NASDAQ:AEHR: a strong growth stock preparing for the next leg up?.

Last update: Dec 13, 2023

Groth investors are looking for stocks showing high revenue and EPS growth. We will have a look here to see if AEHR TEST SYSTEMS (NASDAQ:AEHR) is suited for growth investing, while it is forming a base and may be ready to breakout. Investors should of course do their own research, but we spotted AEHR TEST SYSTEMS showing up in our growth with base formation screen, so it may be worth spending some more time on it.

Understanding NASDAQ:AEHR's Growth Score

ChartMill assigns a Growth Rating to each stock, ranging from 0 to 10. This rating is determined by analyzing different growth elements, including EPS and revenue growth, spanning both historical and future figures. In the case of NASDAQ:AEHR, the assigned 9 reflects its growth potential:

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.
The Earnings Per Share has been growing by 53.68% on average over the past years. This is a very strong growth
AEHR shows a strong growth in Revenue. In the last year, the Revenue has grown by 34.15%.
AEHR shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 17.05% yearly.
AEHR is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 50.12% yearly.
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.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.

Health Insights: 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:

AEHR has an Altman-Z score of 18.73. This indicates that AEHR is financially healthy and has little risk of bankruptcy at the moment.
AEHR has a better Altman-Z score (18.73) than 88.57% of its industry peers.
AEHR has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.
A Current Ratio of 4.98 indicates that AEHR has no problem at all paying its short term obligations.
With a decent Current ratio value of 4.98, AEHR is doing good in the industry, outperforming 73.33% of the companies in the same industry.
A Quick Ratio of 3.35 indicates that AEHR has no problem at all paying its short term obligations.
Looking at the Quick ratio, with a value of 3.35, AEHR is in the better half of the industry, outperforming 65.71% of the companies in the same industry.

Understanding NASDAQ:AEHR's Profitability

Discover ChartMill's exclusive Profitability Rating, a proprietary metric that assesses stocks on a scale of 0 to 10. It takes into consideration various profitability ratios and margins, both in absolute terms and relative to industry peers. Notably, NASDAQ:AEHR has achieved a 7:

Looking at the Return On Assets, with a value of 17.67%, AEHR belongs to the top of the industry, outperforming 84.76% of the companies in the same industry.
Looking at the Return On Equity, with a value of 23.27%, AEHR belongs to the top of the industry, outperforming 80.95% of the companies in the same industry.
With a decent Return On Invested Capital value of 15.62%, AEHR is doing good in the industry, outperforming 79.05% of the companies in the same industry.
AEHR has a better Profit Margin (24.88%) than 81.90% of its industry peers.
AEHR's Profit Margin has improved in the last couple of years.
With a decent Operating Margin value of 22.74%, AEHR is doing good in the industry, outperforming 76.19% of the companies in the same industry.
AEHR's Operating Margin has improved in the last couple of years.
The Gross Margin of AEHR (51.05%) is better than 65.71% of its industry peers.
In the last couple of years the Gross Margin of AEHR has grown nicely.

Looking at the Setup

In addition to the Technical Rating, ChartMill provides a Setup Rating for each stock. This rating, ranging from 0 to 10, assesses the level of consolidation in the stock based on multiple short-term technical indicators. Currently, NASDAQ:AEHR has a 7 as its setup rating, indicating its current consolidation status.

Although the technical rating is bad, AEHR does present a nice setup opportunity. We see reduced volatility while prices have been consolidating in the most recent period. There is a resistance zone just above the current price starting at 25.89. Right above this resistance zone may be a good entry point. We notice that large players showed an interest for AEHR in the last couple of days, which is a good sign.

Our Strong Growth screener lists more Strong Growth stocks and is updated daily.

Our latest full fundamental report of AEHR contains the most current fundamental analsysis.

For an up to date full technical analysis you can check the technical report of AEHR

Disclaimer

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.