One-glance verdict
Overvalued
$4.35 our estimate vs market $96.93
Wall Street consensus: $128.00 (2,839.6% higher than our fair-value estimate)
2126% above our estimate, beyond the bull case
Fundamentals snapshot
Aehr Test Systems, Inc.
AEHR · NCM · Technology · Semiconductor Equipment & Materials
Current price
$96.93
52-week range
$18.70 - $147.40
Market cap
$3.17B
Balance sheet
Healthy
-10.39x Concerning
Net cash $106.48M. Interest coverage shows how many times profit covers the interest bill.
What stands out
1 Reward
2 Risks
1 rewards · 2 risks
- Reward Free cash flow was positive in 3/10 years.
- Risk Operating margin compressed from 20.6% to -6.4% over 3 years.
- Risk Return on equity was -4.2% last year — the company lost money on shareholders' equity.
What this company does
Aehr Test Systems, Inc.
Aehr Test Systems sells specialized machines that stress-test computer chips to ensure they work reliably before they are put into products like electric cars and smartphones. The company's main business comes from selling these systems to chipmakers, especially for a new type of chip called silicon carbide which is critical for the growing electric vehicle industry. This positions Aehr as a key supplier to a major technology trend.
How the company got here
Founded in 1977, Aehr Test Systems started by creating equipment to test semiconductors. A key turning point was the development of its FOX-P platform, which allows for testing many tiny computer chips at once while they are still on the silicon wafer. This is like checking all the cookies on a baking sheet at the same time, rather than one by one. More recently, the company has seen a surge in interest due to the rise of electric vehicles and artificial intelligence, which use specialized chips that need the rigorous testing Aehr provides.
What it actually does
Aehr Test Systems builds machines that stress-test computer chips to find the ones that might fail early. Think of it like a quality control inspector for the tiny electronic brains, called semiconductors, that power everything from your car to the internet. Their equipment subjects these chips to high temperatures and voltages to weed out the weak ones before they get put into expensive final products. This process, known as burn-in, is crucial for devices where reliability is critical, like in electric vehicles or complex AI systems.
Test and Burn-in Systems
This is the company's main business, where it sells large, complex machines to semiconductor manufacturers. These systems, with names like FOX-XP and FOX-NP, are designed to test chips while they are still part of a whole silicon disc called a wafer. This wafer-level testing is a big deal because it saves manufacturers money by identifying faulty chips before they are cut out and put into individual packages. The company also sells systems, like the Sonoma, for testing chips that have already been packaged.
Contactors and Carriers
To make its test systems work, Aehr also sells the parts that physically connect the chips to the testing machine. These are called WaferPaks and DiePaks, and they are customized for different types of chips. You can think of these like special adapter plugs that ensure a good connection for the test. This part of the business creates a recurring stream of revenue (income that is predictable and likely to continue in the future) because customers need to buy new contactors for new chip designs.
Service and Support
Aehr provides installation, repair, training, and support for the systems it sells. This is a smaller but important part of the business that helps maintain long-term relationships with customers. When a company buys a multi-million dollar piece of equipment, they also need to make sure it keeps running smoothly. This service component ensures customers can rely on Aehr's machines for their manufacturing lines.
What management is betting on now
The company is heavily focused on the growing demand for semiconductors in artificial intelligence (AI) and silicon photonics (which uses light to transmit data on chips). They have seen a significant shift in their business, with AI-related products now making up a large portion of their orders. Management is betting that the need for highly reliable, powerful chips for AI data centers will drive strong growth for their specialized testing equipment. They are also expanding their ability to test very high-power packaged chips, which are common in AI applications.
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2025 Q1
$2.18M
FY2025 Q2
$-6.19M
FY2025 Q3
$-3.26M
FY2025 Q4
$-5.12M
FY2026 Q1
$-1.67M
FY2026 Q2
$-1.64M
FY2026 Q3
$-3.76M
FY2026 Q4
$1.70M
Revenue
$18.84M
Net income
$1.39M
Diluted EPS
0.05
Operating cash flow
$1.83M
Free cash flow
$1.70M
Fetching…
Sources
Revenue
$10.31M
Net income
$-3.20M
Diluted EPS
-0.10
Operating cash flow
$-3.69M
Free cash flow
$-3.76M
Fetching…
Sources
Revenue
$9.88M
Net income
$-3.23M
Diluted EPS
-0.11
Operating cash flow
$-1.17M
Free cash flow
$-1.64M
Fetching…
Sources
Revenue
$10.97M
Net income
$-2.08M
Diluted EPS
-0.07
Operating cash flow
$-282.00K
Free cash flow
$-1.67M
Fetching…
Sources
Revenue
$14.09M
Net income
$-2.90M
Diluted EPS
-0.10
Operating cash flow
$-2.30M
Free cash flow
$-5.12M
Fetching…
Sources
Revenue
$18.31M
Net income
$-643.00K
Diluted EPS
-0.02
Operating cash flow
$-1.60M
Free cash flow
$-3.26M
Fetching…
Sources
Revenue
$13.45M
Net income
$-1.03M
Diluted EPS
-0.03
Operating cash flow
$-5.87M
Free cash flow
$-6.19M
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Sources
Revenue
$13.12M
Net income
$660.00K
Diluted EPS
0.02
Operating cash flow
$2.38M
Free cash flow
$2.18M
Fetching…
Sources
Is it cheap or expensive?
Fair value $4.35 vs current price $96.93
Wall Street consensus is the average analyst price target: $128.00 (2,839.6% higher than our fair-value estimate).
Our most-likely fair value is $4.35 a share — about 95.5% below today's price of $96.93, so the stock currently looks expensive (overvalued).
Is it drowning in debt?
Healthy
Net cash $106.5M - more cash than debt. Interest coverage -10.4x.
Net debt
$-106.48M
Interest coverage
-10.39x
Aehr Test Systems, Inc.'s profit covers its interest bill about 0.0 times over. which is weaker than most peers shown here and 2 peers sit below 1x, which is the danger zone where profit does not fully cover the interest bill.
Healthy
Worse cushion
Baseline
Better cushion
AEHR
BASELINE
Aehr Test Systems, Inc.
Total debt $9.88M Interest coverage -10.39x This is the baseline the peer rows are being compared against.
Total debt $331.24M Interest coverage -29.03x Neither company has much profit cushion over interest right now.
Total debt $29.91M Interest coverage 115.35x This peer still has a real interest-payment cushion, while AEHR does not.
Total debt $2.67B Interest coverage 6.20x This peer still has a real interest-payment cushion, while AEHR does not.
Total debt $38.12M Interest coverage -293.99x Neither company has much profit cushion over interest right now.
Total debt $1.47B Interest coverage 4.33x This peer still has a real interest-payment cushion, while AEHR does not.
What you should know
The case for and against AEHR
1 Reward
2 Risks
Rewards
-
Free cash flow was positive in 3/10 years.
Risks
-
Operating margin compressed from 20.6% to -6.4% over 3 years.
-
Return on equity was -4.2% last year — the company lost money on shareholders' equity.
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
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Forward P/E
70.07x
P/B
14.34x
P/S
63.31x
EV/EBITDA
-269.34x
PEG ratio
0.88x
Profitability
How much profit each dollar creates
Gross margin
35.3%
Operating margin
-6.4%
Net margin
-14.3%
ROE
-4.2%
ROA
-4.5%
Health
Liquidity and balance-sheet strength
Debt / equity
0.05x
Current ratio
10.33x
Quick ratio
7.60x
Total debt
$9.88M
Total cash
$116.36M
Growth
How the business has been compounding
Revenue TTM
$50.00M
Revenue 5Y CAGR
-0.4%
EPS TTM
-0.23
EPS 5Y CAGR
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Cash flow
How much cash the business throws off
Operating CF TTM
$-3.31M
Free CF TTM
$-5.38M
FCF margin
-10.8%
Dividend
Shareholder payout
Yield
—
Payout ratio
0.0%
Last ex-div date
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