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Advanced Energy (AEIS)
NASDAQ:AEIS
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Advanced Energy (AEIS) AI Stock Analysis

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AEIS

Advanced Energy

(NASDAQ:AEIS)

Rating:70Neutral
Price Target:
$153.00
▲(4.44% Upside)
Advanced Energy's overall stock score reflects strong earnings growth and strategic diversification, particularly in the data center segment. However, high valuation metrics and challenges in certain segments temper the outlook. The company's solid financial management and recent credit agreement provide additional support.
Positive Factors
Design Wins
Hyperscaler design wins have begun to ramp, resulting in Data Center revenues nearly doubling year-over-year.
Earnings
AEIS reported revenue and EPS that exceeded consensus estimates, driven by sustained strength in the Data Center sector.
Financial Performance
Q2 revenues increased 21% year-over-year, above the midpoint of guidance and ahead of consensus expectations of +15%.
Negative Factors
Semiconductor Sales
Semiconductor sales for 2Q25 were down 5.7% sequentially.
Tariffs
Tariffs may pose a headwind to gross margins, although there are strategies to mitigate the impact.

Advanced Energy (AEIS) vs. SPDR S&P 500 ETF (SPY)

Advanced Energy Business Overview & Revenue Model

Company DescriptionAdvanced Energy Industries, Inc. designs, manufactures, sells, and supports precision power conversion, measurement, and control solutions worldwide. It offers plasma power solutions, including direct current (DC), pulsed DC, low frequency alternating current, high voltage, and radio frequency (RF) power supplies, as well as RF power supplies, RF matching networks, and RF instrumentation products; and remote plasma sources for reactive gas applications. The company also provides power control modules and thermal instrumentation products for rapid thermal processing, chemical vapor deposition, epitaxy, crystal growing, and chemical processing, as well as metal, carbon fiber, and glass manufacturing and other industrial power applications; high voltage DC-DC products for semiconductor wafer processing and metrology, electrostatic clamping of substrates, scientific instrumentation, mass spectrometry, and X-ray systems for industrial and analytical applications; and low voltage DC-DC board mounted solutions for use in healthcare, telecommunications, test and measurement, instrumentation, and industrial equipment applications, as well as distributed power in server and storage systems. In addition, it offers gas sensing and monitoring products for the energy market, air quality monitoring, and automobile emission monitoring and testing; and embedded power products for medical equipment or IEC 60950-1 for information technology equipment. Further, it offers conversions, upgrades, and refurbishments and used equipment to companies, as well as repair services. The company provides its products through a direct sales force, independent sales representatives, channel partners, and distributors. Advanced Energy Industries, Inc. was incorporated in 1981 and is headquartered in Denver, Colorado.
How the Company Makes MoneyAdvanced Energy Industries generates revenue primarily through the sale of its advanced power conversion and control products. The company's key revenue streams include the semiconductor and industrial sectors, where it provides mission-critical solutions that enhance the performance and reliability of manufacturing processes. AEIS also derives income from servicing and maintaining its products, offering extended warranties, and providing technical support. Significant partnerships with leading semiconductor manufacturers and industrial companies further bolster its earnings, as these relationships ensure a steady demand for its precision-engineered solutions.

Advanced Energy Earnings Call Summary

Earnings Call Date:Aug 05, 2025
(Q2-2025)
|
% Change Since: 4.96%|
Next Earnings Date:Nov 04, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong revenue growth driven by the data center segment and improved profitability. However, challenges in industrial and medical segments, along with tariff impacts and a sequential decline in semiconductor revenue, present concerns. The company's diversified market strategy and investments in growth areas provide a positive outlook.
Q2-2025 Updates
Positive Updates
Strong Revenue Growth
Second quarter revenue exceeded the high end of guidance, driven by strong demand for data center power solutions. Year-over-year growth was 21%, marking the third consecutive quarter of year-over-year growth. Overall 2025 revenue growth is projected at approximately 17%.
Data Center Segment Surge
Data center computing revenue increased 47% quarter-over-quarter and 94% year-over-year. The company expects to grow data center revenue over 80% in 2025.
Improved Profitability
Earnings per share increased to $1.50, up 76% from the previous year. Gross margin improved slightly quarter-over-quarter, reaching 38.1% despite headwinds.
Investments Fueling Growth
The company is making technology and capacity investments necessary to fuel long-term profitable growth, with strong customer interest in new semiconductor platforms and record design wins in Industrial and Medical.
Diversified Market Strategy
Business diversification strategy drives consistent profitability and cash flow, with success in data center compensating for softness in industrial and medical.
Negative Updates
Industrial and Medical Revenue Decline
Industrial and Medical revenue grew sequentially but was down 13% year-over-year, though a recovery is expected.
Sequential Decline in Semiconductor Revenue
Semiconductor revenue was down 6% sequentially, though up 11% year-over-year. The segment is projected to grow mid-single digits in 2025, down from an earlier 10% projection.
Tariff Challenges
Tariff costs were higher than initially expected, impacting gross margins by over 100 basis points this quarter.
Flat Telecom and Networking Revenue
Telecom and networking revenue remained flat sequentially at $22 million, with no significant growth expected in the near term.
Company Guidance
In the second quarter of 2025, Advanced Energy surpassed the high end of its revenue guidance, achieving a 21% year-over-year increase, marking the third consecutive quarter of growth. Earnings per share also reached the high end of the guidance range, reflecting the success of their business diversification strategy across data centers, semiconductors, and industrial and medical markets. Data center revenue soared by 94% year-over-year and 47% sequentially, driven by demand for their high-efficiency, high-power density products, particularly for AI applications, with projections of over 80% growth in 2025. While semiconductor revenue experienced a sequential decline, it still achieved double-digit year-on-year growth, with expectations of mid-single-digit growth for the year. The Industrial and Medical segment saw a sequential revenue increase, although it remained down 13% year-over-year, with an anticipated market recovery. Gross margin slightly improved to 38.1% in Q2, despite tariff pressures, with a target of 39-40% by the end of 2025. Overall, the company expects 2025 revenue growth of approximately 17%, bolstered by strategic investments and a strong design win momentum.

Advanced Energy Financial Statement Overview

Summary
Advanced Energy demonstrates solid cash flow management and a stable balance sheet, with improvements in leverage. However, profitability metrics indicate potential areas for operational enhancement. The company is on a recovery path in terms of revenue growth, but further efforts are needed to boost margins and returns.
Income Statement
72
Positive
Advanced Energy shows a moderate revenue growth rate of 4.91% in the TTM, recovering from a decline in previous years. The gross profit margin remains stable around 35.9%, indicating consistent cost management. However, the net profit margin is relatively low at 4.73%, suggesting room for improvement in profitability. The EBIT and EBITDA margins are also modest, reflecting operational efficiency challenges.
Balance Sheet
68
Positive
The company's debt-to-equity ratio has improved to 0.55 in the TTM, indicating a reduction in leverage compared to previous years. Return on equity is moderate at 6.19%, showing a decline from past performance, which may concern investors. The equity ratio is stable, suggesting a balanced capital structure.
Cash Flow
75
Positive
Free cash flow growth is strong at 27.22% in the TTM, highlighting effective cash management. The operating cash flow to net income ratio is 0.48, indicating decent cash generation relative to earnings. The free cash flow to net income ratio of 0.65 suggests a healthy conversion of earnings into cash.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue1.64B1.48B1.66B1.85B1.46B1.42B
Gross Profit602.67M529.34M592.40M675.51M532.32M541.87M
EBITDA131.61M138.22M205.56M305.52M210.15M236.96M
Net Income83.87M54.21M128.28M199.66M134.74M134.68M
Balance Sheet
Total Assets2.38B2.26B2.56B1.99B1.82B1.65B
Cash, Cash Equivalents and Short-Term Investments713.50M722.09M1.04B458.82M546.67M483.02M
Total Debt121.40M671.70M1.02B390.03M408.58M338.64M
Total Liabilities1.12B1.06B1.41B925.90M945.84M833.30M
Stockholders Equity1.26B1.20B1.14B1.07B870.85M814.74M
Cash Flow
Free Cash Flow125.07M73.96M147.93M124.70M108.37M164.75M
Operating Cash Flow192.45M130.75M208.94M183.59M140.25M201.24M
Investing Cash Flow-69.57M-73.54M-64.75M-208.27M-47.30M-42.84M
Financing Cash Flow-396.74M-377.09M445.68M-61.87M-25.37M-29.61M

Advanced Energy Technical Analysis

Technical Analysis Sentiment
Positive
Last Price146.50
Price Trends
50DMA
133.32
Positive
100DMA
117.58
Positive
200DMA
116.30
Positive
Market Momentum
MACD
2.18
Positive
RSI
63.03
Neutral
STOCH
75.23
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AEIS, the sentiment is Positive. The current price of 146.5 is above the 20-day moving average (MA) of 141.16, above the 50-day MA of 133.32, and above the 200-day MA of 116.30, indicating a bullish trend. The MACD of 2.18 indicates Positive momentum. The RSI at 63.03 is Neutral, neither overbought nor oversold. The STOCH value of 75.23 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AEIS.

Advanced Energy Risk Analysis

Advanced Energy disclosed 38 risk factors in its most recent earnings report. Advanced Energy reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Advanced Energy Peers Comparison

Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
78
Outperform
$3.53B10.1619.13%1.02%1.00%38.51%
78
Outperform
$2.85B16.4134.00%0.46%14.32%33.76%
70
Neutral
$5.26B63.337.04%0.27%0.06%-28.32%
64
Neutral
$10.64B16.015.48%2.12%2.72%-24.90%
63
Neutral
$9.09B7,829.794.65%22.72%
63
Neutral
$2.04B8.60164.19%4.13%0.39%-37.01%
58
Neutral
$1.90B18.107.29%2.35%-12.09%-78.18%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
AEIS
Advanced Energy
146.50
47.42
47.86%
ENR
Energizer Holdings
29.06
0.32
1.11%
ENS
EnerSys
94.01
0.67
0.72%
POWL
Powell Industries
233.41
69.65
42.53%
ATKR
Atkore International Group
54.99
-38.38
-41.11%
BE
Bloom Energy
36.80
25.31
220.28%

Advanced Energy Corporate Events

Private Placements and FinancingBusiness Operations and Strategy
Advanced Energy Enters New Credit Agreement with Lenders
Positive
May 12, 2025

On May 8, 2025, Advanced Energy terminated its prior credit agreement from 2019, which provided a $600 million senior unsecured revolving facility, and entered into a new credit agreement with several lenders, including HSBC and Citibank. The new agreement also offers $600 million in financing with the option to increase by $250 million, featuring a five-year term and interest rates based on the Term SOFR or a Base Rate. This move is expected to enhance Advanced Energy’s financial flexibility and support its strategic initiatives, with implications for its leverage management and potential material acquisitions.

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.Date of analysis: Aug 06, 2025