Is AEHR a high-quality business?

AlphaMadera's AlphaQuality grade scores Aehr Test Systems on six pillars — profitability, capital efficiency, balance-sheet strength, growth durability, cash generation, and shareholder yield. The composite letter grade reflects how AEHR compares to a Buffett-style quality bar.

What is Aehr Test Systems's AlphaQuality grade?

AlphaQuality assigns a letter grade (A through F) to AEHR based on a six-pillar quantitative model. The live page shows the composite grade plus each pillar's individual score with the underlying metrics.

What makes AEHR a quality stock?

AlphaQuality looks at return on capital, free-cash-flow margins, debt-to-equity, revenue stability, dividend and buyback policy, and operating-margin trend. Stocks scoring well across all six pillars earn higher grades — the methodology favors compounders over cyclicals.

AEHR - Aehr Test Systems

Price: -- -- | CONSENSUS: Hold DETAILS | PRICE TARGET: $62.00 DETAILS

AlphaQuality

Quantitative six-pillar business-quality grade

Cyclical & Capital-Intensive

AlphaQuality — archetype-weighted quantitative grade

D+ 41.9 / 100 composite

Composite Grade

Composite of six pillars weighted for cyclical & capital-intensive businesses. Purely quantitative — no stock price or analyst input.

Profitability

Weight: 15%

C- 49.5

5yr Avg ROIC 3.6% 28/100
Operating Margin Trend +3.56 pp/yr 100/100

Capital Efficiency

Weight: 15%

D 33.6

5yr Avg ROE 8.3% 52/100
5yr Share-Count CAGR 6.0% 0/100

Growth Quality

Weight: 10%

A 92.0

5yr Revenue CAGR 37.3% 100/100
5yr EPS CAGR 81.5% 100/100
Revenue-Growth Years (5) 3/5 60/100

Cash Generation

Weight: 15%

F 12.9

5yr FCF Margin -4.3% 3/100
5yr FCF/NI Conversion 0.25x 25/100

Balance Sheet

Weight: 25%

C 55.0

Net Debt / EBITDA 10.00x 0/100
Interest Coverage (EBIT/Int) 30.00x 100/100
Altman Z-Score 98.58 100/100

Stability

Weight: 20%

F 22.9

EPS Volatility (σ/μ) 0.93 3/100
Piotroski F-Score 2 22/100
Negative-Revenue Years (5) 2/5 60/100

3 of 3 gurus held; 3 added.

Holders: 3 +1
Avg Δ position: +184.9%
New buys: 0
Full exits: 0

Cooperman increased +312%
Wood increased +58%
Dalio increased

How this is calculated

AlphaQuality grades six pillars from 0-100 and weights each by archetype:

Profitability (15%) — 5yr Avg ROIC, Operating Margin Trend
Capital Efficiency (15%) — 5yr Avg ROE, 5yr Share-Count CAGR
Growth Quality (10%) — 5yr Revenue CAGR, 5yr EPS CAGR, Revenue-Growth Years (5)
Cash Generation (15%) — 5yr FCF Margin, 5yr FCF/NI Conversion
Balance Sheet (25%) — Net Debt / EBITDA, Interest Coverage (EBIT/Int), Altman Z-Score
Stability (20%) — EPS Volatility (σ/μ), Piotroski F-Score, Negative-Revenue Years (5)

We deliberately ignore stock price, analyst targets, and consensus ratings so the grade is suitable for backtesting forward returns. A minimum of 5 fiscal years of audited statements is required; distressed and highly leveraged infrastructure businesses are declared ungradable rather than forced into a numeric score.