The Carbon Revolution share price closed at 12.5 cents yesterday and soared 84% to an intraday high of 23 cents this morning. At the time of writing, it's up 32% to 16.5 cents a share.

In contrast, the S&P/ASX 200 Index (ASX: XJO) is 0.57% in the red in late afternoon trade.

Let's take a look at what is going on with the Carbon Revolution share price.

Why is this ASX penny stock rising?

Carbon Revolution, based in Geelong, makes carbon fibre wheels for use in the automotive industry worldwide.

Investors appear to be buying up Carbon Revolution shares after the company secured US$60 million via a new debt program.

This will deliver net new funding for mega-line automation and capacity expansion, plus general corporate and working capital costs of up to US$37 million.

Carbon Revolution has been working with underwriter PIUS Limited to secure this multi-million dollar financing.

The funding means the company remains funded up to and after its proposed merger with Twin
Ridge Capital Acquisition Corp.

Commenting on the news, Carbon Revolution CEO Jake Dingle said:

Working with PIUS and our merger partners at Twin Ridge Acquisition Corp. has enabled us to access a specialised form of non-dilutive financing that leverages the strong base of intellectual property that we have developed through extensive research and development, and technology commercialisation, over the past fifteen years.

Carbon Revolution is expected to complete the merger with Twin Ridge Capital by July 2023.

In the third quarter of FY23, Carbon Revolution commenced a new wheel program and resumed production of the Corvette ZO6 wheel

The company touts that it makes light carbon fibre wheels for some of the "world's best and most sought after" cars.

Share price snapshot

The Carbon Revolution share price has shed 64% in the last year. However, in the last week, it has rocketed 26%.

This ASX penny stock has a market capitalisation of about $36 million.

The post Here's why ASX penny stock Carbon Revolution just exploded 84% appeared first on The Motley Fool Australia.

• Carbon Revolution share price exploding, up 17.26%
• Revenue up by 92.6%, according to quarterly update
• Wheel sales soared by 109.4%

The Carbon Revolution Ltd (ASX: CBR) share price is soaring today on the back of the company's quarterly update.

At the time of writing, shares in the lightweight carbon fibre wheelmaker are swapping hands for 99 cents. This is a 17.26% increase from yesterday's close.

Let's take a look at what Carbon Revolution announced today.

Carbon Revolution share price explodes amid quarterly results

The Geelong-based company revealed the following:

• Quarterly total revenue of $11.4 million, up 82.6% on the previous corresponding quarter (PCP) of Q1 FY22
• Wheel sales up 109.4% on the PCP to 4,397 wheels
• Cash balance of $47.8 million
• Net cash outflow of $16 million for the quarter, in line with expectations

What else happened in the quarter?

A highlight for the company was the news that its carbon fibre wheels would be used on General Motors' new Chevrolet C8 Corvette Z06 and Z07.

This is the first such partnership that Carbon Revolution has formed with the US-based car manufacturing giant.

Company managers also signed 2 new engineering deals. This includes an electric vehicle (EV) SUV deal.

What's next for Carbon Revolution?

In FY22, the company intends to produce more Ferraris and launch production of the Corvette Z06 and Z07 wheels.

Carbon Revolution managers hope to better the company's technology, equipment, and processes to improve its operations. The company is positive about its customer engagement on new initiatives and demand for its wheels.

In the company statement, Carbon Revolution said:

The global transition to electric vehicles is driving demand, with customers looking to benefit from the 40-50% weight savings of carbon fibre…

Carbon Revolution is optimistic that its sales outlook and new program pipeline is sound.

The company has 15 ongoing programs, including 8 awarded contracts and 7 design and engineering phase projects.

Carbon Revolution share price recap

The Carbon Revolution share price has gravitated downwards by 4.37% in 2022. Over the past 12 months, the share price has dropped 62.4%.

For perspective, the S&P/ASX 200 Index (ASX: XJO) has returned 5.2% in the past year.

Carbon Revolution has a market capitalisation of roughly $203 million based on its current share price.

The post Carbon Revolution (ASX:CBR) share price leaps 17% as sales surge appeared first on The Motley Fool Australia.

Below, we look at the carbon fibre wheel manufacturer's business update for the quarter ending 30 September (Q1 FY22).

What did Carbon Revolution report for Q1?

The Carbon Revolution share price is sliding today after the company reported a 28% quarter-on-quarter decrease in revenue. Q1 FY22 revenue came in at $6.2 million.

Revenue from Carbon Revolution's wheel sales was $5.9 million with $300,000 of revenue from engineering services and tooling.

The company said revenue was in line with its expectation for the full 2022 financial year, adding that "the planned inventory build-ahead is currently on track to support the expected second half weighting of FY22 sales".

According to the update, the 35% drop in the number of wheels sold in the past quarter (2,100) was largely due to semi-conductor chip shortages that have been hampering the global automotive industry. This saw the "GT500 wheel sales for model year 21 conclude earlier in Q1 FY22 than would otherwise have normally been expected".

Carbon Revolution said its customer orders and "their forecast profile", including Ferrari, indicated a lift in annual sales in the second half of the financial year.

The company has a cash balance of $63.9 million as at 30 September, saying the net cash outflow of $23.4 million in Q1 was in-line with its expectations.

Looking ahead, Carbon Revolution said with ongoing uncertainty about COVID-19's impact on the global car industry and semi-conductor chip shortages it would not provide sales guidance for FY22.

Looking at potential growth it added:

In contrast with this time last year, customers are now focusing on future product planning and the global move towards electric vehicles is an added factor driving this increasing engagement.

Carbon Revolution share price snapshot

The Carbon Revolution share price has been struggling in 2021, down 61%. By comparison the All Ordinaries Index (ASX: XAO) is up 11% year-to-date.

Over the past month Carbon Revolution shares are down 9%.

The post Carbon Revolution (ASX:CBR) share price sinks 7% on quarterly revenue drop appeared first on The Motley Fool Australia.

This follows on the release this morning of the carbon fibre wheel developer's results for the 2021 financial year (FY21).

Carbon Revolution share price rockets on FY21 results

• Total revenue of $34.9 million, down from $38.9 million in FY20
• Gross loss of $14.3 million compared to a loss of $11.6 million the previous year
• Total expenses of $24.3 million, down from $17.8 million
• Adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) came in at a loss of $17.2 million, compared to a loss of $15.7 million in FY20

What happened during the reporting period for Carbon Revolution?

Carbon Revolution reported significant influences to its business from COVID-19, with many of its customers negatively impacted by the pandemic. Revenues also came under pressure from the global semi-conductor chip shortage.

The company said the first and second half of the financial year were markedly different. H1 saw production volumes decrease along with additional finishing costs. In H2 production volumes picked up and Carbon Revolution implemented its Diamond Weave Technology. That technology led to lower finish costs and improved wheel aesthetic quality.

Two new Ferrari vehicles were released in FY21 equipped with Carbon Revolution wheels.

The company also completed a $95 million capital raise to support its "Phase 1 Mega-line expansion".

What did management say?

Commenting on the results, Carbon Revolution's CEO Jake Dingle said:

The global vehicle market's move toward electric vehicles and vehicles with large wheel formats represents a step change for the adoption of our wheel technology and the development of our company.

The broader industrialisation program is progressing, with Diamond Weave Technology introduced to dramatically improve the first-time aesthetic quality of the wheels. We have also commissioned a significant amount of new industrialised equipment, delivering the capacity required for awarded but not yet launched programs.

What's next for Carbon Revolution?

Looking ahead, Carbon Revolution said that with a strong balance sheet and having advanced its industrialisation activities, it's well positioned for the next stage of growth.

During the course of the year, the company secured agreements on 4 new wheel design and engineering programs. It said a "significant proportion of these" are higher volume platforms for EVs with large wheel formats. It expects these programs to enter production in the 2023 and 2024 calendar years.

The Carbon Revolution share price is down 29% over the past 12 months.

The post Carbon Revolution (ASX:CBR) share price surges 14% on growth outlook appeared first on The Motley Fool Australia.

Four ASX shares that have failed to follow the market higher today are listed below. Here's why they are tumbling:

Carbon Revolution Ltd (ASX: CBR)

The Carbon Revolution share price is down 13% to $1.34. Investors have been selling the carbon fibre wheels manufacturer's shares after it revealed that one of its major customers has suspended vehicle production due to the shortage of computer chips. As a result, Carbon Revolution believes it will sell around 1,800 fewer wheels in FY 2021 compared to FY 2020.

Fisher & Paykel Healthcare Corp Ltd (ASX: FPH)

The Fisher & Paykel Healthcare share price is down 4% to $30.45. This is despite there being no news out of the medical device company. However, with its full year results due to be released in a couple of days, some investors may be nervous. Especially given the high multiples that its shares trade on and the market's high expectations.

Nuix Ltd (ASX: NXL)

The Nuix share price has fallen 6% to $3.42. Investors may be selling the investigative analytics company's shares amid reports that a class action could be filed against it. According to the AFR, a number of class action firms have confirmed their interest in taking the company to court.

Paradigm Biopharmaceuticals Ltd (ASX: PAR)

The Paradigm share price has sunk 8% to $2.14. This morning the biopharmaceutical company provided the market with an update on its dealings with the US FDA. The release advised that Paradigm has received written feedback regarding the investigational new drug submission for its pivotal study evaluating PPS in knee osteoarthritis. The agency provided its suggested mitigation strategies to address its positions and questions, which include further detailed clinical monitoring.

The post Why Carbon Revolution, Fisher & Paykel, Nuix, & Paradigm are tumbling lower appeared first on The Motley Fool Australia.

The irony is that the surge in car sales is leaving the composite wheel maker behind in the dust, and you can thank COVID-19 for that.

The Carbon Revolution share price crashed 13.5% to $1.34 at the time of writing. The fall is on top of yesterday's 5.5% tumble – all of which came right at the market close.

Carbon Revolution share price is a wreck

This is because management released the disappointing news a few minutes before 4pm. It revealed that one of its major customers have suspended vehicle production due to the shortage of computer chips.

As a result, Carbon Revolution believes it will sell around 1,800 fewer wheels this financial year compared to FY20.

Management had previously forecast selling around the same number of wheels in FY21 as last year.

The customer in question is expected to restart its production line in late June.

Carbon Revolution share price in the slow land

The world-wide shortage of semi-conductor chips is driving up the price of vehicles around the world, including Australia.

The shortage of new vehicles has been met head-on with strong demand for cars. Consumers who can't travel and have limited alternative uses for their savings are spending big on new wheels.

The federal government is also pumping fuel into the tank. The extension of the instant tax write-off is also adding to demand for new vehicles.

ASX shares benefiting from car shortages

This is great news for the likes of the Eagers Automotive Ltd (ASX: APE) share price and Autosports Group Ltd (ASX: ASG) share price.

The lack of supply means car dealers do not have to offer discounts on new vehicles and can charge more for second hand vehicles that are ready for immediate delivery.

Auto parts makers are also smiling. The Bapcor Ltd (ASX: BAP) share price and ARB Corporation Limited (ASX: ARB) share price have also been outperforming over the past year.

Foolish takeaway

The supply chain dislocation is creating winners and losers in the auto industry. New car manufacturers and their suppliers are suffering, while dealers are revving up their engines.

But at least the headwind is temporary. It's a question of "when" and not "if" supply chains normalise to give the Carbon Revolution share price a chance to play catch-up.

On the other hand, the road to recovery could be a winding one. Just look at the ongoing impact of COVID-19 even when vaccines are being rolled out. Ask anyone in Victoria.

The post Why the wheels are falling off the Carbon Revolution (ASX:CBR) share price today appeared first on The Motley Fool Australia.

Four ASX shares that are falling more than most today are listed below. Here's why they are sinking:

Bubs Australia Ltd (ASX: BUB)

The Bubs share price is down almost 2.5% to a two-year low of 43 cents. This is despite there being no news out of the infant formula company today. However, with its third quarter update due this week and analysts warning that trading conditions are very tough, investors may be jumping ship in anticipation of a very poor update.

Carbon Revolution Ltd (ASX: CBR)

The Carbon Revolution share price has crashed 22% to $1.83. Investors have been selling the carbon fibre wheels manufacturer's shares following the completion of the institutional component of its underwritten entitlement offer and placement. According to the release, the company has raised $73.5 million at a discount of $1.60 per new share. It will now seek to raise a further $21.5 million from retail investors. These funds will be used to execute its mega-line strategy.

Paradigm Biopharmaceuticals Ltd (ASX: PAR)

The Paradigm share price is down almost 7% to $2.38. The biopharmaceutical company's shares have come under pressure today after an update on its dealings with the US FDA. According to the release, on Friday Paradigm received a verbal indication from the FDA that the regulator would be putting further questions to Paradigm outside the 30-day investigational new drug (IND) application review period. This has the potential to delay proceedings and adds an element of uncertainty.

Tyro Payments Ltd (ASX: TYR)

The Tyro share price is down 3% to $3.81 following the release of a trading update. Investors have been selling the payments company's shares despite it reporting transaction value of $1.741 billion month-to-date in April. This is up 155% on the prior corresponding period. Though, it is worth noting that this time last year the pandemic was hitting the economy hard.

The post Why Bubs, Carbon Revolution, Paradigm, & Tyro shares are sinking appeared first on The Motley Fool Australia.

Why is the Carbon Revolution share price in focus?

Carbon Revolution provided an update on its pro-rata, accelerated, non-renounceable entitlement offer and institutional placement. It comes as the company has decided to commence construction of phase 1 of its first "Mega-line".

The company has secured formal agreements to initiate detailed design and engineering relating to four new OEM (original equipment manufacturer) programs. A "significant proportion" of those relate to electric vehicles, with Carbon Revolution expecting a required 75,000 wheels per annum of additional capacity to meet demand.

That's a significant increase in the company's current production. To date, Carbon Revolution has sold ~40,000 wheels with 6 awarded programs announced by OEMs and in the market.

The Carbon Revolution share price will be one to watch when it resumes trading following the significant update from the Aussie manufacturer. CEO Jake Dingle said, "The award of these new OEM formal agreements validates Carbon Revolution's strategy and our world-class products and technology".

Carbon Revolution's capital requirement to build phase 1 of the Mega-line is ~$47 million. The fully underwritten $95 million equity raise will raise ~$53.5 million, with the institutional placement to raise a further ~$41.6 million.

The equity raising, combined with additional working finance arrangements, should help Carbon Revolution to reach breakeven cash flow.

The Carbon Revolution share price could be on the move when it returns to the boards after the company's news of the raise at $1.60 per share. That represents a 31.9% discount to the last closing price of $2.35 per share on Thursday 22 April.

Carbon Revolution will issue 26.0 million new shares under the placement component. A further 59.4 million new shares will be issued under the equity raising (or 40.6% of Carbon Revolution's existing issued capital).

The post Why the Carbon Revolution (ASX:CBR) share price is frozen appeared first on The Motley Fool Australia.

Here's why these three small cap ASX shares could be ones to watch:

Carbon Revolution Ltd (ASX: CBR)

Carbon Revolution is an advanced manufacturing company. It designs, manufactures, and markets single piece carbon fibre wheels for motor vehicles. By manufacturing wheels this way, the company is able to reduce their weight materially. Management estimates that these weight savings can result in up to 40% reductions in inertia, which is a very big deal for car companies that are always looking for ways to make their vehicles more efficient. Among its customers are car giants such as Ford and Ferrari.

Damstra Holdings Ltd (ASX: DTC)

Damstra is a growing integrated workplace management solutions provider. Its cloud-based workplace management platform is used by businesses globally to track, manage, and protect their workers and assets. Damstra has been a solid performer over the last couple of years and has continued this strong form in FY 2021. During the first half of FY 2021, the company delivered a 29.6% increase in revenue to $13.3 million. Given that management estimates that its total addressable market will be worth US$20 billion by 2022, this gives it a very long runway for growth. 

Pointerra Ltd (ASX: 3DP)

A final small cap to watch is Pointerra. It is a technology company focused on the global commercialisation of its unique 3D geospatial data technology. Pointerra provides a powerful cloud based solution for managing, visualising, analysing, and sharing massive 3D point clouds and datasets. This solves entrenched problems associated with digital asset management workflows and allows very large 3D datasets to be managed and analysed without the need for expensive and time-consuming high-performance computing. Management estimates that its market opportunity is currently worth an enormous $500 billion annually.

The post 3 exciting small cap ASX shares to watch closely appeared first on The Motley Fool Australia.

Here's a wrap of how the company has been performing.

Carbon Revolution results brief

The Carbon Revolution share price is trending lower after the company reported a 14% reduction in revenue for 1H21. Revenue for the period totalled $17.2 million.

Wheel sales dropped from $18.4 million in 1H20 to $16.6 million in 1H21.

As a result of poor sales activities, Carbon Revolution incurred a net loss of $14.8 million for 1H21, which was an improvement on the $98.6 million loss posted for 1H20.

Earnings per share (EPS) were negative 10 cents for 1H21, an improvement compared to the negative $1.55 EPS of the prior corresponding half.

The company's total assets dropped from $141.7 million in 1H20 to $121.6 million in 1H21. Cash and cash equivalents took a nasty hit, falling from $33.9 million in 1H20 to $15.4 million in 1H21.

In further news driving the Carbon Revolution share price lower, the company did not declare an interim dividend.

Carbon Revolution advised that it is in the process of finalising a new $7.5 million working capital facility.

CEO comments

Carbon Revolution CEO Jake Dingle said that, despite enduring the impacts of coronavirus during the period, he believes the business still reached significant milestones.

Talking about current projects underway, Dingle commented:

The newly developed fascia technology has been commercialised which has dramatically simplified wheel production, driving a reduction in labour cost per wheel and increasing product quality.

The industrialisation program has seen the addition of high-pressure moulding capacity, automated face lay-up conveyor line, multi head fibre placement machine and a second thermal barrier coating cell. These automated manufacturing processes combine advanced physical and digital technologies and are the key building blocks of the Mega-line program.

In conclusion, the business stated that although there are still uncertainties stemming from COVID-19, it expects strong sales growth during the remainder of FY21.

Carbon Revolution share price snapshot

Carbon Revolution designs, manufactures and markets single-piece carbon fibre wheels.

Over the past year, the Carbon Revolution share price has fallen by more than 40%.

Based on the current share price, the company has a market capitalisation of around $339 million with 136 million shares outstanding.

The post Why the Carbon Revolution (ASX:CBR) share price is sliding appeared first on The Motley Fool Australia.

In afternoon trade the carbon fibre wheels-focused advanced manufacturing company's shares are up 8% to $2.96.

Why is the Carbon Revolution share price storming higher?

The catalyst for the strong gain by the Carbon Revolution share price on Friday was the release of its second quarter update this morning.

According to the release, as expected by management, Carbon Revolution's sales continued to be impacted by COVID-19 headwinds during the second quarter. The quarter was also subject to manufacturing seasonality on another key customer program.

This led to the company reporting quarterly revenue of $5.6 million. This was down 52.8% on its first quarter revenue and 48.1% on the prior corresponding period.

Quarterly wheels sold were 1,972 for the three months, a decrease of 55.4% from the first quarter and 43.1% from the same period last year.

However, management's commentary in relation to the second half appears to be the reason the Carbon Revolution share price is heading higher today. It advised that it expects wheel sales growth to return in the second half of FY 2021.

Outlook

Management is positive on the second half. It explained: "The business continues to monitor the local and global impacts and risks related to COVID-19. There remain uncertainties arising from the ongoing impacts of COVID-19 and the automotive industry's response in the near-term. On the basis of all currently available information, the Company expects to deliver strong sales growth in FY21."

Supporting its growth will be the company's investment in its Mega-line manufacturing process. This process is expected to lower costs, increase capacity, and help the company secure larger programs.

Management commented: "The design of the Mega-line manufacturing process has progressed significantly and is now ready to proceed once new programs are awarded. The Company expects that significant new programs will be secured in the next 6 months and these new programs will underpin the decision to invest in the first mega line. This demand for Megaline capacity is anticipated to come from both existing and new customers."

The post Why the Carbon Revolution (ASX:CBR) share price zoomed 8% higher appeared first on The Motley Fool Australia.

On this occasion, I'm going to look at the industrials sector. Here are a couple of shares they rate highly:

Carbon Revolution Ltd (ASX: CBR)

One share in the industrials sector that Bell Potter is positive on is Carbon Revolution. It is an advanced manufacturer that has developed single piece carbon fibre automotive wheels to an original equipment manufacturer (OEM) quality standard. Bell Potter has a speculative buy rating and $3.72 price target on its shares.

It notes that the company has achieved commercial adoption across several major models. This includes with car giants Ferrari and Ford.

The broker commented: "CBR is expecting to return to strong sales growth in 2H21e, after CY20 was characterised by COVID-related disruptions to key customers Ferrari and Ford, which are expected to continue to impact 2Q21e volumes."

"We see a range of other positive catalysts in 2H21e that should support capital growth, including: (1) 2-4 official vehicle launches, two of which are expected to enter production; (2) positive gross profit before the end of CY21e; and, (3) the potential to win new vehicle programs, such as the Asian based OEM that is currently in engineering validation stage," it added.

Flight Centre Travel Group Ltd (ASX: FLT)

Another industrial share that Bell Potter rates highly is this travel agent giant. The broker currently has a buy rating and $19.00 price target on Flight Centre's shares.

It is a fan of the company largely due to its increasingly important corporate business, which it notes is now attributable to two-thirds of its earnings.

Its analysts commented: "We are most attracted to FLT's Corporate business which generated 67% of FLT's profit despite making up only 43% of the Company's TTV."

"The company also has a significant presence in the leisure travel market, particularly in Australia. This business – which naturally carries a high fixed cost-base due to its extensive in-store network has undergone a significant restructure since Covid-19 strangled the demand for travel – also provides a value driver which is leveraged to a rebound in international travel," it added.

And while it recognises that the pandemic is not over and the short term carries risks, once the crisis passes it is expecting Flight Centre to "restore earnings at higher margins with the removal of structural costs and market leadership from FLT's corporate business to be the key drivers of value over the long-term."

The post Bell Potter names the ASX industrials shares to buy in 2021 appeared first on The Motley Fool Australia.

Three ASX shares that are at the start of their journeys are listed below. Here's what has investors watching them closely:

Carbon Revolution Ltd (ASX: CBR)

Carbon Revolution is a $350 million advanced manufacturing company that designs, manufactures, and markets single piece carbon fibre wheels for motor vehicles. This style of manufacturing wheels means the company is able to reduce the weight of them materially. Management estimates that these weight savings can result in up to 40% reductions in inertia. This is a big deal for car companies, which are always looking for ways to make their vehicles more efficient. Carbon Revolution counts the likes of Ford and Ferrari as customers. Last month Carbon Revolution reported quarterly revenue of $11.8 million, up 45.9% on the previous quarter and 26.3% on the previous corresponding period.

Mach7 Technologies Ltd (ASX: M7T)

Mach7 is a $223 million developer of enterprise imaging and informatics solutions for image viewing, storage, and workflow management. These solutions are able to be implemented individually, or as a comprehensive end-to-end image management and diagnostic viewing platform. The company has designed them to assist healthcare organisations with removing technology limitations to ensure patient information flows easily and can be accessed instantly. This helps to inform diagnosis, reduce care delivery delays and costs, and improve patient outcomes. In FY 2020 Mach7 reported a 102% increase in revenue to $18.9 million. This is still only scratching at the surface of its market opportunity. At the last count, management was estimating that the company's total addressable market is worth US$2.75 billion per year.

Whispir (ASX: WSP)

Whispir is a $367 million software-as-a-service communications workflow platform provider. Its popular platform automates communications between organisations and people. This enables users to improve their communications through automated workflows to ensure stakeholders receive accurate, timely, useful, and actionable insights. Whispir was a very strong performer in FY 2020. For the 12 months ended 30 June 2020, it posted a 25.5% increase in revenue to $39.1 million and ARR growth of 34% to $42.2 million. Management estimates that the Workflow Communications platform as a Service market could reach US$8 billion per year by 2024.

The post 3 growing small cap ASX shares appeared first on The Motley Fool Australia.

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.

The post Why the Carbon Revolution (ASX:CBR) share price soared 14% higher today appeared first on The Motley Fool Australia.

Right now, there are a number of companies at the small side of the market which I believe have a lot of potential.

Here's why I think they should be on your watchlist:

Carbon Revolution Ltd (ASX: CBR)

Carbon Revolution is a $370 million advanced manufacturing company that designs, manufactures, and markets single piece carbon fibre wheels for motor vehicles. By being able to manufacture wheels in this way, the company is able to reduce the weight of them significantly. This is a big positive as management estimates that these weight savings can result in up to 40% reductions in inertia. This is really significant for car companies, which are always looking to make their vehicles more efficient. Carbon Revolution counts the likes of Ford and Ferrari as customers. I believe this is a testament to the quality of its products.

Mach7 Technologies Ltd (ASX: M7T)

Another small cap ASX share to watch closely is Mach7. It is a $247 million developer of innovative enterprise imaging and informatics solutions for image viewing, storage, and workflow management. These solutions are able to be implemented individually, or as a comprehensive end-to-end image management and diagnostic viewing platform. The company has designed them to assist healthcare organisations with removing technology limitations to ensure patient information flows easily and can be accessed instantly. This helps to inform diagnosis, reduce care delivery delays and costs, and improve patient outcomes. Management estimates that Mach7's total addressable market is worth US$2.75 billion per year.

Whispir (ASX: WSP)

A final small cap ASX share I would recommend you put on your watchlist is Whispir. It is a $379 million software-as-a-service communications workflow platform provider. This increasingly popular platform automates communications between organisations and people. This enables organisations to improve their communications through automated workflows to ensure stakeholders receive accurate, timely, useful, and actionable insights. Management estimates that the Workflow Communications platform as a Service market could reach US$8 billion per year by 2024.

The post 3 small cap ASX shares to put on your watchlist right now appeared first on The Motley Fool Australia.

COVID-19 impacting demand

Earlier today, Carbon Revolution released a market update that highlighted the impact of COVID-19 on its global automotive supply chains. Given the evolving nature of the COVID-19 pandemic, Carbon Revolution informed the market that sales growth and demand for its wheels in the first quarter of FY21 will be affected.

As a result, the company also withdrew is guidance for FY20 and has implemented a series of operational changes. These changes include a reduction in its production workforce and the restructuring of working shifts. The company's management believe that the changes will have no effect on the medium to long-term demand for its wheels or growth prospects.

How has Carbon Revolution performed?

Carbon Revolution is an Australian-based company that manufactures lightweight, carbon fibre wheels for the global automotive industry. The company produces wheels which are about 40% lighter than conventional wheels to car makers including Ferrari, Ford and Renault.

In late April, the company released a business update that highlighted the impact of CVOID-19 on its sales. Carbon Revolution noted that the business had been impacted by disruption of global supply chains, which has affected freight availability, costs and also resulted in supply issues for raw materials. Despite the setbacks, Carbon Revolution reported that wheel sales grew 184% for the third quarter ending 31 March 2020, in comparison to the third quarter of 2019.  

Carbon Revolution began trading on the ASX in late November after a public float with an issue price of $2.60. Market volatility during the COVID-19 pandemic saw the company's share price sink to an all-time low of 80 cents in late March. Despite the share price volatility, Carbon Revolution was added to the All Ordinaries Index during the June rebalance.

It is also important to note that Carbon Revolutions operations are based in Geelong and could be further impacted given the new restrictions imposed in Victoria.

Foolish takeaway

At the time of writing the Carbon Revolution share price is trading more than 29% lower for the day at $1.40 per share, having hit an intra-day low of $1.36.

The post Carbon Revolution share price tanks 30% on trading update appeared first on The Motley Fool Australia.

So, rather than focusing on traditional automotive players, could these 2 automotive tech plays generate market-leading returns in 2020? 

1. PWR Holdings Ltd (ASX: PWH) 

PWR provides world class cooling solutions by manufacturing high performance aluminium radiators, intercoolers and oil coolers to leading race categories and teams such as F1, NASCAR, V8 Supercars and World Rally Championship.

In the company's FY19 report it cited that its primary market is niche and high end, which are less price or demand sensitive to general economic conditions. Its primary market categories are expected to continue growing with a focus on diversifying sales on verticals such as aerospace, military and electronic cooling. The report delivered strong growth across all financial metrics with revenue increasing 26%, earnings before interest, tax, depreciation and amortisation (EBITDA) increasing 34% and net profit after tax (NPAT) increasing 29%. It trades at a moderate price-to-earnings (P/E) ratio of approximately 34 and has a market capitalisation of just under $500 million.

I believe the company has a strong proven track record to continue to leverage its niche position as a world leader in high performance cooling. 

2. Carbon Revolution Ltd (ASX: CBR) 

Carbon Revolution is a recent IPO, with an offer price of $2.60 per share back in November 2019. The company is an advanced manufacturing company that designs, manufacturers and markets single piece carbon fibre wheels. It has a number of significant existing supply programmes in production with Ferrari, Ford, Renault and other global original equipment manufacturers (OEM). The company's IPO also attracted some high profile shareholders including Swiss wheel manufacturer Ronal, which holds 11.2%, the State of Victoria, which holds 4.3%, and Deakin University, which holds 6.6%.

There is a strong business case for Carbon Revolution's technologies as automotive players are focused on adopting new weight reducing technologies to improve efficiency, reduce emissions, enhance performance and increase the potential to carry a larger payload. It has attracted a Federal Government grant to adapt its innovative technology to the aerospace sector, which could attract further products, intellectual property and revenue in the medium- to long-term. 

Carbon Revolution has forecast that its FY20 revenue is expected to almost quadruple from $15.1 million to $62.2 million. In a December business update, the company confirmed that it continues to break monthly production records as it targets an increase of its annualised production capacity from 12,000 wheels per annum in August 2019 to almost 32,000 wheels per annum by June 2020. 

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Carbon Revolution's IPO

Carbon Revolution had an IPO price of $2.60 per share back in November 2019 and a $330 million market capitalisation at the offer price. Its share price is currently at $4.00, or a 50% return for those that managed to get in on the IPO. While the share price has soared in such a short period of time, I believe there could be a lot more steam in the engine.

In the company's prospectus it cited that weight reduction is a key trend in global transportation. Vehicle manufacturers are focused on adopting new weight reducing technologies to improve vehicle efficiency and performance. This can allow a vehicle to have improved fuel efficiency, reduced emissions, enhanced performance and the potential to carry a larger payload. More specifically, OEMs are actively seeking technologies that can contribute to such benefits to reduce fleet emissions to meet regulatory requirements in markets around the world. Carbon Revolution's modelling suggests that the weight reductions achieved by its carbon fibre wheels can materially improve vehicle efficiency and therefore reduce fuel consumption by 2–6% (compared to cast aluminium wheels). 

In FY19, the company reported a statutory $15.1 million revenue and statutory net loss of $27.2 million. While investors might be alarmed about the company's significant loss, the short- to medium-term focus is not the company's profitability, but its ability to grow revenues and establish meaningful partnerships/clients. 

High hopes for 2020

Carbon Revolution has forecasted that its FY20 revenue is expected to soar to $62.2 million. This is primarily driven by an increase in production capabilities from an approximate annual run rate of 12,000 in August 2019, to almost 32,000 by June 2020. 

The company currently has a market capitalisation of approximately $500 million. If Carbon Revolution can achieve its FY20 guidance of $62.2 million in revenue, it would value the company at 8x revenue at today's prices. 

Foolish takeaway 

Investors can either view its potential valuation as a glass half full or empty – that a 8x revenue multiple is relatively cheap compared to other growth and tech valuations, or that the company is still loss making and a very risky investment. Either way, I would have Carbon Revolution on my growth watchlist to see how it plays out. 

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