Value
5.5/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 1.8 |
| P/S | 5.7 |
| EV/EBITDA | 0.0 |
| Fwd P/E | 4.8 |
| PEG | 10.0 |
| Analyst target | 7.5 |
- ▸Forward P/E: 25.8x
- ▸PEG: 0.18
AEIS · Why this verdict
Why Advanced Energy Industries (AEIS) is rated HOLD
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictHOLD
Overall score6.6/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Advanced Energy Industries has delivered four consecutive earnings beats against a 26% revenue growth backdrop with strong momentum, though concentrated customer and supplier exposure, a free cash flow conversion rate below 30%, and a price essentially at the near-term technical target argue for patience before adding to the position.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The company has beaten consensus estimates in all four of the most recent quarters with an average positive surprise of 11.9%, while delivering 26% year-over-year revenue growth — a combination of consistent execution and genuine top-line expansion. Earnings | Revenue growth stays above 15% year-over-year and EPS beats continue in at least 3 of the next 4 quarters. | ↑Improving |
| CounterRevenue growth of 26% reflects an industry upturn; if the semiconductor equipment cycle peaks, growth could decelerate sharply and the beat streak could end even without company-specific missteps. | ||
The top three customers and certain sole-sourced supplier components each represent high-priority concentration risks, meaning a single customer loss or a parts supply disruption could disproportionately impact revenue and production without warning. Bear case | No single customer accounts for more than 25% of revenue and no sole-sourced part creates a material production disruption over the next 12 months. | ↓Deteriorating |
| CounterDeep customer concentration in semiconductor equipment often reflects long qualification cycles and high switching costs that functionally lock in the revenue stream; concentrated can be stickier than it appears. | ||
Price action shows a golden cross formation with the stock above all key moving averages, a rising on-balance volume trend, and strong volume confirmation — the technical setup aligns with the fundamental beat streak. Momentum breakdown | On-balance volume continues to rise and price holds above the 200-day moving average over the next 6 months. | ↑Improving |
| CounterA gap up of 5% flagged as an extreme move may signal near-term exhaustion; strong momentum setups can reverse quickly if earnings disappoint or sector sentiment shifts. | ||
Free cash flow converts at only 26% of net income, flagged as a quality concern — the majority of reported earnings are not yet translating into cash, limiting the company's financial flexibility relative to what the income statement suggests. Quality breakdown | FCF-to-net-income ratio improves above 60% over 2 consecutive reporting periods, reflecting higher-quality earnings. | →Stable |
| CounterFCF conversion below net income during a high-growth phase often reflects working-capital investment and prepaid supply commitments that normalize as growth moderates; Piotroski scores of 9 out of 9 argue the balance sheet remains sound. | ||
The company has beaten consensus estimates in all four of the most recent quarters with an average positive surprise of 11.9%, while delivering 26% year-over-year revenue growth — a combination of consistent execution and genuine top-line expansion.
↑ImprovingEarnings
- Expectation
- Revenue growth stays above 15% year-over-year and EPS beats continue in at least 3 of the next 4 quarters.
CounterRevenue growth of 26% reflects an industry upturn; if the semiconductor equipment cycle peaks, growth could decelerate sharply and the beat streak could end even without company-specific missteps.
The top three customers and certain sole-sourced supplier components each represent high-priority concentration risks, meaning a single customer loss or a parts supply disruption could disproportionately impact revenue and production without warning.
↓DeterioratingBear case
- Expectation
- No single customer accounts for more than 25% of revenue and no sole-sourced part creates a material production disruption over the next 12 months.
CounterDeep customer concentration in semiconductor equipment often reflects long qualification cycles and high switching costs that functionally lock in the revenue stream; concentrated can be stickier than it appears.
Price action shows a golden cross formation with the stock above all key moving averages, a rising on-balance volume trend, and strong volume confirmation — the technical setup aligns with the fundamental beat streak.
↑ImprovingMomentum breakdown
- Expectation
- On-balance volume continues to rise and price holds above the 200-day moving average over the next 6 months.
CounterA gap up of 5% flagged as an extreme move may signal near-term exhaustion; strong momentum setups can reverse quickly if earnings disappoint or sector sentiment shifts.
Free cash flow converts at only 26% of net income, flagged as a quality concern — the majority of reported earnings are not yet translating into cash, limiting the company's financial flexibility relative to what the income statement suggests.
→StableQuality breakdown
- Expectation
- FCF-to-net-income ratio improves above 60% over 2 consecutive reporting periods, reflecting higher-quality earnings.
CounterFCF conversion below net income during a high-growth phase often reflects working-capital investment and prepaid supply commitments that normalize as growth moderates; Piotroski scores of 9 out of 9 argue the balance sheet remains sound.
Per-dimension breakdown
Quality
5.4/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 4.9 |
| ROA | 4.0 |
| Gross margin | 3.8 |
| Op margin | 5.7 |
| Net margin | 5.0 |
| Current ratio | 5.8 |
| FCF quality | 2.1 |
| Moat | 6.9 |
| Piotroski F | 10.0 |
- ▸Earnings quality RED FLAG: 26% FCF/NI
- ▸Strong Piotroski F-Score: 9/9
Growth
9.6/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 9.1 |
| EPS growth | 10.0 |
- ▸Strong growth: 26% YoY
Momentum
5.9/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.5 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 4.0 |
| Volume | 0.0 |
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
8.1/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 7.2 |
| Analyst rating | 8.3 |
| Price target | 9.0 |
- ▸LLM news sentiment: +0.44 (n=5)
- ▸Analyst upside: 36%
Insider
7.3/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 10.0 |
| notable moves | 7.0 |
- ▸Negligible insider selling — $459,480 (0.004% of mkt cap)
- ▸Institutions accumulating
Peer rank
5.2/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 3.0 |
| quality rank | 6.1 |
| growth rank | 6.1 |
Technical
5.6/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 5.0 |
| support resistance | 5.6 |
| 52w position | 5.9 |
| gap | 6.0 |
Risk (lower is worse)
5.0/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 7.4 |
| days to cover | 9.6 |
| volatility | 0.0 |
| put call | 5.9 |
| implied vol | 0.0 |
| max pain risk | 3.0 |
| beta | 6.0 |
| debt equity | 8.0 |
| news risk | 5.0 |
- ▸High IV: 88%
- ▸Above max pain $180
- ▸Concentration risks: 2 HIGH (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
7.0/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 3.5 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 8.5 |
| dividend safety | 6.8 |
| news activity | 8.0 |
- ▸Perfect beat streak: 4Q
- ▸Earnings in 11 days
How the verdict was assembled
Engine trigger
Maintain position. Not compelling to add more.
Engine technical detail
verdict_path:
L4:PATH_F_HOLDPassed (6)
- MOMENTUM:5.9>=5.5
- INSIDER:OK
- NEWS_BOOST:ANALYST:0.80
- NEWS_BOOST:ANALYST_CLUSTER(5)
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:1.2<1.5@spot
Warning (2)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
- EARNINGS_PROXIMITY:11d<=14d (soft)
Reward-to-Risk
1.22
Upside
+18.4%
Downside
15.0%
Sizing output
AVOID
SetupRange Bound — RSI 52 mid-range, Bollinger mid-band
EdgeCatalyst-Driven — Earnings in 11d with 4/4 beat streak
SuitabilityModerate — Balanced profile
Investment implication
None of the engine's positive-conviction paths (C-quality, D-momentum) triggered — the F-path HOLD reflects balanced signals. Strongest-cleared gate: MOMENTUM:5.9>=5.5. Top dim: Growth at 9.6; weakest: Risk (lower is worse) at 5.0. No conviction either direction.
The strongest dimensions are Growth at 9.6, Sentiment at 8.1, and Insider at 7.3; the weakest are Risk (lower is worse) at 5.0, Peer rank at 5.2, and Quality at 5.4. The V9 engine flagged 1 failed gate with 2 warnings, producing an asymmetric reward-to-risk of 1.22 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Earnings Execution And Growth
Trip ifRevenue growth falls below 15% year-over-year for 2 consecutive quarters.
- P2Customer Supplier Concentration
Trip ifA single customer exceeds 25% of total revenue in any reported period.
- P3Strong Price Momentum
Trip ifPrice closes below the 200-day moving average for more than 10 consecutive trading sessions.
- P4Free Cash Flow Quality Shortfall
Trip ifFCF-to-net-income ratio rises above 60% for 2 consecutive reporting periods.