Analyzing Aehr Test Systems (AEHR) & Transcat (TRNS)

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

Earnings & Valuation

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This table compares Aehr Test Systems and Transcat’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Aehr Test Systems $18.90 million 2.90 -$5.65 million ($0.29) -8.62
Transcat $143.90 million 0.83 $4.52 million $0.64 26.19

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

Profitability

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

Net Margins Return on Equity Return on Assets
Aehr Test Systems -1.58% -1.41% -0.80%
Transcat 3.24% 10.03% 4.94%

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, Transcat has a beta of 0.42, indicating that its stock price is 58% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Aehr Test Systems and Transcat, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Aehr Test Systems 0 0 0 0 N/A
Transcat 0 0 3 0 3.00

Transcat has a consensus price target of $20.00, indicating a potential upside of 19.33%. Given Transcat’s higher possible upside, analysts plainly believe Transcat is more favorable than Aehr Test Systems.

Insider & Institutional Ownership

25.0% of Aehr Test Systems shares are owned by institutional investors. Comparatively, 55.2% of Transcat shares are owned by institutional investors. 21.9% of Aehr Test Systems shares are owned by company insiders. Comparatively, 8.8% of Transcat shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Summary

Transcat beats Aehr Test Systems on 10 of the 13 factors compared between the two stocks.

About Aehr Test Systems

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.

About Transcat

Transcat, Inc. provides calibration and laboratory instrument services in the United States, Canada, and internationally. It operates in two segments, Service and Distribution. The Service segment offers calibration, repair, inspection, analytical qualifications, preventative maintenance, consulting, and other related services. This segment also provides CalTrak, a proprietary document and asset management system that is used to integrate and manage the workflow of its calibration service centers and customers' assets; CalTrak Online, which provides its customers with Web-based asset management capability, as well as an off-site archive of calibration and other service records; and Compliance, Control and Cost, a cloud-based customer portal and asset management tool. The Distribution segment distributes approximately 100,000 test, measurement, and control instruments for customers' test and measurement instrumentation needs. This segment markets and sells its products through Website, digital and print advertising, proactive outbound sales, and an inbound call center. The company provides services and products to highly regulated industries, principally life science, which includes companies in the pharmaceutical, biotechnology, medical device, and other FDA-regulated industries; and additional industries, including industrial manufacturing, oil and gas and alternative energy, aerospace and defense, and other industries that require accuracy in processes and confirmation of the capabilities of their equipment. Transcat, Inc. was founded in 1964 and is headquartered in Rochester, New York.

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