Head-To-Head Survey: GlobalFoundries (NASDAQ:GFS) vs. Aehr Test Systems (NASDAQ:AEHR)

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

Volatility & Risk

Aehr Test Systems has a beta of 3.47, meaning that its share price is 247% more volatile than the S&P 500. Comparatively, GlobalFoundries has a beta of 1.77, meaning that its share price is 77% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Aehr Test Systems	-14.25%	-3.83%	-3.36%
GlobalFoundries	10.36%	6.69%	4.69%

Valuation & Earnings

This table compares Aehr Test Systems and GlobalFoundries”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Aehr Test Systems	$50.00 million	51.07	-$7.13 million	($0.24)	-325.75
GlobalFoundries	$6.94 billion	3.82	$885.00 million	$1.28	37.77

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

Analyst Ratings

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Aehr Test Systems	1	1	5	1	2.75
GlobalFoundries	2	10	8	0	2.30

Aehr Test Systems presently has a consensus target price of $132.50, suggesting a potential upside of 69.48%. GlobalFoundries has a consensus target price of $74.63, suggesting a potential upside of 54.39%. Given Aehr Test Systems’ stronger consensus rating and higher possible upside, equities research analysts clearly believe Aehr Test Systems is more favorable than GlobalFoundries.

Institutional and Insider Ownership

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

Summary

GlobalFoundries beats Aehr Test Systems on 8 of the 15 factors compared between the two stocks.

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.

About GlobalFoundries

GlobalFoundries Inc., a semiconductor foundry, provides range of mainstream wafer fabrication services and technologies worldwide. It manufactures various semiconductor devices, including microprocessors, mobile application processors, baseband processors, network processors, radio frequency modems, microcontrollers, and power management units. GlobalFoundries Inc. has a strategic partnership with Efficient Computer to develop high-performance computer processors. The company was incorporated in 2008 and is headquartered in Malta, New York.