Aehr Test Systems Fundamental Analysis (NASDAQ: AEHR)
Aehr Test Systems (NASDAQ: AEHR) shows weak financial fundamentals with a PE ratio of 1092.95, profit margin of 2.93%, and ROE of 1.20%. The company generates $0.1B in annual revenue with weak year-over-year growth of -10.95%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 21.7/100 based on profitability, valuation, growth, and balance sheet metrics. The F grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze AEHR's fundamental strength across five key dimensions:
Efficiency Score
WeakAEHR struggles to generate sufficient returns from assets.
Valuation Score
WeakAEHR trades at a premium to fair value.
Growth Score
WeakAEHR faces weak or negative growth trends.
Financial Health Score
ExcellentAEHR maintains a strong and stable balance sheet.
Profitability Score
WeakAEHR struggles to sustain strong margins.
Key Financial Metrics
Is AEHR Expensive or Cheap?
P/E Ratio
AEHR trades at 1092.95 times earnings. This suggests a premium valuation.
PEG Ratio
When adjusting for growth, AEHR's PEG of 23.23 indicates potential overvaluation.
Price to Book
The market values Aehr Test Systems at 9.57 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 944.65 times EBITDA. This signals the market has high growth expectations.
How Well Does AEHR Make Money?
Net Profit Margin
For every $100 in sales, Aehr Test Systems keeps $2.93 as profit after all expenses.
Operating Margin
Core operations generate -5.54 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $1.20 in profit for every $100 of shareholder equity.
ROA
Aehr Test Systems generates $0.83 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Aehr Test Systems generates limited operating cash flow of $-6.09M, signaling weaker underlying cash strength.
Free Cash Flow
Aehr Test Systems generates weak or negative free cash flow of $-6.82M, restricting financial flexibility.
FCF Per Share
Each share generates $-0.21 in free cash annually.
FCF Yield
AEHR converts -0.32% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
1092.95
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
23.23
vs 25 benchmark
P/B Ratio
Price to book value ratio
9.57
vs 25 benchmark
P/S Ratio
Price to sales ratio
29.16
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.04
vs 25 benchmark
Current Ratio
Current assets to current liabilities
7.15
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.01
vs 25 benchmark
ROA
Return on assets percentage
0.008
vs 25 benchmark
ROCE
Return on capital employed
-0.02
vs 25 benchmark
How AEHR Stacks Against Its Sector Peers
| Metric | AEHR Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 1092.95 | 32.70 | Worse (Expensive) |
| ROE | 1.20% | 758.00% | Weak |
| Net Margin | 2.93% | -4312.00% (disorted) | Weak |
| Debt/Equity | 0.04 | 0.96 | Strong (Low Leverage) |
| Current Ratio | 7.15 | 12.15 | Strong Liquidity |
| ROA | 0.83% | 1067467.00% | Weak |
AEHR outperforms its industry in 2 out of 6 key metrics, but lagging in P/E Ratio.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Aehr Test Systems's 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
104.63%
Industry Style: Growth, Innovation, High Beta
High GrowthEPS CAGR
-7.94%
Industry Style: Growth, Innovation, High Beta
DecliningFCF CAGR
-182.81%
Industry Style: Growth, Innovation, High Beta
Declining