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Aehr Test Systems (AEHR)
NASDAQ:AEHR
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Aehr Test Systems
(NASDAQ:AEHR)
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Rating:55Neutral
Price Target:
$30.00
▲(15.74% Upside)
Aehr Test Systems' overall stock score is primarily influenced by its financial performance challenges, including declining revenue and profitability. The earnings call provided some optimism with strong sales momentum and strategic focus on AI processors, but valuation concerns and technical indicators suggest caution. The company's ability to navigate tariff-related uncertainties and improve operational efficiency will be crucial for future performance.
Positive Factors
Market Position
Aehr's leadership in semiconductor testing solutions positions it well to capitalize on industry growth, particularly in automotive and AI sectors.
Product Innovation
Innovative enhancements to the Sonoma system strengthen Aehr's competitive edge, catering to the evolving needs of AI processor testing.
Industry Trends
Macro trends in AI and electrification are boosting semiconductor demand, which benefits Aehr's core testing solutions.
Negative Factors
Revenue Decline
Declining revenue indicates potential challenges in market demand or competitive pressures, impacting long-term growth.
Profitability Issues
Negative profitability margins highlight operational inefficiencies and could strain financial resources if not addressed.
Cash Flow Challenges
Negative cash flows indicate difficulties in generating cash from operations, potentially limiting investment and growth opportunities.
Aehr Test Systems (AEHR) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$777.77M
Dividend YieldN/A
Average Volume (3M)1.96M
Price to Earnings (P/E)―
Beta (1Y)1.70
Revenue Growth-3.23%
EPS Growth-122.16%
CountryUS
Employees115
SectorTechnology
Sector Strength88
IndustrySemiconductors
Share Statistics
EPS (TTM)0.01
Shares Outstanding30,006,590
10 Day Avg. Volume2,553,275
30 Day Avg. Volume1,960,337
Financial Highlights & Ratios
PEG Ratio0.65
Price to Book (P/B)2.30
Price to Sales (P/S)4.79
P/FCF Ratio-22.77
Enterprise Value/Market Cap0.94
Enterprise Value/Revenue17.15
Enterprise Value/Gross Profit44.95
Enterprise Value/Ebitda-328.43
Forecast
1Y Price Target
$27.00Price Target Upside4.17% Upside
Rating ConsensusHold
Number of Analyst Covering3
Aehr Test Systems Business Overview & Revenue Model
Company DescriptionAehr Test Systems (AEHR) is a leading provider of test and burn-in solutions for the semiconductor industry, specializing in advanced test equipment for silicon wafers and packaged integrated circuits. The company focuses on sectors such as automotive, consumer electronics, and data centers, offering core products that include automated test equipment, burn-in and reliability testing systems, and software solutions that enhance the testing process for semiconductor devices.
How the Company Makes MoneyAehr Test Systems generates revenue primarily through the sale of its test and burn-in equipment, which includes both hardware and software components. The company also earns money from ongoing service contracts, maintenance, and support for its installed systems. Key revenue streams include direct sales to semiconductor manufacturers and fabless companies, as well as partnerships with original equipment manufacturers (OEMs) that integrate AEHR's technology into their products. Additionally, AEHR benefits from increasing demand for its solutions due to the growing complexity of semiconductor devices and the need for rigorous testing to ensure reliability, especially in automotive and high-performance computing applications.
Aehr Test Systems Key Performance Indicators (KPIs)
Any
Bookings
Reflects the total value of orders received that are yet to be fulfilled, indicating demand for Aehr Test Systems' products and potential future revenue.
Reflects the total value of orders received that are yet to be fulfilled, indicating demand for Aehr Test Systems' products and potential future revenue.
Data provided by:
Main Street Data
Main Street DataAehr Test Systems Earnings Call Summary
Earnings Call Date:Oct 06, 2025
(Q1-2026)
| % Change Since: |
Next Earnings Date:Jan 01, 2026
Earnings Call Sentiment Neutral
The earnings call reflected a mix of positive and negative developments. While the company exceeded analyst expectations for revenue and profit, expanded its wafer level burn-in systems, and increased manufacturing capacity, it also faced challenges such as lower gross margins, tariff-related uncertainty, and delays in flash memory burn-in benchmarks.Q1-2026 Updates
Positive Updates
Revenue and Profit Exceed Analyst Expectations
First quarter revenue was $11 million, surpassing analyst expectations. Demand for FOX CP and XP products primarily drove revenue.
Significant Customer Engagement in AI Processors
A leading hyperscaler placed multiple follow-on volume production orders for Sonoma Systems, requesting shorter lead times to support higher than expected volumes.
Expansion in Wafer Level Burn-In Systems
The world's first production wafer level burn-in systems for AI processors were installed at a large OSAT, showcasing Aehr Test Systems' capabilities.
Facility Renovation Increases Manufacturing Capacity
The completion of facility renovations increased manufacturing capacity by at least five times, enabling more high power system production.
Negative Updates
Lower Gross Margin
Non-GAAP gross margin for the first quarter was 37.5%, down from 54.7% year over year, due to lower sales volume and less favorable product mix.
Ongoing Tariff-Related Uncertainty
Due to tariff-related uncertainty, the company withheld formal guidance for the fiscal year.
Challenges in Flash Memory Burn-In
The flash memory level burn-in benchmark faced slower than expected progress with challenges in test system bring-up.
Company Guidance
During the call, Aehr Test Systems reported strong momentum in sales and customer engagement across various market segments, surpassing analyst consensus on both revenue and profit for the first quarter of fiscal 2026. The company recorded a revenue of $11 million, primarily driven by demand for their FOX CP and XP products, despite a decline from the previous year's $13.1 million. Gross margin fell to 37.5% from 54.7% year-over-year due to lower sales volume and less favorable product mix. Operating expenses increased by 8% to $5.9 million, attributed to higher R&D expenses. The backlog at the end of the quarter was $15.5 million, with additional bookings totaling $2 million in the first five weeks of fiscal 2026. The company also highlighted the strategic importance of its enhancements to the Sonoma system, which includes increasing power per device to 2,000 watts and adding full automation, as well as the promising opportunities in the AI processor market and other segments like silicon photonics and gallium nitride. Despite ongoing tariff-related uncertainties, Aehr Test Systems remains optimistic about broad-based growth opportunities across its markets.Aehr Test Systems Financial Statement Overview
Summary
Aehr Test Systems faces challenges with declining revenue and profitability, as reflected in negative margins and revenue growth. The balance sheet remains strong with low leverage, but recent losses impact return on equity. Cash flow issues are evident, although there is some improvement in free cash flow.Income Statement
Aehr Test Systems has experienced declining revenue and profitability in the TTM period. The gross profit margin remains stable, but the net profit margin is negative, indicating losses. The EBIT and EBITDA margins have also turned negative, reflecting operational challenges. Revenue growth has been negative, showing a contraction in sales.45
Neutral
Balance Sheet
The company's balance sheet shows a low debt-to-equity ratio, indicating conservative leverage. However, the return on equity is negative in the TTM period, reflecting recent losses. The equity ratio is strong, suggesting a solid capital structure, but the recent performance raises concerns about profitability.60
Neutral
Cash Flow
Cash flow analysis reveals negative operating and free cash flows in the TTM period, although there is a positive free cash flow growth rate. The operating cash flow to net income ratio is negative, indicating cash flow issues. The free cash flow to net income ratio is positive, suggesting some efficiency in cash management despite losses.50
Neutral
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 42.73M | 58.97M | 66.22M | 64.96M | 50.83M | 16.60M |
| Gross Profit | 16.30M | 23.93M | 32.54M | 32.75M | 23.66M | 6.03M |
| EBITDA | -2.23M | -903.00K | 13.82M | 15.07M | 9.85M | -1.85M |
| Net Income | -3.75M | -3.91M | 33.16M | 14.56M | 9.45M | -2.03M |
Balance Sheet | ||||||
| Total Assets | 144.09M | 148.51M | 127.91M | 98.14M | 62.33M | 21.66M |
| Cash, Cash Equivalents and Short-Term Investments | 22.71M | 25.23M | 49.16M | 47.91M | 31.48M | 4.58M |
| Total Debt | 10.62M | 10.83M | 6.20M | 6.30M | 1.01M | 4.82M |
| Total Liabilities | 21.70M | 25.64M | 16.32M | 22.54M | 11.34M | 10.22M |
| Stockholders Equity | 122.39M | 122.87M | 111.59M | 75.60M | 50.99M | 11.45M |
Cash Flow | ||||||
| Free Cash Flow | -10.91M | -12.39M | 1.01M | 8.65M | 1.09M | -2.93M |
| Operating Cash Flow | -7.54M | -7.40M | 1.76M | 10.01M | 1.51M | -2.70M |
| Investing Cash Flow | -3.83M | -16.07M | 17.25M | -18.66M | -416.00K | -227.00K |
| Financing Cash Flow | 322.00K | 625.00K | 139.00K | 7.32M | 25.76M | 1.96M |
Aehr Test Systems Technical Analysis
Negative
25.92
Price Trends
26.28
Negative
20.58
Positive
15.23
Positive
Market Momentum
-0.47
Positive
42.86
Neutral
46.70
Neutral
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 25.92 is below the 20-day moving average (MA) of 28.12, below the 50-day MA of 26.28, and above the 200-day MA of 15.23, indicating a neutral trend. The MACD of -0.47 indicates Positive momentum. The RSI at 42.86 is Neutral, neither overbought nor oversold. The STOCH value of 46.70 is Neutral, 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
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
59 Neutral | $1.30B | ― | -36.20% | ― | -7.49% | -64.33% | |
58 Neutral | $775.11M | ― | -2.98% | ― | 15.45% | 49.82% | |
56 Neutral | $1.05B | -11.66 | -10.09% | ― | -21.27% | -207.30% | |
55 Neutral | $777.77M | -106.09 | -5.43% | ― | -3.23% | -122.16% | |
54 Neutral | $940.95M | -8.78 | -11.32% | ― | 5.92% | -746.07% | |
54 Neutral | $1.32B | ― | -19.47% | ― | 14.28% | -1644.64% |
* Technology Sector Average
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Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.