AEHR
Aehr Test Systems
$72.60
Distressed or Transitioning
75%
Current EPS × Depressed Multiple
Strong
·
Conviction
Overvalued
Trading 1855.6% above fair value
You pay
$72.60
Bear
$2.48
Fair
$3.71
Bull
$4.95
Bear
$2.48
-96.6%
EPS continues to decline, 5x multiple
Fair
$3.71
-94.9%
Current EPS stabilizes, 8x multiple
Bull
$4.95
-93.2%
Credible recovery, multiple re-rates to 10x
Key Value Driver
Whether the core business model is intact or structurally impaired
Implied Market Multiple
146.7x
Summary
Stock is 43% below 52-week high. Using current EPS at a 8x depressed multiple, base-case value is $3.71. Wide scenario range: $2.48–$4.95.
Warnings
Don't assume past cash flow levels will return — the company's troubles may have permanently reduced its ability to generate profits.
A stock can look cheap on paper and still lose half its value if the underlying business is permanently damaged.
The wide range between our best and worst cases is intentional — pretending to know a precise value for a troubled company would be misleading.
Key Risks
- Bullish DCF projections are fundamentally unknowable for distressed companies
- M&A speculation can floor the stock above intrinsic value temporarily
- Management credibility is a key input — new CEO expands the bull case