In a report released today, Christian Schwab from Craig-Hallum maintained a Buy rating on Aehr Test Systems (AEHR – Research Report), with a price target of $25.00.
Christian Schwab has given his Buy rating due to a combination of factors related to Aehr Test Systems’ market position and financial performance. Despite a reduction in the company’s full fiscal year 2024 revenue guidance, which was attributed to a slowdown in the electric vehicle market affecting customer order timings, the analyst maintains a positive outlook. Schwab notes that while there has been a shift in product mix demand from Aehr’s largest silicon carbide customer and a delay in a potential major new customer order, the company’s overall forecast remains stable. Moreover, management’s expectation of market growth resuming in FY25 and beyond, particularly in silicon carbide for electric vehicles, underpins the Buy rating.
Furthermore, Schwab emphasizes the long-term opportunities in silicon photonics and gallium nitride markets, suggesting a diversified potential for growth. The financial results for Q2 show alignment with expectations, and better-than-anticipated gross margins and lower operational expenses contribute to a positive earnings surprise. These financials, coupled with the belief in continuous albeit moderated growth, support the analyst’s decision to maintain the Buy rating while adjusting the price target to $25, based on a 25 times multiple of the projected FY25 earnings per share.
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Aehr Test Systems (AEHR) Company Description:
Aehr Test Systems engages in the design, manufacture, and marketing of test and burn-in products to the semiconductor manufacturing industry. Its products include wafer contact test systems, test during burn-in systems, test fixtures, and die carriers. The company was founded by Rhea J. Posedel on May 25, 1977 and is headquartered in Fremont, CA.
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