NASDAQ:AEHR stands out as a growth opportunity that won't break the bank.

Last update: Nov 9, 2023

Our stock screener has spotted AEHR TEST SYSTEMS (NASDAQ:AEHR) as a growth stock which is not overvalued. NASDAQ:AEHR is scoring great on several growth aspects while it also shows decent health and profitability. At the same time it remains remains attractively priced. We'll dive into each aspect below.

A Closer Look at Growth for NASDAQ:AEHR

A key component of ChartMill's stock assessment is the Growth Rating, which spans from 0 to 10. This rating evaluates diverse growth factors, such as EPS and revenue growth, considering both past performance and future projections. NASDAQ:AEHR has received a 9 out of 10:

AEHR shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 55.32%, which is quite impressive.
Measured over the past years, AEHR shows a very strong growth in Earnings Per Share. The EPS has been growing by 53.68% on average per year.
AEHR shows a strong growth in Revenue. In the last year, the Revenue has grown by 34.12%.
The Revenue has been growing by 17.05% on average over the past years. This is quite good.
The Earnings Per Share is expected to grow by 50.12% on average over the next years. This is a very strong growth
Based on estimates for the next years, AEHR will show a very strong growth in Revenue. The Revenue will grow by 51.97% on average per year.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.

Valuation Assessment of NASDAQ:AEHR

ChartMill assigns a Valuation Rating to each stock, ranging from 0 to 10. This rating is calculated by analyzing different valuation elements, such as price to earnings and free cash flow, both in absolute terms and relative to the market and industry. In the case of NASDAQ:AEHR, the assigned 5 reflects its valuation:

Based on the Price/Forward Earnings ratio, AEHR is valued a bit cheaper than the industry average as 74.29% of the companies are valued more expensively.
AEHR's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
The decent profitability rating of AEHR may justify a higher PE ratio.
AEHR's earnings are expected to grow with 50.12% in the coming years. This may justify a more expensive valuation.

A Closer Look at Health for NASDAQ:AEHR

ChartMill assigns a proprietary Health Rating to each stock. The score is computed by evaluating various liquidity and solvency ratios and ranges from 0 to 10. NASDAQ:AEHR was assigned a score of 8 for health:

An Altman-Z score of 17.69 indicates that AEHR is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 17.69, AEHR belongs to the top of the industry, outperforming 88.57% of the companies in the same industry.
There is no outstanding debt for AEHR. This means it has a Debt/Equity and Debt/FCF ratio of 0 and it is amongst the best of the sector and industry.
AEHR has a Current Ratio of 5.00. This indicates that AEHR is financially healthy and has no problem in meeting its short term obligations.
AEHR's Current ratio of 5.00 is fine compared to the rest of the industry. AEHR outperforms 73.33% of its industry peers.
A Quick Ratio of 3.36 indicates that AEHR has no problem at all paying its short term obligations.
Looking at the Quick ratio, with a value of 3.36, AEHR is in the better half of the industry, outperforming 63.81% of the companies in the same industry.

Profitability Assessment of NASDAQ:AEHR

ChartMill employs its own Profitability Rating system for stock evaluation. This score, ranging from 0 to 10, is derived from an analysis of diverse profitability metrics and margins. In the case of NASDAQ:AEHR, the assigned 6 is noteworthy for profitability:

The Return On Assets of AEHR (17.68%) is better than 84.76% of its industry peers.
AEHR has a Return On Equity of 23.26%. This is in the better half of the industry: AEHR outperforms 79.05% of its industry peers.
Looking at the Return On Invested Capital, with a value of 15.61%, AEHR is in the better half of the industry, outperforming 76.19% of the companies in the same industry.
AEHR's Profit Margin of 24.88% is amongst the best of the industry. AEHR outperforms 81.90% of its industry peers.
In the last couple of years the Profit Margin of AEHR has grown nicely.
Looking at the Operating Margin, with a value of 22.74%, AEHR is in the better half of the industry, outperforming 74.29% of the companies in the same industry.
AEHR's Operating Margin has improved in the last couple of years.
With a decent Gross Margin value of 51.05%, AEHR is doing good in the industry, outperforming 64.76% of the companies in the same industry.
In the last couple of years the Gross Margin of AEHR has grown nicely.

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Check the latest full fundamental report of AEHR for a complete fundamental analysis.

Keep in mind

This article should in no way be interpreted as advice in any way. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.