Why the Carbon Revolution (ASX:CBR) share price soared 14% higher today

The Carbon Revolution share price is soaring 14% higher today following on the release of its quarterly activities report.

| More on:
A happy businessman pointing up, inidicating a rise in share price

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Carbon Revolution Ltd (ASX: CBR) share price was soaring 14% higher today on the release of its quarterly activities report this morning.

A relative newcomer to the ASX, the Carbon Revolution share price hit an all-time high of $4.47 per share on 24 January. Then the coronavirus pandemic struck and by 23 March the share price had plummeted by 82%.

The company has come back strongly since then, with today's gains bringing the share price up 254% from the 23 March lows.

Year-to-date, the share price is down 17%. By comparison the All Ordinaries Index (ASX: XAO) is down 6% in 2020.

What does Carbon Revolution do?

Carbon Revolution is an Australian company that innovates and commercialises carbon fibre wheels for the global automotive industry. The company designs and manufactures high-performing wheels for some of the fastest street cars and top-quality brand names in the world.

Carbon Revolution's shares first began trading on the ASX in November 2019.

Why is the Carbon Revolution share price soaring?

Despite noting that the pandemic continued to cause disruptions as the virus impacted customers, Carbon Revolution reported quarterly recognised revenue of $11.8 million. That's up 45.9% on the previous quarter and up 26.3% on the previous corresponding period (pcp).

Commercialisation of the company's new "fascia" technology has also begun with initial customer approval. According to the report, the technology "dramatically improves the conversion of moulded wheels to sold wheels and, in turn, drives a significant reduction in labour cost per wheel". The company expects its first deliveries will start in the next quarter.

In addition, Carbon Revolution announced that upgrades to its high-pressure moulding equipment and installation of a new automated face layup line have been completed. This provides it with enough moulding capacity for its contracted programs (both announced and unannounced).

The company's cash balance at the end of this quarter was $19.6 million. It said the business was funded for its FY21 operational goals.

Looking ahead, the company expects strong sales growth in the 2021 financial year. In addition, over the next 3 quarters, net cash flow from operating activities will be positive. The report also noted that the Federal Government JobKeeper package should support a proportion of wages while the company remained eligible under the JobKeeper scheme.

The Carbon Revolution share price has retreated slightly since its 14% morning high. It is now trading at $2.80, up 11.55% at the time of writing. On a day the All Ords is slipping, it appears that investors are happy with the company's quarterly performance.

Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Carbon Revolution Limited. The Motley Fool Australia has recommended Carbon Revolution Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Share Market News

Businessman smiles with arms outstretched after receiving good news.
Share Gainers

Here are the top 10 ASX 200 shares today

It was another strong showing from the share market today.

Read more »

Three miners looking at a tablet.
Resources Shares

Own ASX mining shares? Experts say an upswing in commodity prices has begun

HSBC economists Paul Bloxham and Jamie Culling explain why global commodity prices are rising.

Read more »

A woman with a sad face looks to be receiving bad news on her phone as she holds it in her hands and looks down at it.
Share Fallers

Why Brambles, Lifestyle Communities, Northern Star, and Select Harvests shares are sinking

These shares are having a tough session. But why?

Read more »

A young woman sits at her desk in deep contemplation with her hand to her chin while seriously considering information she is reading on her laptop
Share Market News

Will the Reserve Bank wait for the US Fed to cut interest rates first?

Here's when AMP thinks interest rates will be cut in the US, Australia, New Zealand, Canada and the Eurozone.

Read more »

A young woman holding her phone smiles broadly and looks excited, after receiving good news.
Share Gainers

Healthco Healthcare, Medadvisor, Ramsay Health Care, and Tamboran shares are rising

These shares are having a strong session. But why?

Read more »

drug capsule opening up to reveal dollar signs signifying rising asx share price
Share Gainers

If you invested $6,000 in Mesoblast shares a month ago you'd have $15,636 now!

Mesoblast shares have been on a tear this past month. But why?

Read more »

Gold bars on top of gold coins.

Is it too late to buy gold as an investment in 2024?

Can we still take advantage of gold at new record highs?

Read more »

A female broker in a red jacket whispers in the ear of a man who has a surprised look on his face as she explains which two ASX 200 shares should do well in today's volatile climate
Mergers & Acquisitions

Wesfarmers shares baulk on fresh acquisition gossip

A healthcare company gone nowhere in a decade might be on Wesfarmers' radar.

Read more »