One-glance verdict
Overvalued
$4.01 our estimate vs market $49.90
Wall Street consensus: $123.75 (2,989.2% higher than our fair-value estimate)
1146% above our estimate, beyond the bull case
Fundamentals snapshot
Aehr Test Systems, Inc.
AEHR · NCM · Technology · Semiconductor Equipment & Materials
Current price
$49.90
52-week range
$18.70 - $147.40
Market cap
$1.63B
Balance sheet
Healthy
-10.39x Concerning
Net cash $95.10M. 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 Return on equity was -4.2% last year — the company lost money on shareholders' equity.
- Risk Operating margin compressed from 20.6% to 18.3% over 3 years.
What this company does
Aehr Test Systems, Inc.
Aehr Test Systems makes special machines that test computer chips before they go into things like phones and computers, and their money mainly comes from selling these machines to chip makers. This is important because reliable chips are key to all our modern gadgets, and Aehr helps ensure those chips work properly by checking them thoroughly.
How the company got here
Aehr Test Systems, Inc. was founded in 1977 and has since established itself as a provider of crucial testing equipment for the semiconductor industry. Over the decades, the company has evolved its technology to meet the increasingly complex demands of chip manufacturing. A key turning point for Aehr has been its focus on advanced materials like silicon carbide (SiC) and gallium nitride (GaN), which are essential for high-performance applications in electric vehicles and renewable energy. This strategic shift has positioned Aehr to capitalize on the growing demand for these next-generation semiconductors.
What it actually does
Aehr Test Systems designs and manufactures specialized equipment that tests and 'burns-in' semiconductor devices. Think of it like a rigorous quality control process for computer chips. 'Burn-in' involves running the chips at high temperatures and voltages to weed out any defects that might cause them to fail early in their life. This ensures that the chips used in everything from smartphones to cars are reliable and perform as expected. Aehr's solutions are used by chip manufacturers to test chips at various stages, from the initial wafer form to individual pieces (die) and finally, packaged chips.
Test and Burn-in Systems
This is Aehr's primary business, where they sell their flagship FOX-XP and FOX-NP systems. These machines are designed to test and perform burn-in procedures on semiconductor devices. They handle a variety of chips, including those made from advanced materials like silicon carbide (SiC) and gallium nitride (GaN), which are increasingly used in power electronics for electric vehicles and other high-efficiency applications. The systems also test sensors for mobile devices, processors, and components for artificial intelligence (AI) applications. This segment represents the core of Aehr's revenue, providing essential tools for semiconductor manufacturers to ensure the quality and reliability of their products.
WaferPak and DiePak Solutions
Complementing their test systems, Aehr also offers specialized contactors and carriers, such as the FOX WaferPak Contactor and FOX DiePak Carrier. The WaferPak is used to test entire silicon wafers before they are cut into individual chips, while the DiePak is designed for testing individual chips (die) after they have been separated. These solutions allow for efficient and comprehensive testing and burn-in processes, ensuring that both the raw wafer material and the individual chips meet stringent quality standards. This business line is crucial for enabling the full capabilities of their main test systems.
Services and Support
Beyond selling equipment, Aehr provides a range of services to support its customers. This includes system installation, repair, and maintenance, as well as providing spare parts and customer training. They also offer applications engineering support, helping clients optimize their testing processes. This service component is vital for maintaining long-term customer relationships and ensuring that Aehr's complex equipment operates effectively, contributing a steady stream of recurring revenue.
What management is betting on now
Aehr's management is heavily focused on expanding its reach within the rapidly growing markets for advanced semiconductor materials like silicon carbide (SiC) and gallium nitride (GaN). These materials are critical for the performance of electric vehicles, renewable energy systems, and other high-power applications. The company is investing in developing and marketing its test solutions to meet the specific needs of manufacturers producing these next-generation chips. By concentrating on these high-growth areas, Aehr aims to secure a larger share of the semiconductor testing market and drive future revenue.
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 $4.01 vs current price $49.90
Wall Street consensus is the average analyst price target: $123.75 (2,989.2% higher than our fair-value estimate).
Our most-likely fair value is $4.01 a share — about 92.0% below today's price of $49.90, so the stock currently looks expensive (overvalued).
Is it drowning in debt?
Healthy
Net cash $95.1M - more cash than debt. Interest coverage -10.4x.
Net debt
$-95.10M
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 $9.80M Interest coverage -10.39x This is the baseline the peer rows are being compared against.
Total debt $335.89M Interest coverage -29.03x Neither company has much profit cushion over interest right now.
Total debt $27.76M Interest coverage 115.35x This peer still has a real interest-payment cushion, while AEHR does not.
Total debt $2.71B 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
-
Return on equity was -4.2% last year — the company lost money on shareholders' equity.
-
Operating margin compressed from 20.6% to 18.3% over 3 years.
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
29.66x
P/B
7.34x
P/S
32.59x
EV/EBITDA
-166.79x
PEG ratio
0.61x
Profitability
How much profit each dollar creates
Gross margin
35.3%
Operating margin
18.3%
Net margin
-14.3%
ROE
-4.2%
ROA
-4.5%
Health
Liquidity and balance-sheet strength
Debt / equity
0.04x
Current ratio
10.33x
Quick ratio
7.60x
Total debt
$9.80M
Total cash
$104.90M
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
0.0%
Payout ratio
0.0%
Last ex-div date
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