Aehr Test Systems (AEHR) AI Stock Analysis

• Market Cap: $622.52M
• Dividend Yield: N/A
• Average Volume (3M): 1.83M
• Price to Earnings (P/E): 19.5
• Beta (1Y): 1.61
• Revenue Growth: -10.95%
• EPS Growth: -111.40%
• Country: US
• Employees: 115
• Sector: Technology
• Sector Strength: 92
• Industry: Semiconductors
• EPS (TTM): -0.01
• Shares Outstanding: 29,771,410
• 10 Day Avg. Volume: 1,942,618
• 30 Day Avg. Volume: 1,833,646
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $16.00
• Price Target Upside: -23.48% Downside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

• Rating: 63 Neutral
• Price Target: $23.50 ▲(12.39%Upside)

The overall stock score reflects a balance between the company's strong technical momentum and strategic shifts highlighted in the earnings call, versus the significant financial challenges indicated in the financial statements. While the technical indicators are strong, profitability and cash flow issues pose a risk, balanced slightly by strategic advancements in AI.

Positive Factors

Acquisitions

The acquisition of Incal Technology will expand Aehr’s product portfolio, representing a growth opportunity in AI accelerators, GPUs, and high-performance computing processors.

Business Diversification

Aehr is transitioning away from a SiC-centric company and gaining traction in applying its WBLI technology in other applications, namely AI processors.

Product Adoption

The company announced the first adoption of its wafer level burn-in (WLBI) for an AI processor, offering a significant value proposition for AI processor manufacturers.

Negative Factors

Earnings Expectations

Aehr missed fourth-quarter expectations considerably and held back on providing guidance for fiscal 2026.

Geopolitical Risks

There is uncertainty related to the U.S. tariff policy, which could have near-term effects on customer orders and supply chain deliveries.

Market Visibility

Bookings in the quarter were $11.1 million, representing a book-to-bill ratio of 0.79, highlighting the lack of visibility in the business as new markets are still being evaluated.

Aehr Test Systems Business Overview & Revenue Model

Company Description

Aehr Test Systems provides test systems for burning-in and testing logic, optical, and memory integrated circuits worldwide. It offers products, such as the ABTS and FOX-P families of test and burn-in systems and FOX WaferPak Aligner, FOX-XP WaferPak Contactor, FOX DiePak Carrier, and FOX DiePak Loader. The ABTS system is used in production and qualification testing of packaged parts for lower power and higher power logic devices, as well as various common types of memory devices. The FOX-XP and FOX-NP systems are wafer contact and singulated die/module test and burn-in systems used for burn-in and functional test of complex devices, such as memories, digital signal processors, microprocessors, microcontrollers, systems-on-a-chip, and integrated optical devices. The FOX-CP system is a single-wafer compact test and reliability verification solution for logic, memory, and photonic devices. The WaferPak Contactor contains a unique full wafer probe card capable of testing wafers up to 300mm that enables IC manufacturers to perform test and burn-in of full wafers on Aehr Test FOX systems. The DiePak Carrier is a reusable, temporary package that enables IC manufacturers to perform final test and burn-in of bare die and modules. Aehr Test Systems was incorporated in 1977 and is headquartered in Fremont, California.

How the Company Makes Money

Aehr Test Systems generates revenue primarily through the sale of its test and burn-in equipment to semiconductor manufacturers and other companies involved in the electronics supply chain. The company's key revenue streams include the sale of its proprietary testing systems, such as the FOX-XP and FOX-NP platforms, which are designed for high-volume production and reliability testing. Additionally, Aehr Test Systems offers service and support contracts, as well as consumables and upgrade kits for its equipment, contributing to recurring revenue. Significant partnerships with leading semiconductor companies enhance its market presence and contribute to its earnings, while ongoing product innovation helps maintain its competitive edge.

Aehr Test Systems Financial Statement Overview

Summary

Aehr Test Systems is facing financial challenges with declining revenue and profitability, coupled with negative cash flows. Despite a strong equity base, operational inefficiencies and cash flow issues are significant concerns.

Income Statement

The company's revenue has shown inconsistent growth with a recent decline in total revenue from $66.2M to $58.97M. The gross profit margin decreased from 49.1% to 40.6%, indicating reduced efficiency in production. The net profit margin turned negative at -6.6%, compared to the previous year's 50%, reflecting significant profitability challenges. The EBIT and EBITDA margins also turned negative, highlighting operational inefficiencies.

Balance Sheet

Aehr Test Systems maintains a solid equity base with an equity ratio of 82.7%. However, the debt-to-equity ratio increased slightly due to rising debt levels, though it remains manageable. The return on equity turned negative, indicating recent profitability issues. The company has a strong cash position, supporting financial stability despite recent losses.

Cash Flow

The cash flow situation is concerning, with both operating and free cash flows turning negative. This indicates challenges in generating cash from operations, reflected in a negative free cash flow growth rate of -1,336%. The operating cash flow to net income ratio is negative, further underscoring cash generation issues.

Breakdown
Income Statement
Total Revenue
Gross Profit
EBITDA
Net Income
Balance Sheet
Total Assets
Cash, Cash Equivalents and Short-Term Investments
Total Debt
Total Liabilities
Stockholders Equity
Cash Flow
Free Cash Flow
Operating Cash Flow
Investing Cash Flow
Financing Cash Flow

Aehr Test Systems Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 20.91
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AEHR, the sentiment is Positive. The current price of 20.91 is above the 20-day moving average (MA) of 16.28, above the 50-day MA of 12.93, and above the 200-day MA of 11.79, indicating a bullish trend. The MACD of 2.37 indicates Negative momentum. The RSI at 71.25 is Negative, neither overbought nor oversold. The STOCH value of 82.02 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AEHR.

Aehr Test Systems Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NVEC	67 Neutral	$305.56M	21.02	23.09%	6.33%	-9.22%	-13.57%
AEHR	63 Neutral	$622.52M	19.55	-3.34%	―	-10.95%	-111.40%
Sector *	63 Neutral	$34.94B	5.14	-11.21%	1.86%	5.61%	-19.33%
NVTS	61 Neutral	$1.64B	―	-26.43%	―	-16.95%	-2.47%
AIP	60 Neutral	$371.92M	―	-1369.57%	―	14.68%	20.20%
XPER	59 Neutral	$344.48M	―	-4.71%	―	-4.77%	84.82%
VLN	54 Neutral	$287.55M	―	-24.31%	―	-12.13%	-39.21%