Aehr Test Systems Shares Drop as EV Market Slowdown Dents Revenue Forecast

Summary

  • Aehr Test Systems (NASDAQ:) saw a decrease in shares following an announced decrease in annual revenue expectations.
  • Slow growth in the electric vehicle market is cited as the cause, impacting customer orders and likely affecting the 2024 fiscal year revenue.
  • In contrast, the company’s fiscal second quarter saw a 45% increase in net revenue and a near 50% increase in adjusted net income.
  • Aehr remains optimistic, believing its business has ‘tremendous opportunity’ in the future.

Downturn in Aehr Test Systems Shares

Shares of Aehr Test Systems (NASDAQ:) witnessed a dip in the early New York trading on Wednesday following an announcement of lowered annual revenue prospects.

Reason Behind Decreased Revenue Expectations

The Fremont-based firm released a statement on Tuesday attributing the decrease in conservative revenue forecasts to a decelerated growth in the electric vehicle market over the past two months. This sluggishness has affected the timing of many current and upcoming client orders, negatively impacting revenue.

Impact on 2024 Fiscal Year Revenue

Aehr, listed on Nasdaq, forecasts these order delays may potentially cause a drop in the revenue for the fiscal year 2024.

CEO Statement

“Owing to the changing forecasts from our clientele and the unpredictability of their order timing, we believe adopting a more prudent approach towards our fiscal year forecast is sensible,” Chief Executive Gayn Erickson expressed in the statement.

Despite this, the company saw a leap in net revenue for its fiscal second quarter, up by 45% to $21.4M compared to the previous year. This bump pushed the adjusted net income to a nearly 50% increase, topping at $6.7M. Erickson indicated that the company foresees vast opportunities down the line.

Final Thoughts

Erickson highlighted the importance of wafer level burn-in for their product plans and expects to address growing markets. This development in the technology sector and its impact on Aehr’s financials are worth attention in forex trading, particularly for those focusing on assets linked to tech companies and electronic vehicle manufacturers.

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