Value
6.4/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 2.5 |
| P/S | 6.6 |
| EV/EBITDA | 0.0 |
| Fwd P/E | 6.9 |
| PEG | 10.0 |
| Analyst target | 9.0 |
- ▸Forward P/E: 18.2x
- ▸PEG: 0.20
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 score6.3/10
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. | ↑Improving |
| 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.
↑ImprovingBear 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
5.7/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 5.4 |
| ROA | 4.2 |
| Gross margin | 4.0 |
| Op margin | 6.8 |
| Net margin | 5.4 |
| Current ratio | 9.2 |
| FCF quality | 1.2 |
| Moat | 6.1 |
| Piotroski F | 8.9 |
- ▸Earnings quality RED FLAG: 16% FCF/NI
- ▸Strong Piotroski F-Score: 8/9
Growth
10.0/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 10.0 |
| EPS growth | 10.0 |
- ▸Strong growth: 30% YoY
Momentum
3.5/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.0 |
| MACD | 0.0 |
| OBV | 10.0 |
| MA position | 2.2 |
| Volume | 2.1 |
- ▸Capitulation risk (RSI 25, below 200MA)
- ▸Volume accumulation (rising OBV)
- ▸Below 200-MA but MA still rising (+5.6%/30d) — pullback in uptrend, not confirmed weakness
Sentiment
8.0/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 8.4 |
| Price target | 9.7 |
| erm sentiment | 5.5 |
- ▸Analyst upside: 61%
Insider
3.9/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 3.7 |
| notable moves | 3.0 |
- ▸Insider selling (low materiality) — $815,705 (0.007% of mkt cap)
Peer rank
4.8/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 2.8 |
| quality rank | 6.1 |
| growth rank | 7.0 |
Technical
7.0/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 8.6 |
| support resistance | 9.9 |
| 52w position | 3.4 |
| gap | 6.0 |
Risk (lower is worse)
4.7/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 7.0 |
| days to cover | 8.3 |
| volatility | 0.0 |
| put call | 3.9 |
| implied vol | 2.7 |
| beta | 5.7 |
| debt equity | 5.3 |
- ▸High IV: 64%
- ▸Concentration risks: 2 HIGH (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
7.3/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 9.6 |
| dividend safety | 6.8 |
- ▸Perfect beat streak: 4Q
How the verdict was assembled
Engine trigger
Maintain position. Not compelling to add more.
Engine technical detail
verdict_path:
L4:PATH_F_HOLDPassed (6)
- ASYMMETRY:3.3>=1.5
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:63d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- MOMENTUM:3.5<4.5
Warning (1)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
3.26
Upside
+39.8%
Downside
12.2%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeNo clear edge — No clear edge identified
SuitabilityAggressive — Beta 1.32>1.3
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: ASYMMETRY:3.3>=1.5. Top dim: Growth at 10.0; weakest: Momentum at 3.5. No conviction either direction.
The strongest dimensions are Growth at 10.0, Sentiment at 8.0, and Catalyst at 7.3; the weakest are Momentum at 3.5, Insider at 3.9, and Risk (lower is worse) at 4.7. The V9 engine flagged 1 failed gate with 1 warning, producing an asymmetric reward-to-risk of 3.26 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.