Head-To-Head Analysis: EXFO (EXFO) and Aehr Test Systems (AEHR)

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

Valuation & Earnings

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This table compares Aehr Test Systems and EXFO’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Aehr Test Systems $18.90 million 2.64 -$5.65 million ($0.29) -7.90
EXFO $243.30 million 0.91 $850,000.00 $0.21 19.29

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

Analyst Ratings

This is a breakdown of current recommendations for Aehr Test Systems and EXFO, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Aehr Test Systems 0 0 0 0 N/A
EXFO 0 4 1 0 2.20

EXFO has a consensus target price of $5.35, indicating a potential upside of 32.10%. Given EXFO’s higher probable upside, analysts plainly believe EXFO is more favorable than Aehr Test Systems.

Volatility and Risk

Aehr Test Systems has a beta of 0.79, indicating that its stock price is 21% less volatile than the S&P 500. Comparatively, EXFO has a beta of 0.6, indicating that its stock price is 40% less volatile than the S&P 500.

Profitability

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

Net Margins Return on Equity Return on Assets
Aehr Test Systems -1.58% -1.44% -0.80%
EXFO 0.09% 5.22% 3.94%

Insider & Institutional Ownership

25.0% of Aehr Test Systems shares are owned by institutional investors. Comparatively, 14.8% of EXFO shares are owned by institutional investors. 21.9% of Aehr Test Systems shares are owned by insiders. Comparatively, 20.0% of EXFO shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Summary

EXFO beats Aehr Test Systems on 8 of the 12 factors compared between the two stocks.

Aehr Test Systems Company Profile

Aehr Test Systems is engaged in the designing, manufacturing and marketing of advanced test and burn-in products to the semiconductor manufacturing industry. The Company manufactures and markets full wafer contact test systems, test during burn-in systems, test fixtures, die carriers and related accessories. The Company’s principal products are the Advanced Burn-In and Test System (ABTS), the FOX full wafer contact parallel test and burn-in systems, WaferPak full wafer contactor, the DiePak carrier and test fixtures. The Company develops, manufactures and sells systems, which are designed to reduce the cost of testing and to perform reliability screening, or burn-in, of complex logic devices, memory integrated circuits (ICs), sensors and optical devices. These systems can be used to perform parallel testing and burn-in of packaged ICs, singulated bare die or ICs still in wafer form.

EXFO Company Profile

EXFO Inc. develops, manufactures, and markets smarter network test, monitoring, and analytics solutions for communications service providers, network equipment manufacturers, and Webscale companies. It offers lab and manufacturing testing systems, including lab platforms; network simulation and load testing tools to meet the mobile telecom and VOIP/IMS network test challenges; transport and datacom solutions, such as Ethernet testing, fiber channel testing, DSn/PDH and SONET/SDH testing, synchronization testing, and SONET/SDH, OTN, and multiservice testing solutions; and optical products comprising power meters, light sources and amplifiers, variable attenuators, switch and utility modules, polarization analysis, optical communication analyzers, spectral testing products, bit-error-rate testing products, optical benchtop kits, osics multifunction platform, optical component testers, and tunable filters. The company also provides field network testing products, including FTB Ecosystem test tools; FTB platforms; test function virtualization solutions; transport and datacom solutions designed to address DSn/PDH and SONET/SDH, carrier Ethernet, testing needs; optical instruments; copper access/triple-play handheld instruments to assess the quality of access network physical layer and performance of multiplay services; mobile broadband tools to meet mobile telecom network test challenges; and wireless network testing solutions. In addition, it offers service assurance platforms, fiber network monitoring and management solutions, and remote network monitoring solutions; and solutions for FTTx access networks and metro/core networks, as well as technical support, instrument, and system services. The company sells products through its direct sales force, sales representatives, and distributors in the United States, Canada, and others. EXFO Inc. was founded in 1985 and is headquartered in Quebec, Canada. EXFO Inc. is a subsidiary of G. Lamonde Investissements Financiers Inc.

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