Financial Contrast: Cohu (COHU) vs. Aehr Test Systems (AEHR)

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

Risk and Volatility

Aehr Test Systems has a beta of 0.82, suggesting that its share price is 18% less volatile than the S&P 500. Comparatively, Cohu has a beta of 0.96, suggesting that its share price is 4% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Aehr Test Systems and Cohu, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Aehr Test Systems 0 0 0 0 N/A
Cohu 0 0 4 0 3.00

Cohu has a consensus price target of $24.25, suggesting a potential upside of 3.15%. Given Cohu’s higher possible upside, analysts plainly believe Cohu is more favorable than Aehr Test Systems.

Dividends

Cohu pays an annual dividend of $0.24 per share and has a dividend yield of 1.0%. Aehr Test Systems does not pay a dividend. Cohu pays out 17.9% of its earnings in the form of a dividend.

Earnings & Valuation

This table compares Aehr Test Systems and Cohu’s top-line 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 2.64 -$5.65 million ($0.29) -7.83
Cohu $352.70 million 1.92 $32.84 million $1.34 17.54

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

Insider and Institutional Ownership

24.2% of Aehr Test Systems shares are owned by institutional investors. Comparatively, 85.5% of Cohu shares are owned by institutional investors. 21.9% of Aehr Test Systems shares are owned by company insiders. Comparatively, 3.9% of Cohu shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Profitability

This table compares Aehr Test Systems and Cohu’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%
Cohu 9.33% 14.10% 9.67%

Summary

Cohu beats Aehr Test Systems on 11 of the 14 factors compared between the two stocks.

About Aehr Test Systems

Aehr Test Systems designs, engineers, manufactures, and sells test and burn-in equipment used in the semiconductor industry worldwide. The company offers full wafer contact test systems, test during burn-in systems, test fixtures, die carriers, and related accessories; and Advanced Burn-in and Test System family of packaged part burn-in and test systems, which perform test during burn-in of complex devices, such as digital signal processors, microprocessors, microcontrollers, and systems-on-a-chip, as well as offer individual temperature control for high-power advanced logic devices. The company also provides FOX systems, which are full wafer contact parallel test and burn-in systems designed to make contact with all pads of a wafer simultaneously; WaferPak cartridge that includes a full-wafer probe card for use in testing wafers in FOX systems; DiePak carrier, a reusable and temporary package that enables IC manufacturers to perform final test and burn-in of singulated bare die; and test fixtures that hold the devices undergoing test or burn-in and electrically connect the devices under test to the system electronics. In addition, the company offers customer service and support programs, including system installation, system repair, applications engineering support, spare parts inventory, customer training, and documentation services. It markets and sells its products to semiconductor manufacturers, semiconductor contract assemblers, electronics manufacturers, and burn-in and test service companies through a network of distributors and sales representatives. Aehr Test Systems was founded in 1977 and is headquartered in Fremont, California.

About Cohu

Cohu, Inc., through its subsidiaries, engages in the development, manufacture, sale, and servicing of semiconductor test and inspection handlers, micro-electro mechanical system (MEMS) test modules, test contactors, and thermal sub-systems for semiconductor manufacturers and test subcontractors worldwide. It offers pick-and-place handlers; thermal handler for microprocessors, graphics processors, and other integrated circuits; pick-and-place platform for fabless and outsourced semiconductor assembly and test customers, as well as for integrated device manufacturers; a platform for assembly automation; gravity-feed and test-in-strip handlers; and turret handler for testing and inspection of integrated circuits, LEDs, and discrete devices. The company also provides MEMS test modules that generate physical stimuli for testing of sensor integrated circuits; thermal sub-systems that offer temperature control of the integrated circuit during the testing process; contactor solutions; spares; and a range of device dedication kits that enable handlers to process various semiconductor packages. Cohu, Inc. markets its products through direct sales force and independent sales representatives. The company was formerly known as Cohu Electronics, Inc. and changed its name to Cohu, Inc. in 1972. Cohu, Inc. was founded in 1947 and is headquartered in Poway, California.

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