Aehr Test Systems Inc. (AEHR) Post Earning Analysis
Aehr Test Systems, founded by Rhea J. Posedel in 1977 and headquartered in Fremont, California, specializes in developing, manufacturing, and marketing test and burn-in equipment for the semiconductor industry. Its product lineup includes the FOX series of wafer contact parallel test and burn-in systems, WaferPak contactors, DiePak carriers, and various loading and alignment fixtures.
Aehr Test Systems (AEHR) experienced a significant drop in stock price recently, as highlighted in a Motley Fool article dated October 7, 2025. This decline followed the company’s fiscal 2026 first-quarter financial results, which were reported on October 6, 2025. Despite reporting strong activity in AI and data center-related semiconductor tests and burn-in sectors, indicating a robust multi-year market opportunity, the stock still faced a downturn.
Further insights into AEHR’s financial health were provided in a GuruFocus.com article, which detailed the company’s Q1 2026 earnings call. The call highlighted challenges in revenue, which could be a contributing factor to the stock’s recent performance. Additionally, a Barrons.com article listed Aehr Test Systems among stocks that moved significantly on the same day, suggesting a volatile trading session possibly influenced by these earnings revelations.
This series of reports indicates that while AEHR is positioned in growing technological sectors, immediate financial hurdles and market reactions could impact its short-term stock performance, affecting investor sentiment and stock value.
The current price of $24.86 reflects a significant daily drop of 20.13%, positioning the stock below its recent week high of $32.55 and much closer to its week low of $22.92. This sharp decline is part of a broader trend where the price has fallen 27.63% from the 52-week and YTD high of $34.35, yet it remains substantially above the 52-week and YTD low of $6.27, showing a dramatic increase of 296.49% from these lows.
The moving averages indicate mixed signals; the price is 16.95% below the 20-day MA, suggesting short-term bearish sentiment, but it is above the 50-day and 200-day MAs by 1.38% and 69.73%, respectively, indicating longer-term bullish trends.
Technical indicators such as the RSI at 41.25 suggest the stock is neither overbought nor oversold, leaning towards a neutral market sentiment. The MACD of 1.49, however, indicates a positive momentum despite today’s large drop. Overall, the stock shows volatility with a significant year-to-date increase but recent short-term declines.
Price Chart
In the first quarter of fiscal 2026, Aehr Test Systems reported a net revenue of $11.0 million, marking a significant decrease of 15.9% from the previous year’s $13.1 million. The company experienced a shift in its financial standing, recording a GAAP net loss of $2.1 million, or $0.07 per diluted share, a stark contrast to the net income of $0.7 million, or $0.02 per diluted share, reported in Q1 of fiscal 2025. Non-GAAP net income also plummeted by 90.9% to $0.2 million, or $0.01 per diluted share.
Despite the downturn in profitability, Aehr Test Systems highlighted robust activities in AI and data center-related semiconductor testing, which are anticipated to drive multi-year market opportunities. The company has successfully delivered innovative products, including the world’s first production wafer level burn-in systems for AI processors, and has received positive customer feedback on upgrades to its Sonoma system.
Bookings for the quarter stood at $11.4 million with a backlog of $15.5 million, and an effective backlog of $17.5 million. The company’s total cash position was reported at $24.7 million, slightly lower than the $26.5 million recorded at the end of the previous quarter. No dividends were declared, and the company spent $328,000 on share repurchases. Despite current challenges, including ongoing tariff issues, management remains optimistic about future growth in both existing and emerging markets.
Earnings Trend Table
| Date | Estimate EPS | Reported EPS | Surprise % | |
|---|---|---|---|---|
| 0 | 2025-10-06 | 0.01 | 0.01 | 0.00 |
| 1 | 2025-04-08 | 0.04 | 0.07 | 75.00 |
| 2 | 2025-01-13 | 0.04 | 0.02 | -42.86 |
| 3 | 2024-10-10 | 0.02 | 0.07 | 250.00 |
| 4 | 2024-07-19 | 0.11 | 0.84 | 700.00 |
| 5 | 2024-04-09 | -0.04 | -0.03 | 14.29 |
| 6 | 2024-01-09 | 0.19 | 0.23 | 21.05 |
| 7 | 2023-10-05 | 0.16 | 0.18 | 12.50 |
The EPS trends over the last eight quarters show notable fluctuations in both performance against estimates and the actual earnings per share (EPS) outcomes. Starting from the most recent quarter (Q3 2025), the company met its EPS estimate precisely, indicating a stabilization in earnings expectations. However, the preceding quarters reveal significant variance.
In Q2 2025 and Q4 2024, the company significantly exceeded EPS estimates by 75% and 250% respectively, suggesting unexpected positive outcomes that could be attributed to operational efficiencies or one-off gains. Conversely, Q1 2025 saw a substantial shortfall in EPS, underperforming the estimate by 42.86%, which could indicate operational challenges or unexpected expenses.
The most striking quarter was Q3 2024, where the reported EPS was 700% above the estimate. This outlier suggests an extraordinary event or gain during that period, which drastically enhanced earnings. The preceding quarters (Q2 2024 and Q1 2024) show modest overperformance relative to estimates, indicating more stable operations during these periods.
In summary, while there are instances of significant overperformance, particularly in Q3 and Q4 of 2024, the overall trend suggests variability in the company’s ability to meet EPS expectations. This variability could be a concern for investors looking for consistent performance, although the high surprise percentages in certain quarters might also indicate potential for unexpected upside.
The most recent ratings changes for the company in question reflect a mix of upgrades and downgrades by two different financial firms, Craig Hallum and William Blair.
- Craig Hallum – Upgrade (2024-07-17): On July 17, 2024, Craig Hallum upgraded their rating from “Hold” to “Buy” while significantly increasing the target price from $12 to $25. This substantial revision suggests a strong confidence in the company’s improved performance or future prospects, potentially due to new developments or earnings results that exceeded expectations.
- Craig Hallum – Downgrade (2024-03-26): Just a few months prior, on March 26, 2024, Craig Hallum downgraded their rating from “Buy” to “Hold” and set the target price at $12. This indicates a shift to a more neutral stance, possibly due to the firm reassessing the company’s growth potential or facing unforeseen challenges that could impact its financial health or market position.
- William Blair – Downgrade (2024-03-25): One day before Craig Hallum’s downgrade, William Blair also revised their outlook by downgrading from “Outperform” to “Market Perform.” This change suggests a realignment of expectations towards the company, aligning its anticipated performance more closely with the broader market, rather than continuing to outperform.
- William Blair – Initiation (2022-10-17): Initially, on October 17, 2022, William Blair had a positive outlook on the company, initiating coverage with an “Outperform” rating. This initial optimism might have been based on favorable market conditions, innovative product lines, or strong financial metrics at the time.
Overall, these rating changes highlight a fluctuating perception of the company’s valuation and performance prospects within a relatively short timeframe, reflecting the dynamic nature of market assessments and the impact of new information on financial forecasts.
The current price of the stock is $24.86, which recently aligns closely with the updated target price set by Craig Hallum at $25, following their upgrade from “Hold” to “Buy” on July 17, 2024. This adjustment reflects a significant positive reassessment from their previous target and rating downgrade in March 2024, when the price target was $12 and the rating was lowered to “Hold.” This recent upgrade suggests a potential stabilization or improvement in the stock’s outlook.
Additionally, the downgrade by William Blair on March 25, 2024, from “Outperform” to “Market Perform” indicates a shift in expectation, potentially due to evolving market conditions or company fundamentals not detailed in the provided data. The sequence of these ratings changes suggests a volatile assessment period for the stock over the past two years, with analysts adjusting their expectations based on new information and market trends.
Disclaimer: The information provided here is for educational and informational purposes only and should not be interpreted as financial advice, investment recommendations, or trading guidance. Markets involve risk, and past performance is not indicative of future results. You should always conduct your own research and consult with a qualified financial advisor before making any investment decisions. By acting, you accept full responsibility for your choices.
