Aehr Test Systems (AEHR) short, mcap=$685m

AEHR pitch:
– Supplier of semiconductor capital equipment.
– A good short opportunity as the market incorrectly expects the recent growth to continue.
– The growth was mainly driven by a single customer $ON, which is expected to substantially reduce purchases next year.
– Over the last two years AEHR revenues increased 4x and the stock up by 1000%.
– Even assuming substantial growth from new customers, AEHR will be unable to hit the street’s aggressive FY24-FY25 rev estimates.

AEHR valuation:
– Trades at 12x Sales and 50x non-GAAP untaxed EPS on FY23 numbers.
– At a peer average of 4x Sales and 25x EPS on 2025 numbers, would be $15 stock.

Exp. gain: 60%

Full write-up (free guest account required):