Financial Review: Aehr Test Systems (NASDAQ:AEHR) versus POET Technologies (NASDAQ:POET)

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

Valuation and Earnings

This table compares POET Technologies 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
POET Technologies	$1.08 million	821.94	-$62.96 million	($0.58)	-8.84
Aehr Test Systems	$50.00 million	37.37	-$7.13 million	$0.04	1,424.50

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

Risk & Volatility

POET Technologies has a beta of 0.91, suggesting that its share price is 9% less volatile than the S&P 500. Comparatively, Aehr Test Systems has a beta of 3.36, suggesting that its share price is 236% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
POET Technologies	-4,423.13%	-11.65%	-10.12%
Aehr Test Systems	2.97%	1.76%	1.54%

Analyst Ratings

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
POET Technologies	1	0	0	0	1.00
Aehr Test Systems	1	1	5	1	2.75

POET Technologies currently has a consensus target price of $8.00, indicating a potential upside of 55.95%. Aehr Test Systems has a consensus target price of $118.75, indicating a potential upside of 108.41%. Given Aehr Test Systems’ stronger consensus rating and higher possible upside, analysts clearly believe Aehr Test Systems is more favorable than POET Technologies.

Insider & Institutional Ownership

2.0% of POET Technologies shares are held by institutional investors. Comparatively, 69.7% of Aehr Test Systems shares are held by institutional investors. 0.5% of POET Technologies shares are held by insiders. Comparatively, 4.6% of Aehr Test Systems shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Summary

Aehr Test Systems beats POET Technologies on 13 of the 14 factors compared between the two stocks.

About POET Technologies

POET Technologies develops photonic integrated circuits and optical engines for applications that require high-speed data transmission. Its products are designed for markets including data centers, artificial intelligence infrastructure and telecommunications. The company’s proprietary Optical Interposer platform is intended to integrate optical and electronic components using semiconductor manufacturing techniques. POET uses this platform to develop compact optical engines that combine components such as lasers, photonic devices and integrated circuits.

About Aehr Test Systems

Aehr Test Systems designs, manufactures and markets semiconductor test and burn-in equipment and related products. Its systems are used to test devices at the wafer, die and packaged-chip stages of production. The company’s offerings include FOX series test and burn-in systems, WaferPak wafer-level contactors and DiePak carriers. These products support testing for applications such as silicon carbide power semiconductors, silicon photonics and other devices used in automotive, computing and communications markets.