AXT (NASDAQ:AXTI – Get Free Report) and Aehr Test Systems (NASDAQ:AEHR – Get Free Report) are both mid-cap technology companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, valuation, dividends, institutional ownership, earnings, risk and analyst recommendations.
Institutional & Insider Ownership
49.5% of AXT shares are owned by institutional investors. Comparatively, 69.7% of Aehr Test Systems shares are owned by institutional investors. 6.0% of AXT shares are owned by insiders. Comparatively, 4.6% of Aehr Test Systems shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
Profitability
This table compares AXT and Aehr Test Systems’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| AXT | 3.23% | 0.96% | 0.70% |
| Aehr Test Systems | -14.25% | -3.83% | -3.36% |
Analyst Ratings
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| AXT | 1 | 1 | 3 | 1 | 2.67 |
| Aehr Test Systems | 1 | 1 | 5 | 1 | 2.75 |
AXT presently has a consensus target price of $77.00, suggesting a potential upside of 13.68%. Aehr Test Systems has a consensus target price of $132.50, suggesting a potential upside of 46.01%. Given Aehr Test Systems’ stronger consensus rating and higher probable upside, analysts plainly believe Aehr Test Systems is more favorable than AXT.
Earnings and Valuation
This table compares AXT and Aehr Test Systems”s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| AXT | $88.33 million | 50.28 | -$21.26 million | $0.02 | 3,386.70 |
| Aehr Test Systems | $50.00 million | 59.28 | -$7.13 million | ($0.24) | -378.12 |
Aehr Test Systems has lower revenue, but higher earnings than AXT. Aehr Test Systems is trading at a lower price-to-earnings ratio than AXT, indicating that it is currently the more affordable of the two stocks.
Volatility and Risk
AXT has a beta of 1.92, suggesting that its share price is 92% 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.
About AXT
AXT, Inc. designs, develops, manufactures, and distributes compound and single element semiconductor substrates. The company offers indium phosphide for use in data center connectivity using light/lasers, high-speed data transfer in data centers, 5G communications, fiber optic lasers and detectors, consumer devices, passive optical networks, silicon photonics, photonic integrated circuits, thermo-photovoltaics, RF amplifier and switching, infrared light-emitting diode (LEDS) motion control, lidar for robotics and autonomous vehicles, and infrared thermal imaging. It also provides semi-insulating gallium arsenide (GaAs) substrates for use in Wi-Fi and IoT devices, transistors, direct broadcast television, power amplifiers, satellite communications, and solar cells; and semi-conducting GaAs substrates that are used in LEDs, screen displays using micro-LEDs, printer head lasers and LEDs, 3-D sensing using VCSELs, data center communication using VCSELs, sensors for industrial robotics/near-infrared sensors, optical couplers, solar cells, night vision goggles, lidar for robotics and autonomous vehicles, and other lasers, as well as laser machining, cutting, and drilling. In addition, the company offers germanium substrates for use in multi-junction solar cells for satellites, optical sensors and detectors, terrestrial concentrated photo voltaic cells, infrared detectors, and carrier wafer for LED. Further, it provides 6N+ and 7N+ purified gallium, boron trioxide, gallium-magnesium alloy, pyrolytic boron nitride (pBN) crucibles, and pBN insulating parts. It sells its products through direct salesforce in the United States, China, and Europe, as well as through independent sales representatives and distributors in Japan, Taiwan, Korea, and internationally. The company was formerly known as American Xtal Technology, Inc. and changed its name to AXT, Inc. in July 2000. AXT, Inc. was incorporated in 1986 and is headquartered in Fremont, California.
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.
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