Analyzing Aehr Test Systems (NASDAQ:AEHR) and MKS (NASDAQ:MKSI)

MKS (NASDAQ:MKSI) and Aehr Test Systems (NASDAQ:AEHR) are both technology companies, but which is the superior stock? We will contrast the two businesses based on the strength of their earnings, profitability, valuation, risk, dividends, analyst recommendations and institutional ownership.

Profitability

This table compares MKS and Aehr Test Systems’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
MKS	10.15%	24.72%	7.80%
Aehr Test Systems	-14.25%	-3.83%	-3.36%

Insider & Institutional Ownership

99.8% of MKS shares are owned by institutional investors. Comparatively, 69.7% of Aehr Test Systems shares are owned by institutional investors. 0.6% of MKS shares are owned by insiders. Comparatively, 4.6% of Aehr Test Systems shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of current recommendations and price targets for MKS and Aehr Test Systems, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
MKS	1	1	13	1	2.88
Aehr Test Systems	1	1	5	1	2.75

MKS currently has a consensus price target of $375.93, indicating a potential upside of 44.13%. Aehr Test Systems has a consensus price target of $132.50, indicating a potential upside of 26.93%. Given MKS’s stronger consensus rating and higher probable upside, equities analysts plainly believe MKS is more favorable than Aehr Test Systems.

Volatility & Risk

MKS has a beta of 1.98, suggesting that its share price is 98% more volatile than the S&P 500. Comparatively, Aehr Test Systems has a beta of 3.06, suggesting that its share price is 206% more volatile than the S&P 500.

Earnings and Valuation

This table compares MKS and Aehr Test Systems”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
MKS	$3.93 billion	4.49	$295.00 million	$6.27	41.60
Aehr Test Systems	$50.00 million	68.19	-$7.13 million	($0.24)	-434.96

MKS has higher revenue and earnings than Aehr Test Systems. Aehr Test Systems is trading at a lower price-to-earnings ratio than MKS, indicating that it is currently the more affordable of the two stocks.

Summary

MKS beats Aehr Test Systems on 11 of the 14 factors compared between the two stocks.

About MKS

MKS Instruments, Inc. provides foundational technology solutions to semiconductor manufacturing, electronics and packaging, and specialty industrial applications in the United States, Germany, China, South Korea, and internationally. It operates through Vacuum Solutions Division (VSD), Photonics Solutions Division (PSD), and Material Solutions Division (MSD) segments. The VSD segment provides foundational technology solutions, including pressure measurement and control, flow measurement and control, gas and vapor delivery, gas composition analysis, electronic control technology, reactive gas generation and delivery, power generation and delivery, and vacuum technology. The PSD segment offers range of solutions, which include lasers, beam measurement and profiling, precision motion control, vibration isolation systems, photonics instruments, temperature sensing, opto-mechanical components, optical elements, systems for flexible PCB laser processing, and laser-based systems, as well as high density interconnect PCB and package manufacturing. The MSD segment develops, process, and manufactures technologies comprising advanced surface modification, electroless and electrolytic plating, and surface finishing for chemistry, equipment, software, and services markets, as well as high-technology applications. In addition, the company sells its products and services through direct sales, network of independent distributors, and sales representatives, as well as websites, including product catalogs. The company was incorporated in 1961 and is headquartered in Andover, Massachusetts.

About Aehr Test Systems

Aehr Test Systems provides test solutions for testing, burning-in, and semiconductor devices in wafer level, singulated die, and package part form, and installed systems worldwide. Its product portfolio includes FOX-XP and FOX-NP systems that are full wafer contact and singulated die/module test and burn-in systems that can test, burn-in, and stabilize range of devices, including silicon carbide-based and other power semiconductors, 2D and 3D sensors used in mobile phones, tablets and other computing devices, memory semiconductors, processors, microcontrollers, systems-on-a-chip, and photonics and integrated optical devices. The company also offers FOX-CP system, a low-cost single-wafer compact test solution for logic, memory, and photonic devices; FOX WaferPak Contactor, a full wafer contactor capable of testing wafers up to 300mm that enables integrated circuit manufacturers to perform test, burn-in, and stabilization of full wafers on the FOX-P systems. In addition, it provides FOX DiePak Carrier, a reusable temporary package that enables IC manufacturers to perform final test and burn-in of bare die and modules; and FOX DiePak Loader. The company was incorporated in 1977 and is headquartered in Fremont, California.