Advanced Energy (AEIS) AI Stock Analysis

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Advanced Energy

(NASDAQ:AEIS)

67Neutral

Advanced Energy displays a stable financial foundation with low leverage and positive cash flow but faces revenue contraction and margin pressures. The positive earnings call sentiment, driven by growth in key segments, contrasts with the technical analysis indicating downward momentum and high valuation concerns. Overall, the stock presents a moderate investment outlook, with significant growth potential contingent on overcoming sector-specific challenges.

Positive Factors

Data Center Sales

Record Data Center sales were up 41% year-over-year and 10% sequentially, with strong demand expected to continue.

Operational Efficiency

The closure of China manufacturing should improve operational efficiencies, which is expected to boost margins.

Semiconductor Market Growth

Semiconductor revenue is expected to grow faster than the market due to initial new product ramps.

Negative Factors

Inventory Challenges

Industrial and Telecom sectors are still facing challenges due to ongoing inventory digestion, delaying full recovery until the second half of 2025.

Macro Environment Challenges

A worsening macro environment could be an overhang to growth, particularly in the telecom and networking sectors.

Revenue Dependence

Semiconductors, which account for a significant portion of sales, remain largely dependent on the overall wafer fabrication equipment environment, which is expected to remain flat.

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

Market Cap

$3.67B

Dividend Yield0.41%

Average Volume (3M)410.15K

Price to Earnings (P/E)68.0

Beta (1Y)1.91

Revenue Growth-10.49%

EPS Growth-57.78%

CountryUS

Employees10,000

SectorIndustrials

Sector Strength75

IndustryElectrical Equipment & Parts

Share Statistics

EPS (TTM)1.43

Shares Outstanding37,721,672

10 Day Avg. Volume322,471

30 Day Avg. Volume410,146

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)0.00

Price to Cash Flow (P/CF)0.00

P/FCF Ratio0.00

Enterprise Value/Market Cap1.18

Enterprise Value/RevenueN/A

Enterprise Value/Gross Profit8.21

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$124.71

Price Target Upside28.03% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering8

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 through the sale of its advanced power conversion and control products to a diverse range of industries, with a significant focus on the semiconductor manufacturing sector. The company benefits from long-term relationships with leading semiconductor equipment manufacturers, who rely on AEIS's products for their high-performance and reliability. Additionally, AEIS has expanded its reach into the industrial and medical sectors, offering tailored solutions that cater to the specific needs of these industries. The company's revenue model is primarily based on direct product sales, but it also involves service and maintenance contracts that provide a steady stream of income. Strategic partnerships and collaborations with key industry players further enhance AEIS's market presence and contribute to its earnings.

Advanced Energy Financial Statement Overview

Summary

Advanced Energy's financial statements reveal a company navigating through revenue contraction and margin pressures, yet maintaining a robust balance sheet with low leverage. Cash flow generation, albeit declining, remains positive, allowing the company to sustain operations and invest in growth opportunities. The financial health is stable, but attention should be paid to reversing revenue and margin declines.

Income Statement

Positive

The company has shown a decline in total revenue over recent years, with a significant drop from $1.84 billion in 2022 to $1.48 billion in 2024. The Gross Profit Margin in 2024 was approximately 35.7%, and the Net Profit Margin was 3.7%. Both metrics indicate a narrowing of margins, potentially reflecting increased cost pressures or decreased pricing power. EBIT and EBITDA margins have also decreased, highlighting reduced operational efficiency.

Balance Sheet

Positive

The company's balance sheet is relatively strong, with a low Debt-to-Equity Ratio of 0.09 in 2024, indicating low leverage. The Return on Equity (ROE) has decreased to 4.5% in 2024, reflecting lower profitability. The Equity Ratio stands at 53.2%, showcasing a healthy capital structure with more than half of the company's assets financed by equity.

Cash Flow

Positive

Operating Cash Flow has decreased from $208.9 million in 2023 to $132.9 million in 2024, affecting the company's liquidity. However, the Free Cash Flow remains positive at $76.1 million in 2024, ensuring some financial flexibility. The Operating Cash Flow to Net Income Ratio is strong, indicating efficient cash conversion from net income.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
1.48B	1.66B	1.85B	1.46B	1.42B
	Gross Profit
529.34M	592.40M	675.51M	532.32M	541.87M
	EBIT
36.61M	113.69M	233.09M	151.68M	176.02M
	EBITDA
145.94M	205.56M	305.52M	210.15M	236.96M
	Net Income Common Stockholders
54.21M	128.28M	199.66M	134.74M	134.68M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
722.09M	1.04B	458.82M	546.67M	483.02M
	Total Assets
2.26B	2.56B	1.99B	1.82B	1.65B
	Total Debt
107.00M	1.02B	390.03M	408.58M	338.64M
	Net Debt
-615.08M	-21.80M	-68.78M	-135.80M	-141.73M
	Total Liabilities
1.06B	1.41B	925.90M	945.84M	833.30M
	Stockholders Equity
1.20B	1.14B	1.07B	870.85M	814.74M
Cash Flow		Free Cash Flow
76.14M	147.93M	124.70M	108.37M	164.75M
	Operating Cash Flow
132.92M	208.94M	183.59M	140.25M	201.24M
	Investing Cash Flow
-73.54M	-64.75M	-208.27M	-47.30M	-42.84M
	Financing Cash Flow
-377.09M	445.68M	-61.87M	-25.37M	-29.61M

Advanced Energy Technical Analysis

Technical Analysis Sentiment

Negative

Last Price97.41

Price Trends

50DMA

101.74

Negative

100DMA

109.60

Negative

200DMA

108.29

Negative

Market Momentum

MACD

-0.72

Negative

RSI

53.12

Neutral

STOCH

82.22

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AEIS, the sentiment is Negative. The current price of 97.41 is above the 20-day moving average (MA) of 89.89, below the 50-day MA of 101.74, and below the 200-day MA of 108.29, indicating a neutral trend. The MACD of -0.72 indicates Negative momentum. The RSI at 53.12 is Neutral, neither overbought nor oversold. The STOCH value of 82.22 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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
POWL	75 Outperform	$2.21B	13.91	37.22%	0.57%	38.27%	105.52%
ATKR	71 Outperform	$2.20B	6.18	25.00%	2.01%	-12.01%	-38.33%
AEIS	67 Neutral	$3.67B	67.99	4.80%	0.41%	-10.49%	-57.78%
ENS	67 Neutral	$3.41B	10.69	18.36%	1.09%	-2.94%	22.32%
Sector *	63 Neutral	$4.23B	11.54	5.34%	209.77%	4.14%	-9.49%
ENR	63 Neutral	$1.94B	33.98	37.60%	4.43%	-0.31%	-37.69%
BE	62 Neutral	$4.22B	―	-5.49%	―	10.53%	90.76%

* Industrials Sector Average

Performance Comparison

AEIS

Advanced Energy

108.31

13.01

13.65%

ENR

Energizer Holdings

27.04

-1.22

-4.32%

ENS

EnerSys

86.60

-4.87

-5.32%

POWL

Powell Industries

183.11

23.40

14.65%

ATKR

Atkore International Group

63.87

-109.06

-63.07%

Bloom Energy

16.81

5.37

46.94%

Advanced Energy Earnings Call Summary

Earnings Call Date:Apr 30, 2025

(Q1-2025)

% Change Since: 0.00%|

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.

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.