Intrinsic value of Aspen Aerogels - ASPN

Previous Close

$4.38

  Intrinsic Value

$1.05

stock screener

  Rating & Target

str. sell

-76%

Previous close

$4.38

 
Intrinsic value

$1.05

 
Up/down potential

-76%

 
Rating

str. sell

We calculate the intrinsic value of ASPN stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 0001), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 0.1

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2
   3
   4
   5
   6
   7
   8
   9
   10
   11
   12
   13
   14
   15
   16
   17
   18
   19
   20
   21
   22
   23
   24
   25
   26
   27
   28
   29
   30
   31

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  2.00
  2.30
  2.57
  2.81
  3.03
  3.23
  3.41
  3.57
  3.71
  3.84
  3.95
  4.06
  4.15
  4.24
  4.31
  4.38
  4.44
  4.50
  4.55
  4.59
  4.64
  4.67
  4.70
  4.73
  4.76
  4.78
  4.81
  4.83
  4.84
  4.86
Revenue, $m
  114
  116
  119
  123
  127
  131
  135
  140
  145
  151
  157
  163
  170
  177
  185
  193
  201
  210
  220
  230
  241
  252
  264
  276
  289
  303
  318
  333
  349
  366
Variable operating expenses, $m
  123
  126
  129
  133
  137
  141
  146
  151
  157
  163
  169
  176
  183
  191
  199
  208
  217
  227
  237
  248
  260
  272
  285
  298
  312
  327
  343
  360
  377
  395
Fixed operating expenses, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  123
  126
  129
  133
  137
  141
  146
  151
  157
  163
  169
  176
  183
  191
  199
  208
  217
  227
  237
  248
  260
  272
  285
  298
  312
  327
  343
  360
  377
  395
Operating income, $m
  -9
  -9
  -10
  -10
  -10
  -10
  -11
  -11
  -12
  -12
  -13
  -13
  -14
  -14
  -15
  -15
  -16
  -17
  -18
  -18
  -19
  -20
  -21
  -22
  -23
  -24
  -25
  -27
  -28
  -29
EBITDA, $m
  2
  2
  2
  2
  2
  2
  2
  2
  2
  2
  2
  3
  3
  3
  3
  3
  3
  3
  3
  4
  4
  4
  4
  4
  4
  5
  5
  5
  5
  6
Interest expense (income), $m
  0
  0
  0
  0
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  2
  2
  2
  2
  2
  2
  3
  3
  3
  3
  3
  4
  4
  4
  4
  5
  5
Earnings before tax, $m
  -9
  -10
  -10
  -10
  -11
  -11
  -12
  -12
  -13
  -13
  -14
  -14
  -15
  -16
  -16
  -17
  -18
  -19
  -20
  -21
  -22
  -23
  -24
  -26
  -27
  -28
  -30
  -31
  -33
  -34
Tax expense, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Net income, $m
  -9
  -10
  -10
  -10
  -11
  -11
  -12
  -12
  -13
  -13
  -14
  -14
  -15
  -16
  -16
  -17
  -18
  -19
  -20
  -21
  -22
  -23
  -24
  -26
  -27
  -28
  -30
  -31
  -33
  -34

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  126
  129
  132
  136
  140
  144
  149
  155
  160
  166
  173
  180
  188
  196
  204
  213
  222
  232
  243
  254
  266
  278
  291
  305
  320
  335
  351
  368
  386
  405
Adjusted assets (=assets-cash), $m
  126
  129
  132
  136
  140
  144
  149
  155
  160
  166
  173
  180
  188
  196
  204
  213
  222
  232
  243
  254
  266
  278
  291
  305
  320
  335
  351
  368
  386
  405
Revenue / Adjusted assets
  0.905
  0.899
  0.902
  0.904
  0.907
  0.910
  0.906
  0.903
  0.906
  0.910
  0.908
  0.906
  0.904
  0.903
  0.907
  0.906
  0.905
  0.905
  0.905
  0.906
  0.906
  0.906
  0.907
  0.905
  0.903
  0.904
  0.906
  0.905
  0.904
  0.904
Average production assets, $m
  82
  83
  86
  88
  91
  94
  97
  100
  104
  108
  112
  117
  122
  127
  132
  138
  144
  151
  157
  165
  172
  180
  189
  198
  207
  217
  228
  238
  250
  262
Working capital, $m
  19
  20
  20
  21
  22
  22
  23
  24
  25
  26
  27
  28
  29
  30
  32
  33
  34
  36
  38
  39
  41
  43
  45
  47
  49
  52
  54
  57
  60
  63
Total debt, $m
  4
  5
  5
  6
  7
  8
  8
  9
  11
  12
  13
  14
  16
  17
  19
  20
  22
  24
  26
  28
  30
  32
  35
  37
  40
  43
  46
  49
  52
  56
Total liabilities, $m
  23
  24
  24
  25
  26
  27
  28
  29
  30
  31
  32
  33
  35
  36
  38
  39
  41
  43
  45
  47
  49
  51
  54
  56
  59
  62
  65
  68
  71
  75
Total equity, $m
  103
  105
  108
  111
  114
  118
  122
  126
  131
  136
  141
  147
  153
  159
  166
  174
  181
  189
  198
  207
  217
  227
  237
  249
  261
  273
  286
  300
  314
  330
Total liabilities and equity, $m
  126
  129
  132
  136
  140
  145
  150
  155
  161
  167
  173
  180
  188
  195
  204
  213
  222
  232
  243
  254
  266
  278
  291
  305
  320
  335
  351
  368
  385
  405
Debt-to-equity ratio
  0.040
  0.040
  0.050
  0.050
  0.060
  0.060
  0.070
  0.080
  0.080
  0.090
  0.090
  0.100
  0.100
  0.110
  0.110
  0.120
  0.120
  0.130
  0.130
  0.130
  0.140
  0.140
  0.150
  0.150
  0.150
  0.160
  0.160
  0.160
  0.170
  0.170
Adjusted equity ratio
  0.815
  0.815
  0.815
  0.815
  0.815
  0.815
  0.815
  0.815
  0.815
  0.815
  0.815
  0.815
  0.815
  0.815
  0.815
  0.815
  0.815
  0.815
  0.815
  0.815
  0.815
  0.815
  0.815
  0.815
  0.815
  0.815
  0.815
  0.815
  0.815
  0.815

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -9
  -10
  -10
  -10
  -11
  -11
  -12
  -12
  -13
  -13
  -14
  -14
  -15
  -16
  -16
  -17
  -18
  -19
  -20
  -21
  -22
  -23
  -24
  -26
  -27
  -28
  -30
  -31
  -33
  -34
Depreciation, amort., depletion, $m
  11
  11
  11
  12
  12
  12
  13
  13
  14
  14
  15
  16
  16
  17
  18
  18
  19
  20
  21
  22
  23
  24
  25
  26
  28
  29
  30
  32
  33
  35
Funds from operations, $m
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
Change in working capital, $m
  0
  0
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  2
  2
  2
  2
  2
  2
  2
  2
  2
  2
  3
  3
  3
Cash from operations, $m
  1
  1
  1
  1
  1
  1
  1
  1
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -2
  -2
  -2
  -2
  -2
Maintenance CAPEX, $m
  -11
  -11
  -11
  -11
  -12
  -12
  -12
  -13
  -13
  -14
  -14
  -15
  -16
  -16
  -17
  -18
  -18
  -19
  -20
  -21
  -22
  -23
  -24
  -25
  -26
  -28
  -29
  -30
  -32
  -33
New CAPEX, $m
  -1
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -5
  -5
  -5
  -5
  -6
  -6
  -6
  -7
  -7
  -8
  -8
  -8
  -9
  -9
  -10
  -10
  -11
  -12
  -12
Cash from investing activities, $m
  -12
  -13
  -13
  -13
  -15
  -15
  -15
  -16
  -17
  -18
  -18
  -20
  -21
  -21
  -22
  -24
  -24
  -25
  -27
  -28
  -30
  -31
  -32
  -34
  -35
  -38
  -39
  -41
  -44
  -45
Free cash flow, $m
  -11
  -12
  -12
  -13
  -14
  -14
  -15
  -16
  -17
  -17
  -18
  -19
  -20
  -21
  -22
  -24
  -25
  -26
  -27
  -29
  -30
  -32
  -34
  -35
  -37
  -39
  -41
  -43
  -46
  -48
Issuance/(repayment) of debt, $m
  0
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  2
  2
  2
  2
  2
  2
  2
  2
  2
  3
  3
  3
  3
  3
  3
  3
Issuance/(repurchase) of shares, $m
  11
  12
  13
  13
  14
  15
  16
  16
  17
  18
  19
  20
  21
  22
  23
  25
  26
  27
  29
  30
  32
  33
  35
  37
  39
  41
  43
  45
  47
  50
Cash from financing (excl. dividends), $m  
  11
  13
  14
  14
  15
  16
  17
  17
  18
  19
  20
  21
  22
  23
  25
  27
  28
  29
  31
  32
  34
  35
  37
  40
  42
  44
  46
  48
  50
  53
Total cash flow (excl. dividends), $m
  0
  1
  1
  1
  1
  1
  1
  2
  2
  2
  2
  2
  2
  2
  2
  3
  3
  3
  3
  3
  3
  4
  4
  4
  4
  4
  5
  5
  5
  5
Retained Cash Flow (-), $m
  -11
  -12
  -13
  -13
  -14
  -15
  -16
  -16
  -17
  -18
  -19
  -20
  -21
  -22
  -23
  -25
  -26
  -27
  -29
  -30
  -32
  -33
  -35
  -37
  -39
  -41
  -43
  -45
  -47
  -50
Prev. year cash balance distribution, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
  -11
  -11
  -12
  -12
  -13
  -14
  -14
  -15
  -16
  -16
  -17
  -18
  -19
  -20
  -21
  -22
  -23
  -24
  -26
  -27
  -28
  -30
  -31
  -33
  -35
  -36
  -38
  -40
  -42
  -44
Discount rate, %
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
  -10
  -10
  -10
  -10
  -10
  -10
  -10
  -9
  -9
  -9
  -8
  -8
  -7
  -7
  -6
  -6
  -5
  -4
  -4
  -3
  -3
  -2
  -2
  -2
  -1
  -1
  -1
  -1
  0
  0
Current shareholders' claim on cash, %
  90.4
  81.2
  72.7
  65.0
  57.9
  51.5
  45.6
  40.4
  35.7
  31.5
  27.8
  24.4
  21.5
  18.8
  16.5
  14.5
  12.6
  11.1
  9.7
  8.4
  7.3
  6.4
  5.6
  4.9
  4.2
  3.7
  3.2
  2.8
  2.4
  2.1

Aspen Aerogels, Inc. is an energy technology company that designs, develops and manufactures aerogel insulation used primarily in energy infrastructure facilities. The Company also performs contract research services for various federal and non-federal government agencies, including the Department of Defense, the Department of Energy and other institutions. Its product lines include Pyrogel and Cryogel. The Company provides Pyrogel XT/XT-E that reduces the risk of corrosion under insulation in high temperature operating systems; Pyrogel XTF, which provides protection against fire; Cryogel Z, which is designed for sub-ambient and cryogenic applications in the energy infrastructure market, and Spaceloft Subsea, which is used in pipe-in-pipe applications in offshore oil production. It also offers Spaceloft for use in building and construction market, and Cryogel X201, which is used in cold system designs consisting of refrigerated appliances, cold storage equipment and aerospace systems.

FINANCIAL RATIOS  of  Aspen Aerogels (ASPN)

Valuation Ratios
P/E Ratio -8.5
Price to Sales 0.9
Price to Book 0.9
Price to Tangible Book
Price to Cash Flow -102.4
Price to Free Cash Flow -7.3
Growth Rates
Sales Growth Rate -4.1%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -40.9%
Cap. Spend. - 3 Yr. Gr. Rate 34.1%
Financial Strength
Quick Ratio NaN
Current Ratio 0
LT Debt to Equity 0%
Total Debt to Equity 0%
Interest Coverage 0
Management Effectiveness
Return On Assets -8.7%
Ret/ On Assets - 3 Yr. Avg. -23%
Return On Total Capital -10.1%
Ret/ On T. Cap. - 3 Yr. Avg. -26.9%
Return On Equity -10.1%
Return On Equity - 3 Yr. Avg. -76%
Asset Turnover 0.9
Profitability Ratios
Gross Margin 19.5%
Gross Margin - 3 Yr. Avg. 18.8%
EBITDA Margin -1.7%
EBITDA Margin - 3 Yr. Avg. -17.8%
Operating Margin -9.3%
Oper. Margin - 3 Yr. Avg. -10%
Pre-Tax Margin -10.2%
Pre-Tax Margin - 3 Yr. Avg. -26.6%
Net Profit Margin -10.2%
Net Profit Margin - 3 Yr. Avg. -26.6%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 0%
Payout Ratio 0%

ASPN stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the ASPN stock intrinsic value calculation we used $111.631 million for the last fiscal year's total revenue generated by Aspen Aerogels. The default revenue input number comes from 0001 income statement of Aspen Aerogels. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our ASPN stock valuation model: a) initial revenue growth rate of 2% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.3%, whose default value for ASPN is calculated based on our internal credit rating of Aspen Aerogels, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Aspen Aerogels.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of ASPN stock the variable cost ratio is equal to 108%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for ASPN stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 9.8% for Aspen Aerogels.

Corporate tax rate of 27% is the nominal tax rate for Aspen Aerogels. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the ASPN stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for ASPN are equal to 71.6%.

Life of production assets of 7.5 years is the average useful life of capital assets used in Aspen Aerogels operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for ASPN is equal to 17.1%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $100.943 million for Aspen Aerogels - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 23.94 million for Aspen Aerogels is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Aspen Aerogels at the current share price and the inputted number of shares is $0.1 billion.

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COMPANY NEWS

▶ Aspen Aerogels: 2Q Earnings Snapshot   [Aug-03-18 05:12AM  Associated Press]
▶ Aspen Aerogels: 1Q Earnings Snapshot   [May-04-18 05:07AM  Associated Press]
▶ Aspen Aerogels reports 4Q loss   [Feb-22-18 05:15PM  Associated Press]
▶ Aspen Aerogels reports 3Q loss   [Nov-02-17 06:46PM  Associated Press]
▶ Aspen Aerogels reports 2Q loss   [Aug-04-17 01:09AM  Associated Press]
▶ Aspen Aerogels Introduces Pyrogel® HPS   [Jul-17-17 04:36PM  PR Newswire]
▶ ETFs with exposure to Aspen Aerogels, Inc. : May 22, 2017   [May-22-17 01:22PM  Capital Cube]
▶ ETFs with exposure to Aspen Aerogels, Inc. : May 11, 2017   [May-11-17 04:10PM  Capital Cube]
▶ Aspen Aerogels reports 1Q loss   [May-04-17 07:16PM  Associated Press]
▶ Aspen Aerogels reports 4Q loss   [Feb-23-17 06:17PM  Associated Press]
▶ 3 Small Cap-Growth Stocks for a Trump Economy   [Feb-03-17 03:01PM  TheStreet.com]
▶ Hedge Funds Are Betting On Radiant Logistics Inc (RLGT)   [Dec-14-16 01:01PM  at Insider Monkey]

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