Report by Two Rivers Analytics
AEIS features as one of the top short candidates in Two Rivers’ ‘Breaking Estimates Model’ - the power electronics industry faces increased competition, pressuring AEIS’ sales and margins. The company posted lower than expected results when it announced earnings last quarter and all four of its business segments have now seen a decline in revenue during both Q3 and Q4. Estimates have been sliding all year but have taken a sharper turn down this past month. Margins have been falling since 2017, yet are forecast to turn on a dime now and increase immediately to 17% adjusted EBITDA. The stock trades at historically high multiples of sales and earnings. Other short ideas include LGI Homes, MP Materials and Xometry.