Aehr Test Systems (AEHR) AI Stock Analysis

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Aehr Test Systems

(NASDAQ:AEHR)

69Neutral

Aehr Test Systems shows strong historical financial performance and growth potential, particularly in the AI and semiconductor markets. However, recent financial challenges, potential tariff impacts, and technical analysis indicate significant risks. The company's valuation suggests fair pricing, but the lack of a dividend and current stock price trends call for caution. Overall, the stock warrants a moderate score due to its growth prospects tempered by current financial and market challenges.

Aehr Test Systems (AEHR) vs. S&P 500 (SPY)

Market Cap

$260.28M

Dividend YieldN/A

Average Volume (3M)909.16K

Price to Earnings (P/E)11.3

Beta (1Y)1.28

Revenue Growth-14.48%

EPS Growth46.79%

CountryUS

Employees115

SectorTechnology

Sector Strength40

IndustrySemiconductors

Share Statistics

EPS (TTM)0.78

Shares Outstanding29,711,803

10 Day Avg. Volume985,566

30 Day Avg. Volume909,158

Financial Highlights & Ratios

PEG Ratio0.24

Price to Book (P/B)N/A

Price to Sales (P/S)5.21

Price to Cash Flow (P/CF)-11.30

P/FCF Ratio0.00

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$11.50

Price Target Upside41.45% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering2

Aehr Test Systems Business Overview & Revenue Model

Company DescriptionAehr Test Systems (AEHR) is a leading provider of semiconductor test and reliability qualification equipment. The company operates within the technology and manufacturing sectors, focusing primarily on the development, production, and sale of systems designed to reduce the cost of testing and burn-in for semiconductor devices. Aehr Test Systems offers a range of products such as wafer-level test and burn-in systems, known for their efficiency and high throughput capabilities, which are essential for ensuring the reliability and performance of semiconductors used in various electronic applications.

How the Company Makes MoneyAehr Test Systems generates revenue through the sale of its semiconductor test and burn-in equipment to a broad range of customers, including semiconductor manufacturers and other electronics companies. The company's key revenue streams include the direct sale of its proprietary test systems, as well as associated accessories and spare parts. Additionally, Aehr Test Systems may earn income from service and maintenance contracts related to its equipment. Significant partnerships with major semiconductor companies and continuous innovation in test technologies also contribute to its earnings by enhancing product offerings and expanding market reach.

Aehr Test Systems Financial Statement Overview

Summary

Aehr Test Systems has demonstrated strong revenue growth and improved profitability over recent years. However, the TTM results indicate potential challenges with a decline in revenue, profitability, and cash flow. The company's low leverage is a positive factor, but maintaining cash flow and reversing recent negative trends will be crucial for sustaining growth.

Income Statement

Very Positive

Aehr Test Systems has shown a strong recovery with consistent revenue growth from 2020 to 2024. The company reported a significant improvement in net income, turning negative net income in 2020 into a substantial profit in 2024. However, the TTM data indicates a decline in revenue and a negative EBIT, which could be concerning if the trend continues.

Balance Sheet

Positive

The balance sheet shows a healthy equity position with a growing stockholders' equity from 2020 to 2024. The debt-to-equity ratio is low, indicating low financial leverage. However, the increase in total liabilities and a decline in cash reserves in the TTM period are areas to watch.

Cash Flow

Positive

Cash flow from operations has fluctuated significantly, with negative cash flow in the TTM period. Free cash flow has been inconsistent, which may affect the company's ability to finance new projects without external funding. The company's ability to convert net income into cash is a concern given the negative operating cash flow in the latest period.

TTM	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Breakdown
Income Statement		Total Revenue
50.73M	66.22M	64.96M	50.83M	16.60M	22.29M
	Gross Profit
24.08M	32.54M	32.75M	23.66M	6.03M	8.37M
	EBIT
-859.00K	10.08M	13.38M	5.79M	-4.18M	-2.54M
	EBITDA
450.00K	11.44M	13.82M	7.80M	-3.85M	-2.16M
	Net Income Common Stockholders
22.02M	33.16M	14.56M	9.45M	-2.03M	-2.80M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
8.67M	49.16M	47.91M	31.48M	4.58M	5.43M
	Total Assets
16.97M	127.91M	98.14M	62.33M	21.66M	20.57M
	Total Debt
302.00K	6.20M	6.30M	1.01M	4.82M	3.94M
	Net Debt
-8.37M	-42.96M	-23.75M	-30.48M	241.00K	-1.49M
	Total Liabilities
5.18M	16.32M	22.54M	11.34M	10.22M	6.52M
	Stockholders Equity
11.79M	111.59M	75.60M	50.99M	11.45M	14.08M
Cash Flow		Free Cash Flow
-5.92M	1.01M	8.65M	1.09M	-2.93M	-2.19M
	Operating Cash Flow
-5.09M	1.76M	10.01M	1.51M	-2.70M	-2.02M
	Investing Cash Flow
-11.44M	17.25M	-18.66M	-416.00K	-227.00K	-163.00K
	Financing Cash Flow
1.07M	139.00K	7.32M	25.76M	1.96M	2.17M

Aehr Test Systems Technical Analysis

Technical Analysis Sentiment

Negative

Last Price8.13

Price Trends

50DMA

9.46

Negative

100DMA

11.37

Negative

200DMA

12.73

Negative

Market Momentum

MACD

-0.62

Positive

RSI

36.69

Neutral

STOCH

15.30

Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AEHR, the sentiment is Negative. The current price of 8.13 is below the 20-day moving average (MA) of 8.34, below the 50-day MA of 9.46, and below the 200-day MA of 12.73, indicating a bearish trend. The MACD of -0.62 indicates Positive momentum. The RSI at 36.69 is Neutral, neither overbought nor oversold. The STOCH value of 15.30 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AEHR.

Aehr Test Systems Risk Analysis

Aehr Test Systems disclosed 21 risk factors in its most recent earnings report. Aehr Test Systems reported the most risks in the “Tech & Innovation” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Aehr Test Systems Peers Comparison

Overall Rating

UnderperformOutperform

Sector (57)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TER	75 Outperform	$12.78B	23.92	20.29%	0.60%	5.52%	16.59%
AEHR	69 Neutral	$260.28M	11.29	21.69%	―	-14.48%	46.79%
FORM	60 Neutral	$2.29B	33.54	7.50%	―	15.16%	-15.16%
Sector *	57 Neutral	$20.24B	9.51	-13.28%	2.72%	5.43%	-24.54%
UCTT	55 Neutral	$984.79M	42.13	2.77%	―	20.92%	―
KLIC	50 Neutral	$1.71B	271.28	0.31%	2.52%	-4.92%	-85.39%
COHU	48 Neutral	$707.87M	―	-7.73%	―	-36.86%	-351.11%

* Technology Sector Average

Performance Comparison

AEHR

Aehr Test Systems

8.13

-3.70

-31.28%

COHU

Cohu

14.30

-17.71

-55.33%

FORM

Formfactor

26.23

-19.64

-42.82%

KLIC

Kulicke & Soffa

29.40

-18.40

-38.49%

TER

Teradyne

72.29

-36.73

-33.69%

UCTT

Ultra Clean Holdings

19.69

-25.76

-56.68%

Aehr Test Systems Earnings Call Summary

Earnings Call Date: Apr 8, 2025 | % Change Since: 19.91% | Next Earnings Date: Jul 17, 2025

Earnings Call Sentiment Neutral

The earnings call highlighted strong revenue growth and successful market diversification into AI and other segments, but was overshadowed by uncertainty from recent tariff announcements and challenges in maintaining margins. Despite these challenges, the company remains optimistic about long-term growth opportunities.

Highlights

Record Revenue Growth

Third quarter revenue reached $18.3 million, a 142% increase compared to $7.6 million in Q3 last year, driven by high-power FOX-XP system shipments for AI processors.

Diversification Success

AI processors now represent over 35% of Aehr's business this year, a significant diversification from the previous reliance on silicon carbide.

Strategic Market Expansions

Aehr entered several new markets including GaN power semiconductors, AI processors, silicon photonics, and hard disk drives.

Successful Product Integration

The integration of InCal Technology's products boosted Aehr's manufacturing capabilities and expanded offerings in AI markets.

Lowlights

Tariff-Related Uncertainty

The recent U.S. tariff announcements have created uncertainty regarding potential delays or pauses in customer orders and deliveries.

Temporary Guidance Withdrawal

Due to tariff impacts and potential customer order delays, Aehr has temporarily withdrawn its fiscal 2025 guidance.

Gross Margin Challenges

Non-GAAP gross margin for Q3 was flat at 42.7% due to one-time charges and high manufacturing overhead.

Increased Operating Expenses

Non-GAAP operating expenses rose by 34% year-over-year, driven by InCal integration costs and increased legal fees.

Company Guidance

During the Aehr Test Systems Fiscal 2025 Third Quarter Financial Results Call, the company reported a third-quarter revenue of $18.3 million, marking a significant 142% increase compared to the same period last year. This growth was primarily driven by shipments of the new high-power FOX-XP solution for AI processors. The company also noted a backlog of $22 million and highlighted its strategic expansion into AI processors, gallium nitride, and flash memory markets. Despite withdrawing guidance for fiscal 2025 due to uncertainties related to recent tariff announcements, Aehr Test Systems emphasized its robust supply chain and diversified market opportunities, projecting a total addressable market of $1 billion by 2027, with wafer and package part burn-in systems accounting for $500 million each.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.