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NEW YORK (TheStreet) -- Aehr Test Systems (AEHR) - Get Report has been downgraded by TheStreet Ratings from Hold to Sell with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:
"We rate AEHR TEST SYSTEMS (AEHR) a SELL. This is driven by several weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income and generally disappointing historical performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Semiconductors & Semiconductor Equipment industry. The net income has significantly decreased by 446.4% when compared to the same quarter one year ago, falling from -$0.17 million to -$0.91 million.
- The share price of AEHR TEST SYSTEMS has not done very well: it is down 6.00% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Semiconductors & Semiconductor Equipment industry and the overall market, AEHR TEST SYSTEMS's return on equity significantly trails that of both the industry average and the S&P 500.
- 45.25% is the gross profit margin for AEHR TEST SYSTEMS which we consider to be strong. Regardless of AEHR's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, AEHR's net profit margin of -25.49% significantly underperformed when compared to the industry average.
- AEHR TEST SYSTEMS has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has not demonstrated a clear trend in earnings over the past 2 years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, AEHR TEST SYSTEMS turned its bottom line around by earning $0.03 versus -$0.36 in the prior year.
- You can view the full analysis from the report here: AEHR Ratings Report