Aehr Test Systems Inc

Aehr Test Systems, Inc. (NASDAQ: AEHR) offers test solutions for testing, burning-in, and stabilizing semiconductor devices in wafer level, singulated die, and package part form. Its products include the FOX-P family of test and burn-in systems and FOX WaferPak Aligner, FOX WaferPak Contactor, FOX DiePak Carrier and FOX DiePak Loader. 

Recent Business and Financial Updates

• Financial Performance for Fiscal Q1 2025: Aehr Test Systems (NASDAQ: AEHR), a global provider of semiconductor test and burn-in equipment, reported its financial results for the first quarter of fiscal 2025, which ended on August 30, 2024. The company recorded net revenue of USD 13.1 million, a decrease from USD 20.6 million in the first quarter of fiscal 2024. GAAP net income for the quarter stood at USD 0.7 million, or USD 0.02 per diluted share, compared to USD 4.7 million, or USD 0.16 per diluted share, in the previous year. Non-GAAP net income, which excludes certain expenses, was USD 2.2 million, or USD 0.07 per diluted share, down from USD 5.2 million, or USD 0.18 per diluted share, in fiscal Q1 2024. Total bookings for the quarter were USD 16.8 million, and backlog amounted to USD 16.6 million as of August 30, 2024. The company ended the quarter with USD 40.8 million in cash and equivalents, reflecting a decrease due to the USD 10.6 million cash acquisition of Incal Technology, Inc.
• Strategic Insights and Market Position: Gayn Erickson, President and CEO of Aehr Test Systems, emphasized the strong start to fiscal 2025, with both revenue and non-GAAP net income exceeding consensus expectations. Aehr's silicon carbide (SiC) wafer-level burn-in test systems and full wafer contactors remain critical revenue drivers, and the company anticipates substantial bookings from additional markets, including AI processors, gallium nitride (GaN) power semiconductors, hard disk drive components, and flash memory. Erickson noted stabilization within the SiC market, driven by the electric vehicle (EV) sector's shift to SiC technology, which offers improved power efficiency and cost-effectiveness. This transition is creating demand for wafer-level burn-in testing, a field where Aehr has established itself as a cost-effective leader.
• Expansion into Gallium Nitride and AI Markets: Aehr is advancing its engagement with the GaN semiconductor market, particularly for high-power devices. The company has initiated discussions with a GaN semiconductor client for volume production testing and anticipates significant market growth, with GaN devices projected to see a compound annual growth rate (CAGR) exceeding 40% through 2029. Additionally, Aehr’s FOXTM solution is under evaluation by an AI accelerator firm for wafer-level burn-in testing of high-power processors. The evaluation, conducted at Aehr's Fremont facility, is progressing positively, potentially leading to the adoption of Aehr’s high-power FOX-XP systems for future AI processor production.
• Incal Technology Acquisition and Data Storage Market Growth: Incal Technology, acquired during the quarter, has been well-received by Aehr’s customers, particularly in the AI sector. The acquisition strengthens Aehr’s market position, with several Incal systems already shipped and plans to integrate Incal’s operations into Aehr’s Fremont facility by fiscal year-end. Aehr also reported growth in the data storage market, with a major client in the hard disk drive sector preparing for a production ramp-up of a new high-volume data storage device, expected to drive demand for Aehr's FOX-CP systems and WaferPak Contactors in the latter half of the fiscal year.
• Fiscal 2025 Guidance: Aehr Test Systems has reaffirmed its fiscal 2025 guidance, projecting total revenue of at least USD 70 million and pre-tax net profit of at least 10% of revenue. The company expressed optimism for the year, underpinned by its diverse customer engagements, expanding market opportunities, and strategic acquisitions, positioning Aehr for continued growth and profitability.

Technical Observation (on the daily chart):

The Relative Strength Index (RSI) over a 14-day period stands at a value of 38.55, currently downward trending correcting towards oversold zone, with expectations of a consolidation or an upward momentum if USD 11.50-USD 12.00 support range holds. Additionally, the stock's current positioning is below both the 50-period SMA and 200-period SMA, which may serve as dynamic short to medium-term resistance levels.  

As per the above-mentioned price action, recent key business and financial updates, momentum in the stock over the last month, and technical indicators analysis, a ‘WATCH’ rating has been given for Aehr Test Systems, Inc. (NASDAQ: AEHR) at the closing market price of USD 12.02 as of November 07, 2024. 

Individuals can evaluate the stock based on the support and resistance levels provided in the report in case of keen interest taking into consideration the risk-reward scenario. 

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing.

Related Risk: This report may be looked at from a high-risk perspective and a recommendation is provided for a short duration. This report is solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc. 

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance level is November 07, 2024. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: Target Price refers to a price level that the stock is expected to reach as per the relative valuation method and or technical analysis taking into consideration both short-term and long-term scenarios.

Note 5: ‘Kalkine reports are prepared based on the stock prices captured either from the New York Stock Exchange (NYSE), NASDAQ Capital Markets (NASDAQ), and or REFINITIV. Typically, all sources (NYSE, NASDAQ, or REFINITIV) may reflect stock prices with a delay which could be a lag of 15-20 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice.