Over the past three years, people who bought AEHR stock early have made a lot of money. AEHR was only worth $2.29 a share on January 29, 2021. In the following year, January 29, 2024, shares finished at $15.76, a rise of 588%.
So what caused this rapid rise in just 3 years? Why would you have put $10,000 into AEHR in January 2021? How much is that stake worth now? Let’s learn more about this tech stock that’s going up so fast.
The Business Behind the Stock
The semiconductor business can get testing tools and services from AEHR Test Systems. Before being sent off to be put together, their systems test and “burn in” semiconductor devices. This step is very important for finding problems quickly and making sure the system is reliable.
As 5G went live, electric car production sped up, and data centers grew in 2021, semiconductor sales took off. As a result, AEHR saw more demand for its testing platforms. Because its clients were making more chips, AEHR’s tools were needed more often.
Also, because electronic devices are so complicated these days, they need to be tested more thoroughly. AEHR’s high-performance tools are made to meet the needs of chips on the cutting edge. The improved testing tools gave them a big edge over their competitors.
Riding the Chip Boom
It turned out that 2021 was the start of a huge upturn in the semiconductor business. As people started to get better after the covid-19 pandemic, they wanted tech more than ever, which led to a big rise in chip orders.
Supply lines were messed up, which caused shortages and made demand even higher. The semiconductor business as a whole saw huge increases in sales and profits over the next three years.
When AEHR’s users were at full capacity, its sales and profit margins grew a lot. This company made three times as much money in three years, from $22 million to over $68 million.
AEHR Stock Income Statement of Last 3 Years (Annual)
| Year | 2023 | 2022 | 2021 |
|---|---|---|---|
| Revenue | 64.96 | 50.83 | 16.6 |
| Revenue Growth (YoY) | 27.80% | 206.20% | -25.53% |
| Cost of Revenue | 32.22 | 27.16 | 10.57 |
| Gross Profit | 32.75 | 23.67 | 6.03 |
| Selling, General & Admin | 12.24 | 10.05 | 6.56 |
| Research & Development | 7.13 | 5.82 | 3.65 |
| Other Operating Expenses | 0 | 0 | 0 |
| Operating Expenses | 19.37 | 15.87 | 10.21 |
| Operating Income | 13.38 | 7.8 | -4.18 |
| Interest Expense / Income | -1.25 | -0.01 | 0.05 |
| Other Expense / Income | 0 | -1.73 | -2.02 |
| Pretax Income | 14.62 | 9.54 | -2.2 |
| Income Tax | 0.06 | 0.09 | -0.18 |
| Net Income | 14.56 | 9.45 | -2.03 |
| Net Income Growth | 54.04% | – | – |
| Shares Outstanding (Basic) | 28 | 26 | 23 |
| Shares Outstanding (Diluted) | 29 | 28 | 23 |
| Shares Change | 5.19% | 18.40% | 2.51% |
| EPS (Basic) | 0.52 | 0.36 | -0.09 |
| EPS (Diluted) | 0.50 | 0.34 | -0.09 |
| EPS Growth | 47.06% | – | – |
| Free Cash Flow | 8.65 | 1.09 | -2.93 |
| Free Cash Flow Per Share | 0.31 | 0.04 | -0.13 |
| Gross Margin | 50.41% | 46.56% | 36.34% |
| Operating Margin | 20.59% | 15.35% | -25.19% |
| Profit Margin | 22.41% | 18.59% | -12.21% |
| Free Cash Flow Margin | 13.31% | 2.15% | -17.64% |
| Effective Tax Rate | 0.41% | 0.95% | – |
| EBITDA | 13.91 | 9.84 | -1.85 |
| EBITDA Margin | 21.41% | 19.35% | -11.13% |
| Depreciation & Amortization | 0.54 | 0.31 | 0.31 |
| EBIT | 13.37 | 9.53 | -2.16 |
| EBIT Margin | 20.58% | 18.75% | -13.00% |
From $-2 million to $14.5 million, its net income went up 10 times. As AEHR’s finances got better, it was able to pay off its loans, put money into research and development, and fund more growth.
When AEHR did well, Wall Street took notice. Institutional buyers bought the stock because the fundamentals were getting stronger and it had a lot of room to grow.
AEHR stock probably also gained from people being interested in the themes in semiconductor names while the chip boom was going on. AEHR went up over 600% from January 2021 to the beginning of 2024, as momentum slowly built.
What $10,000 Invested in AEHR Would Be Worth Today
AEHR stock closed at $2.29 on January 29, 2021. If someone had put $10,000 into AEHR stock at that time, they could have bought 4,366 shares.
Now, on January 29, 2024, shares are worth $15.76, so the same stake would be worth $68,790, which is a 588% gain if dividends are not taken into account. Any owner would be thrilled to see their $10,000 investment pay off with over $68,000 in profits.
The Run May Not Be Over
There is reason to think that AEHR stock could keep making huge gains even though it has already seen a lot of them. Thanks to tech trends like AI, cloud computing, and the Internet of Things, the semiconductor market is projected to keep growing over the next ten years.
As chipmakers make more chips, AEHR should see a lot of demand for its specialized testing tools.
The business could also get more customers in other countries, especially in countries like China that are growing quickly. Its new FOX-XP test and burn-in system was made to handle the increasing complexity of cutting-edge chips, and it should help the company make even more sales.
AEHR still seems to have room to grow for investors who are ready to wait. The company’s finances are strong, and demand for semiconductors is still going up.
Of course, after such a long run of good luck, values have also gone up a lot. Investors may not get as big of gains in the future as they did when they bought in at $2 three years ago. It’s always risky to buy stocks after big runs up.
Still, for people who are thinking about buying AEHR stock right now, the last three years are a great example of how profitable it can be to find a growing company that is just getting started.
Early investors in AEHR have done very well over the past few years, thanks to a booming business.