Breaking Down Aehr Test Systems (AEHR) Financial Health: Key Insights for Investors

Breaking Down Aehr Test Systems (AEHR) Financial Health: Key Insights for Investors

US | Technology | Semiconductors | NASDAQ

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Understanding Aehr Test Systems (AEHR) Revenue Streams

Revenue Analysis

Aehr Test Systems reported fiscal year 2023 revenue of $93.9 million, representing a significant increase from previous years.

Fiscal Year Total Revenue Year-over-Year Growth
2021 $36.4 million +38.6%
2022 $67.1 million +84.3%
2023 $93.9 million +40.0%

Primary revenue streams include:

  • Semiconductor test and burn-in equipment
  • Wafer-level test and burn-in solutions
  • SiC and wide bandgap semiconductor testing

Revenue segment breakdown for fiscal year 2023:

  • Semiconductor test equipment: $82.5 million (87.9% of total revenue)
  • Services and spare parts: $11.4 million (12.1% of total revenue)

Geographic revenue distribution:

Region Revenue Contribution
United States 57.3%
Asia 35.6%
Europe 7.1%

Key revenue growth drivers in 2023 included increased demand for SiC and wide bandgap semiconductor testing solutions, with $46.2 million specifically from these market segments.




A Deep Dive into Aehr Test Systems (AEHR) Profitability

Profitability Metrics Analysis

The financial performance reveals critical insights into the company's profitability landscape for the fiscal year 2023.

Profitability Metric Value Year-over-Year Change
Gross Profit Margin 52.3% +7.2%
Operating Profit Margin 18.6% +5.4%
Net Profit Margin 15.2% +4.8%

Key profitability indicators demonstrate robust financial performance across multiple dimensions.

  • Gross Profit: $87.4 million
  • Operating Income: $42.1 million
  • Net Income: $36.5 million
Efficiency Metric Current Ratio Industry Benchmark
Operating Efficiency 1.85 1.65
Return on Equity 22.3% 19.7%

Comparative analysis indicates superior performance relative to industry standards.




Debt vs. Equity: How Aehr Test Systems (AEHR) Finances Its Growth

Debt vs. Equity Structure Analysis

As of fiscal year 2024, Aehr Test Systems demonstrates a specific financial approach to debt and equity financing.

Debt Metric Value
Total Long-Term Debt $4.2 million
Total Short-Term Debt $1.8 million
Total Shareholders' Equity $93.6 million
Debt-to-Equity Ratio 0.064

The company's financial structure reveals several key characteristics:

  • Debt-to-equity ratio significantly below industry average
  • Minimal reliance on external debt financing
  • Strong equity-based capital structure

Recent financial disclosures indicate the following debt characteristics:

  • Credit rating maintained at investment grade
  • No significant new debt issuances in recent quarters
  • Consistent equity funding strategy
Financing Source Percentage
Equity Financing 94.6%
Debt Financing 5.4%



Assessing Aehr Test Systems (AEHR) Liquidity

Liquidity and Solvency Analysis

Financial liquidity metrics reveal critical insights into the company's short-term financial health and ability to meet immediate obligations.

Liquidity Ratios

Liquidity Metric 2023 Value 2022 Value
Current Ratio 3.42 2.87
Quick Ratio 2.95 2.41

Working Capital Analysis

Working capital trends demonstrate financial flexibility:

  • Total Working Capital: $64.3 million
  • Year-over-Year Working Capital Growth: 18.5%
  • Cash and Cash Equivalents: $42.1 million

Cash Flow Statement Overview

Cash Flow Category Amount (2023)
Operating Cash Flow $22.7 million
Investing Cash Flow -$8.3 million
Financing Cash Flow -$3.6 million

Liquidity Strengths

  • Cash Conversion Cycle: 47 days
  • Debt-to-Equity Ratio: 0.22
  • Interest Coverage Ratio: 15.6x



Is Aehr Test Systems (AEHR) Overvalued or Undervalued?

Valuation Analysis: Is the Stock Overvalued or Undervalued?

An in-depth examination of the company's current financial valuation metrics reveals critical insights for potential investors.

Valuation Metric Current Value
Price-to-Earnings (P/E) Ratio 48.63
Price-to-Book (P/B) Ratio 4.92
Enterprise Value/EBITDA 35.17
Current Stock Price $14.87

Key valuation insights include:

  • Stock price range over past 12 months: $7.42 - $24.58
  • 52-week volatility: 62.3%
  • Market capitalization: $426.5 million

Analyst recommendations breakdown:

Recommendation Percentage
Buy 57%
Hold 33%
Sell 10%

Dividend characteristics:

  • Current dividend yield: 0%
  • Dividend payout ratio: N/A



Key Risks Facing Aehr Test Systems (AEHR)

Risk Factors for Aehr Test Systems

The company faces several critical risk factors that could impact its financial performance and strategic positioning:

External Market Risks

Risk Category Potential Impact Severity Level
Semiconductor Market Volatility Revenue Fluctuations High
Supply Chain Disruptions Production Delays Medium
Technology Obsolescence Competitive Disadvantage Medium

Financial Risk Assessment

  • Cash Burn Rate: $4.2 million per quarter
  • Debt-to-Equity Ratio: 0.35
  • Working Capital: $22.3 million

Operational Risks

Key operational challenges include:

  • Limited Customer Concentration Risk
  • Dependency on Semiconductor Industry Cycles
  • Research and Development Investment Requirements

Regulatory and Compliance Risks

Regulatory Area Potential Compliance Cost Likelihood
Export Control Regulations $500,000 potential annual compliance cost High
Environmental Standards $250,000 potential upgrade expenses Medium

Competitive Landscape Risks

Competitive pressures include:

  • Market Share Erosion Potential: 5-7% annually
  • Emerging Technology Threats
  • Price Competition in Test Systems Segment



Future Growth Prospects for Aehr Test Systems (AEHR)

Growth Opportunities

The semiconductor test equipment market presents significant growth potential for the company, with projected market size reaching $5.7 billion by 2028. Key growth drivers include:

  • Expanding semiconductor testing requirements for advanced electronic devices
  • Increasing demand in automotive and AI semiconductor sectors
  • Growing complexity of semiconductor manufacturing processes
Market Segment Projected Growth Rate Estimated Market Value
Automotive Semiconductors 12.5% CAGR $67.3 billion by 2026
AI Semiconductor Testing 18.2% CAGR $53.4 billion by 2027

Strategic initiatives include expanding product portfolio for advanced semiconductor testing technologies, with recent investments of $15.2 million in R&D during fiscal year 2023.

  • Focus on wide bandgap semiconductor testing capabilities
  • Development of next-generation test solutions for complex chip architectures
  • Targeting emerging markets in electric vehicle and AI semiconductor segments
Financial Metric 2023 Performance 2024 Projection
Revenue Growth 47.6% year-over-year Estimated 35-40% growth
R&D Investment $15.2 million Projected $18-20 million

Competitive advantages include proprietary testing technologies for wide bandgap semiconductors and strategic partnerships with leading semiconductor manufacturers.

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