EV market.

1.c. Company Highlights

2. Aspen Aerogels' Q3 2025 Earnings: Navigating Challenges Ahead

Aspen Aerogels Inc. reported Q3 2025 revenue of $73 million, a 6% decline quarter-over-quarter, driven by a 12% decrease in Thermal Barrier revenues to $48.7 million, partially offset by a 7% increase in Energy Industrial revenues to $24.3 million. Gross profit decreased 18% to $20.8 million, with a gross margin of 28.5%, due to lower volume and increased scrap rates. The actual EPS came out at '-0.06', beating estimates at '-0.2148'. Adjusted EBITDA declined $3.5 million to $6.3 million.

Publication Date: Nov -23

📋 Highlights
  • Q3 Revenue Decline:: Revenue fell 6% QoQ to $73M, with Thermal Barrier down 12% to $48.7M and Energy Industrial up 7% to $24.3M.
  • Gross Profit Drop:: Gross profit declined 18% to $20.8M (28.5% margin), driven by lower volume and higher scrap rates.
  • Q4 Guidance:: Revenue projected at $40–50M, with adjusted EBITDA expected to range from -$14M to -$6M, reflecting ongoing challenges.
  • 2026 Financial Framework:: CFO targets $135M Thermal Barrier revenue at full IHS volumes and EBITDA breakeven at $200M total revenue.
  • 2027 Growth Outlook:: EV market recovery, including $10–15M from European EV demand, and battery storage partnerships expected to drive $150M+ revenue.

Outlook and Guidance

The company expects Q4 revenue between $40 million to $50 million, with adjusted EBITDA between negative $14 million to negative $6 million. For the full year, revenue is expected to be $270 million to $280 million, with adjusted EBITDA of $7 million to $15 million. Aspen's new CFO, Grant Thoele, outlined a financial framework for 2026, with potential revenue of $135 million in the Thermal Barrier segment at full IHS volumes, and a breakeven adjusted EBITDA threshold at $200 million revenue.

Cash Position and Covenant Relief

The company has over $150 million in cash and is engaging with lenders for near-term covenant relief. Aspen expects to maintain over $100 million in cash on its balance sheet at the end of 2026. The company's cash conservation strategy prioritizes efficient allocation of resources, with any capital investment requiring a business case review by the management team.

Growth Opportunities and Valuation

Aspen Aerogels has high barriers to entry, a deep IP moat, and strong sustainability tailwinds. The company is optimistic about the battery storage market and sees opportunities in data centers, building and construction, and other adjacent markets. With an EV/EBITDA ratio of 19.45, the market is pricing in a certain level of growth. Analysts estimate next year's revenue growth at -13.8%. The company's lean operating cost structure is designed to generate substantial profits from incremental growth.

Operational Highlights

Aspen's Aerogel products serve 2 core markets with a highly specialized value proposition. The company has aggressively pursued the EV opportunity, improving technology, manufacturing capabilities, and footprint. A new European OEM award is expected to contribute $150 million in revenue at full volumes, with a discount to that being beneficial to the P&L. The company has available capacity at its East Providence plant and external manufacturing partner to meet demand, both domestically and internationally.

3. NewsRoom

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Here's What Key Metrics Tell Us About Aspen Aerogels (ASPN) Q3 Earnings

Nov -07

Source: zacks.com

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Aspen Aerogels, Inc. (ASPN) Q3 2025 Earnings Call Transcript

Nov -06

Source: seekingalpha.com

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Aspen Aerogels, Inc. Reports Third Quarter 2025 Financial Results and Recent Business Highlights

Nov -06

Source: globenewswire.com

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Quanex Building Products (NYSE:NX) vs. Aspen Aerogels (NYSE:ASPN) Financial Survey

Oct -26

Source: defenseworld.net

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Aspen Aerogels, Inc. (NYSE:ASPN) Receives Consensus Recommendation of “Hold” from Analysts

Oct -22

Source: defenseworld.net

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Aspen Aerogels, Inc. Schedules Third Quarter 2025 Earnings Release and Conference Call

Oct -16

Source: globenewswire.com

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Aspen Aerogels, Inc. Schedules Third Quarter 2025 Earnings Release and Conference Call

Oct -16

Source: globenewswire.com

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Aspen Aerogels, Inc. Appoints Glenn Deegan as Chief Administrative Officer

Sep -22

Source: globenewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (7.46%)

6. Segments

Energy Industrial

Expected Growth: 4.83%

Aspen Aerogels' Energy Industrial segment growth of 4.83% is driven by increasing demand for energy-efficient solutions, rising adoption of sustainable practices, and growing investments in renewable energy projects. Additionally, the company's innovative aerogel-based insulation products and strategic partnerships contribute to its market share expansion.

Thermal Barrier

Expected Growth: 10.55%

Aspen Aerogels' Thermal Barrier segment growth of 10.55% is driven by increasing demand for energy-efficient buildings, stringent building codes, and rising adoption in aerospace and defense applications. Additionally, the company's innovative products, expanding distribution channels, and strategic partnerships contribute to its growth momentum.

7. Detailed Products

Aerogel Insulation Blankets

High-temperature insulation blankets for industrial and commercial applications

Pyrogel XTE

High-temperature insulation material for extreme temperature applications

Cryogel Z

Cryogenic insulation material for extremely low-temperature applications

Spaceloft Subsea

Insulation material for subsea oil and gas applications

Spaceloft Airlift

Insulation material for aerospace and defense applications

8. Aspen Aerogels, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Aspen Aerogels, Inc. has a unique product that is not easily substitutable, reducing the threat of substitutes.

Bargaining Power Of Customers

Aspen Aerogels, Inc. has a diverse customer base, but some large customers may have bargaining power due to their significant purchases.

Bargaining Power Of Suppliers

Aspen Aerogels, Inc. has a diverse supplier base, reducing the bargaining power of individual suppliers.

Threat Of New Entrants

The high-tech industry is constantly evolving, and new entrants may emerge with innovative products, posing a threat to Aspen Aerogels, Inc.'s market share.

Intensity Of Rivalry

Aspen Aerogels, Inc. operates in a competitive industry, but the company's unique products and strong brand recognition help to mitigate the intensity of rivalry.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 19.32%
Debt Cost 3.95%
Equity Weight 80.68%
Equity Cost 13.82%
WACC 11.91%
Leverage 23.95%

11. Quality Control: Aspen Aerogels, Inc. passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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A-Score: 3.4/10

Value: 8.0

Growth: 6.9

Quality: 2.8

Yield: 0.0

Momentum: 1.0

Volatility: 1.7

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

3.61$

Current Price

3.61$

Potential

-0.00%

Expected Cash-Flows