Craig-Hallum upgraded Aehr Test Systems to Buy from Hold with a price target of $25, up from $12.
In a report released today, Christian Schwab from Craig-Hallum upgraded Aehr Test Systems ( AEHR – Research Report) to a Buy, with a price target of $25.00.
Christian Schwab has given his Buy rating due to a combination of factors including Aehr Test Systems’ diversifying revenue streams and the long-term growth outlook for Silicon Carbide (SiC). While SiC growth may face short-term challenges, it is expected to pick up momentum from 2025 onwards, with the industry projected to expand significantly. Furthermore, Aehr Test Systems is not solely reliant on SiC, as it has been branching out into other areas, such as working with AI accelerator companies, hard-disk drive manufacturers, and Gallium Nitride (GaN) customers, which could account for a substantial portion of this fiscal year’s revenue.
Additionally, the acquisition of Incal Technology is poised to bolster the company’s revenue, with expected contributions already factored into their financial guidance. This acquisition aligns with Aehr’s strategic expansion and is anticipated to close within 60 days. Schwab’s confidence is reflected in the raised price target of $25, grounded on a 30x multiple of the fiscal year 2026 EPS estimate. The forecast for the company’s revenue in FY25 to exceed $70 million, inclusive of gains from Incal and other diversified sources, further underpins the optimistic stance, indicating a robust revenue base beyond just the core SiC segment.
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Aehr Test Systems (AEHR) Company Description:
Aehr Test Systems engages in the design, manufacture, and marketing of test and burn-in products to the semiconductor manufacturing industry. Its products include wafer contact test systems, test during burn-in systems, test fixtures, and die carriers. The company was founded by Rhea J. Posedel on May 25, 1977 and is headquartered in Fremont, CA.
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