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Advanced Energy Industries, Inc. (AEIS)
:AEIS

Advanced Energy (AEIS) AI Stock Analysis

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Advanced Energy

(NASDAQ:AEIS)

Rating:76Outperform
Price Target:
$147.00
▲(11.10%Upside)
Advanced Energy's overall stock score reflects solid financial performance with strong revenue growth and cash flow. Technical indicators show positive momentum, although the stock is nearing overbought levels. The high P/E ratio suggests valuation concerns, balanced by positive guidance and strategic financial flexibility from recent corporate events.
Positive Factors
AI Data Center Growth
AE's rapidly growing AI data center business is expected to grow significantly in the coming years.
Revenue and Earnings Performance
Advanced Energy's non-GAAP net income and sales for 1Q25 were above investor expectations.
Semiconductor and Data Center Strength
Advanced Energy Industries delivered a positive beat and raise, driven by strength in the semiconductor and data center sectors.
Negative Factors
Industrial and Medical Segment Challenges
Industrial and Medical 1Q25 sales were down 22.9% year-over-year and 16.3% sequentially, with tariffs potentially impacting the pace of recovery.
Tariff and Export Restrictions
The semiconductor segment, which constitutes a large portion of sales, is subject to volatility due to tariffs and China export restrictions.

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

Advanced Energy Business Overview & Revenue Model

Company DescriptionAdvanced Energy Industries, Inc. (AEIS) is a global leader specializing in the design and manufacturing of highly engineered, precision power conversion, measurement, and control solutions. The company serves a diverse range of industries, including semiconductor manufacturing, industrial, medical, and telecommunications. Advanced Energy's core products include high and low voltage power supplies, thermal instrumentation, and power control platforms that enable innovation and efficiency across complex production processes.
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:Apr 30, 2025
(Q1-2025)
|
% Change Since: 35.95%|
Next Earnings Date:Jul 30, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mix of strong performance in data center and semiconductor markets, offset by challenges in industrial medical and telecom segments. The company is experiencing significant growth in some areas while facing headwinds from tariffs and market-specific declines.
Q1-2025 Updates
Positive Updates
Strong Revenue Growth
Revenue increased 24% year-over-year, led by strength in data center computing and semiconductor markets.
Record Data Center Revenue
Data Center Computing revenue was a record $96 million, up 9% sequentially and 130% year-over-year.
New Product Success
Strong customer pull for next generation products with over 350 qualification units shipped, a fivefold increase from a year ago.
Operational Efficiency Gains
Improvements in operational efficiency drove better than expected gross margin of 37.9%, up 280 basis points year-over-year.
Share Buyback
Repurchased $22.7 million worth of common stock at an average price of $83.78 per share.
Negative Updates
Industrial Medical Revenue Decline
Industrial medical revenue decreased sequentially by 16% and 23% from last year due to ongoing channel inventory destocking and lower turns revenue.
Telecom and Networking Revenue Decline
Telecom and Networking revenue declined 5% sequentially and 2% year-over-year to $22 million.
Impact of Tariffs
New tariff regimes introduced macroeconomic uncertainty, particularly impacting the industrial and medical markets.
Company Guidance
During the Advanced Energy first quarter 2025 earnings call, the company provided guidance and updates on various metrics. Revenue for Q1 was $405 million, a 24% increase year-over-year, and exceeded guidance, driven by strong performance in data center computing and semiconductor markets. The company achieved a gross margin of 37.9%, better than anticipated, and reported earnings per share of $1.23. Advanced Energy expects sequential revenue and earnings growth in Q2, with forecasted revenue of approximately $420 million, plus or minus $20 million, and a gross margin around 38%. The company plans to increase its full-year 2025 CapEx guidance to 5% to 6% of revenue due to anticipated market share gains in data center and next-generation semiconductor products. Despite macroeconomic uncertainties and new tariffs, Advanced Energy remains confident in its ability to achieve its gross margin expansion goals, supported by a favorable geographic manufacturing footprint and strategic operational improvements.

Advanced Energy Financial Statement Overview

Summary
Advanced Energy shows solid financial health with positive revenue growth and strong cash flow management. Despite some pressure on profitability margins, the company's low leverage ratio and impressive cash generation enhance its financial stability.
Income Statement
75
Positive
Advanced Energy's TTM revenue shows a moderate increase, indicating positive growth with a 5.2% increase over the previous annual period. The gross profit margin is healthy at 35.9%, and the net profit margin is stable at 4.7%. However, both EBIT and EBITDA margins show some compression, suggesting increased operational costs impacting profitability.
Balance Sheet
70
Positive
The company's balance sheet is strong with a low debt-to-equity ratio of 0.094, indicating low leverage. The equity ratio stands at 53.4%, showing a solid equity position. However, the return on equity (ROE) is relatively low at 6.0%, suggesting limited returns on shareholder's equity.
Cash Flow
80
Positive
The cash flow statement is robust with a notable increase in free cash flow by 33.3%. The operating cash flow to net income ratio is 2.07, highlighting strong cash generation relative to net income. The free cash flow to net income ratio is also impressive at 1.34, indicating efficient cash management and good liquidity.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue1.56B1.48B1.66B1.85B1.46B1.42B
Gross Profit560.32M529.34M592.40M675.51M532.32M541.87M
EBITDA130.67M138.22M205.56M305.52M210.15M236.96M
Net Income73.70M54.21M128.28M199.66M134.74M134.68M
Balance Sheet
Total Assets2.30B2.26B2.56B1.99B1.82B1.65B
Cash, Cash Equivalents and Short-Term Investments723.00M722.09M1.04B458.82M546.67M483.02M
Total Debt681.30M671.70M1.02B390.03M408.58M338.64M
Total Liabilities1.07B1.06B1.41B925.90M945.84M833.30M
Stockholders Equity1.23B1.20B1.14B1.07B870.85M814.74M
Cash Flow
Free Cash Flow98.31M73.96M147.93M124.70M108.37M164.75M
Operating Cash Flow152.36M130.75M208.94M183.59M140.25M201.24M
Investing Cash Flow-69.92M-73.54M-64.75M-208.27M-47.30M-42.84M
Financing Cash Flow-376.36M-377.09M445.68M-61.87M-25.37M-29.61M

Advanced Energy Technical Analysis

Technical Analysis Sentiment
Positive
Last Price132.31
Price Trends
50DMA
114.61
Positive
100DMA
110.43
Positive
200DMA
111.08
Positive
Market Momentum
MACD
5.02
Negative
RSI
68.21
Neutral
STOCH
79.63
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 132.31 is above the 20-day moving average (MA) of 125.48, above the 50-day MA of 114.61, and above the 200-day MA of 111.08, indicating a bullish trend. The MACD of 5.02 indicates Negative momentum. The RSI at 68.21 is Neutral, neither overbought nor oversold. The STOCH value of 79.63 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 (63)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
78
Outperform
$2.57B14.9737.08%0.54%27.43%67.93%
76
Outperform
$4.98B68.376.36%0.30%0.06%-28.32%
74
Outperform
$2.39B13.7012.73%1.86%-12.02%-67.69%
ENENS
73
Outperform
$3.35B9.6519.82%1.11%1.00%38.51%
BEBE
73
Outperform
$5.15B0.86%20.95%
63
Neutral
kr63.91B12.691.54%13.28%0.04%-3.90%
ENENR
57
Neutral
$1.46B27.6233.46%5.98%0.39%-37.01%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
AEIS
Advanced Energy
132.31
26.84
25.45%
ENR
Energizer Holdings
20.24
-7.96
-28.23%
ENS
EnerSys
86.76
-13.82
-13.74%
POWL
Powell Industries
212.92
70.24
49.23%
ATKR
Atkore International Group
71.15
-59.07
-45.36%
BE
Bloom Energy
22.18
10.81
95.07%

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: Jun 24, 2025