Russell 2000 Gem with 22% Upside

August 23, 2024 11:45 AM PDT | By Team Kalkine Media

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Headlines

Advanced Energy Surpasses Q2 Earnings Estimates

Revenue Boost in Key Segments for Advanced Energy

Solid Cash Flow and Strong Dividend Payments

Advanced Energy Industries (NASDAQ:AEIS) stands as a prominent figure in power conversion technology. Founded in 1981 and headquartered in Denver, the company specializes in power conversion, measurement, and control solutions for semiconductor and thin-film plasma processes. AEIS also provides high- and low-voltage power products suitable for diverse applications, including hyperscale data centers, with extensive sales operations across North America, Europe, and Asia.

With a valuation of $4.02 billion, AEIS is part of the Russell 2000 Index and the S&P SmallCap 600 Index.

Advanced Energy Surpasses Q2 Earnings Estimates

On July 30, Advanced Energy reported its second-quarter results, showcasing adjusted earnings of $0.85 per share, exceeding the market's expected $0.69 per share. Although quarterly revenue declined by 12.2% year-over-year to $364.95 million, it surpassed the forecast of $350.54 million.

Revenue Boost in Key Segments for Advanced Energy

The company's semiconductor sector saw a 9% increase in revenue compared to the previous year. Additionally, revenue from data centers and computing rose by 23% year-over-year. However, revenue from the industrial and medical division dropped by 38%, and telecom and networking revenue fell by 55%.

Solid Cash Flow and Strong Dividend Payments

During the quarter, AEIS generated $6.9 million in cash flow from continuing operations and ended Q2 with a robust cash balance of $986 million, reflecting a more than 100% increase from the previous year. The company distributed $3.8 million in quarterly dividends, resulting in a dividend yield of 0.37% with a modest payout ratio of approximately 12%.

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