AEHR
Aehr Test Systems
$84.64
Cyclical & Capital-Intensive
80%
Normalized Earnings × Cycle Multiple
Strong
·
Conviction
Overvalued
Trading 1455.9% above fair value
You pay
$84.64
Bear
$4.08
Fair
$5.44
Bull
$6.80
Bear
$4.08
-95.2%
$0.34 × 12x
Fair
$5.44
-93.6%
$0.34 × 16x
Bull
$6.80
-92.0%
$0.34 × 20x
Adjust Assumptions
16.0x
0.34$
Key Value Driver
Through-cycle normalized EPS ($0.34)
Implied Market Multiple
248.9x
Summary
Using 7-year normalized EPS of $0.34 at a 16x cycle multiple, the base-case value is $5.44 per share. P/TBV cross-check: 13.9x.
Warnings
Price-to-book value of 13.9x is above the normal range for this type of business (0.7x-2.0x). The stock may already price in a strong cycle.
This stock is 43% below its 52-week high, with weak or declining earnings. That combination often signals real trouble, even though the valuation below is based on other fundamentals.
Key Risks
- Standard 10-year DCF produces unreliable terminal values for cyclicals
- 'Cheap' P/E at cycle peak is the most common value trap — normalize first
- Captive finance subsidiaries have different risk profiles from manufacturing