Maybe the best thing I can say about Advanced Energy Industries’ (AEIS) performance since my last update is that it could have been worse. Down marginally, the shares have outperformed the weak NASDAQ, and haven’t done any worse than comps/rivals like Comet Holdings (COTN.SW), MKSI (MKSI), and VAT Group (OTCPK:VACNY), despite what I believe are valid ongoing concerns about market share loss.
It’s that possible market share loss that concerns me most. The supply chain issues that are hitting margins and preventing AEIS from shipping to demand are a problem, to be sure, but one that I believe will resolve over time. Fundamental share loss, though, is harder to deal with in the short term and is certainly more alarming when it comes to projecting future revenue and profit growth.
I don’t believe my long-term growth assumptions are overly bullish (mid-single-digit revenue growth and modest margin improvement), but management has some work to do here to reestablish AEIS’s credentials as the leader in its space and a go-to name in the semi-equipment space. I’m still bullish on balance, but this is definitely a “Buy” with an asterisk and a name really only suited to more adventurous investors.
Read the full article here:
Advanced Energy Industries Needs To Reassure The Street And Rebuild Sales Momentum
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