Aehr Test Systems Stock Up 1,212% YOY & Could Still Double

Aehr Test Systems Reports Record Results & Raises Guidance

The main stock market indices may be near record highs, but September and October haven’t been kind to technology stocks. There’s one big exception, however: Aehr Test Systems (NASDAQ:AEHR).

Since the start of September, the S&P 500 has dropped by three percent and the Nasdaq has tumbled by 4.5%. Over the same time frame, AEHR stock has skyrocketed by 148%.

Stocks don’t rip higher like that for no reason.

In July, the company announced that, during its fourth fiscal quarter of 2021 (ended May 31), its revenue returned to pre-pandemic levels. In September, the company announced record bookings for the first quarter of fiscal 2022 and raised its annual revenue guidance.

In early October, the company’s share price got an additional boost after management announced that the company had successfully completed its previously announced at-the-market (ATM) offering.

As of this writing, Aehr Test Systems stock is up by:

• 108% over the last month
• 686% over the last three months
• 600% over the last six months
• 636% year-to-date
• 1221% year-over-year

Massive gains, indeed.

Chances are, AEHR stock will give up some short-term ground to some well-deserved profit-taking, but that doesn’t mean it’s going to take a breather. Wall Street sees Aehr Test Systems stock’s price hitting $31.00 over the next 12 months, which represents upside of 66%.

That projection could be a little conservative. A 12-month share-price target of $38.10 seems more than attainable. At the current price of AEHR stock, that points to possible gains of 100%.

Chart courtesy of StockCharts.com

AEHR Stock Overview

If you want it tested, Aehr Test Systems will come. The company designs, engineers, manufactures, and sells burn-in testing equipment and a wafer-level burn-in platform. (Source: “Investor Presentation,” Aehr Test Systems, last accessed October 12, 2021.)

Aehr’s applications include silicon photonics, silicon carbide, 2D sensing, and 3D sensing. The company serves the automotive and industrial sectors (among others).

Aehr Test Systems has the ability to rapidly scale up its manufacturing production. Moreover, the company is in discussions with memory suppliers regarding a next-generation testing system.

The company’s worldwide customer base includes Lumentun Holdings Inc (NASDAQ:LITE), Seagate Technology Holdings PLC (NASDAQ:STX), Texas Instruments Incorporated (NYSE:TXN), and the U.S. Department of Defense.

$25-Million Offering

On October 7, Aehr announced that it had successfully completed its previously announced $25.0-million ATM offering. (Source: “Aehr Test Systems Announces Completion of $25 Million ATM Offering,” Aehr Test Systems, October 7, 2021.)

A total of 1.7 million shares were sold at an average price of $14.73 per share, for gross proceeds of $25.0 million and net proceeds of $24.0 million.

Management says the proceeds will provide the company with additional capital to serve the very large market opportunities ahead, which include test and burn-in of silicon carbide devices for electric vehicles, electrification infrastructure, silicon photonics devices for data center and 5G infrastructure, and 2D/3D sensors for mobile and wearable devices. 

Record Q1 Bookings & Increased 2022 Guidance

In September, Aehr announced that its revenue for the first quarter of fiscal 2022 (ended August 31, 2021) increased by 181% year-over-year to $5.6 million. (Source: “Aehr Test Systems Reports Record Bookings in First Quarter of Fiscal 2022,” Aehr Test Systems, September 23, 2021.)

The company’s net income soared by 550% to $696,000, or $0.03 per share, from $107,000, or breakeven per share, in the first quarter of fiscal 2021. The company also reported an adjusted net loss of $414,000, or $0.02 per share, versus an adjusted net loss of $2.0 million, or $0.09 per share, in the same prior-year period.

Aehr Test Systems’ backlog as of August 31 stood at $16.6 million, up from $1.6 million as of May 31. The effective backlog, which includes all orders announced since the end of the first quarter, is over $36.0 million.

Gayn Erickson, president and CEO, commented, “We are off to a strong start for fiscal 2022, finishing the first quarter with record bookings for a single quarter of $20.7 million.” (Source: Ibid.)

He continued, “Since the end of the quarter, we have announced an additional $19.4 million in bookings, bringing our total bookings for the fiscal year to over $40 million as of today’s date.”

For fiscal 2022 (ending May 31, 2022), Aehr Test Systems raised its previous guidance for full-year total revenue by approximately 80% to at least $50.0 million, which is more than three times the company’s previous fiscal year’s revenue.

Aehr expects to be profitable for the fiscal year at these revenue levels.

Analyst Take

There’s a lot to love about Aehr Test Systems stock. The company reported great financial results for fiscal 2021, which included revenue that returned to pre-pandemic levels.

That momentum has carried into fiscal 2022 with triple-digit revenue and earnings growth. Aehr raised its full-year guidance again on the strength of semiconductor test and burn-in sales for electric vehicles.