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Advanced Energy Industries (AEIS): analysis traps
Where its figures could mislead a reader, and what to check before taking them at face value · Data: Q3 2026, to Sep 30, 2026, filed Nov 2, 2026; rules v1.1
Advanced Energy Industries (AEIS): 1 rule of 10 triggered on the filings to Sep 30, 2026: stock compensation added back = no economic cost. 2 to review; 1 with insufficient data; 2 not applicable. Each is a question to verify, with the normal explanation that would produce the same figures.
Check these first
Stock compensation added back = no economic cost Triggered · severity medium · confidence high
Stock compensation was $56M, 3.1% of revenue, in FY2025; buybacks were $30M (0.5× the SBC) and the diluted share count still rose 2.1%. 'Adjusted' figures that add SBC back treat pay in shares as free; the cost is borne by every shareholder as dilution, or by the cash spent to buy the shares back.
Innocent reading: A young company paying in equity while it scales; intensity falls as revenue grows.
Low P/E at a cyclical peak = undervalued To review · confidence medium
Net income of $290M is at a high against a median of $135M over eight years; at 28.1× the market is not pricing it as cheap, but a multiple on this year's profit still understates the mid-cycle one (60.5×).
A precise DCF value = the true value To review · confidence high
The DCF's point value is 155.28 a share (price 197.01); 78% of it is the terminal value, a number about years no one has seen. Moving operating margin by ±3 pts alone takes it from 123.65 to 186.91; across every method the research ran the range is 11 to 810. The value is a range; the decimals are not information.
Innocent reading: A stable, mature business with a narrow range of outcomes, where the point value is a fair summary.
Every rule
A01 FCF growth = the business improved Not triggered confidence medium
Free cash flow rose $52M to $126M; working capital and lower capex explain 0% of it, so most of the gain is in operating cash flow itself.
The figures and how they are read
| Fiscal year before | FY2024 |
| Fiscal year | FY2025 |
| Operating cash flow, year before | $131M |
| Operating cash flow | $233M |
| Capex, year before | $57M |
| Capex | $107M |
| Free cash flow, year before | $74M |
| Free cash flow | $126M |
| Change in FCF | $52M |
| Change in capex | $51M |
| Working capital: change in its cash contribution | −$19M |
| Of which: capex cut | 0.00 |
| Of which: working capital released | 0.00 |
| Share of the increase that need not repeat | +0.0% |
| Operating cash flow before working capital: change | 121500000.00 |
FCF = operating cash flow − cash capex; ΔFCF = ΔOCF − ΔCapEx; the working-capital part is the change in the cash-bridge items (receivables, inventory, payables, accruals), with the sign of the cash flow statement
Source: FY2025 (cash flow statement, fiscal year) · FY2024 (cash flow statement, fiscal year before)
A07 Stock compensation added back = no economic cost Triggered severity medium · confidence high
Stock compensation was $56M, 3.1% of revenue, in FY2025; buybacks were $30M (0.5× the SBC) and the diluted share count still rose 2.1%. 'Adjusted' figures that add SBC back treat pay in shares as free; the cost is borne by every shareholder as dilution, or by the cash spent to buy the shares back.
The figures and how they are read
| Fiscal year | FY2025 |
| Stock compensation | $56M |
| Revenue | $1.8B |
| SBC / revenue | +3.1% |
| Buybacks | $30M |
| Buybacks / SBC | 0.5 |
| Diluted shares, year before | 37.8M shares |
| Diluted shares | 38.6M shares |
| Diluted shares: change | +2.1% |
SBC / revenue from the cash flow statement's add-back; the diluted weighted share count year over year; buybacks from the financing section
Source: FY2025 (stock compensation, buybacks and the diluted share count, fiscal year)
What would explain it innocently
- A young company paying in equity while it scales; intensity falls as revenue grows
- Buybacks at prices below intrinsic value make up for the dilution over time
- A one-off grant (an acquisition, a founder award) rather than a steady level
What to look for in the filing
- The share count after the latest buybacks (the next 10-Q's cover)
- The price paid for the buybacks against the shares' value
- Unvested awards outstanding
What would show the trap does not apply
- The diluted share count falls over two years with buybacks at least equal to the stock compensation
- Stock compensation falls as a share of revenue in each of the next two years
Look again: next filing.
B02 Receivables growing = future cash is certain Not triggered confidence medium
Receivables grew 59% against revenue 50% in Q3 2026; DSO 58 against a median of 60: collections are keeping pace with sales.
The figures and how they are read
| Quarter | Q3 2026 |
| Revenue, year over year | +50.3% |
| Receivables, year over year | +58.5% |
| Quarter before | Q2 2026 |
| Revenue y/y, quarter before | +30.0% |
| Receivables y/y, quarter before | +32.8% |
| Days sales outstanding | 58.0 |
| DSO, median of eight quarters | 59.9 |
| Receivables | $475M |
| Revenue | $696M |
receivables and revenue against the same quarter a year earlier; DSO = receivables / quarterly revenue × days, against the median of the eight quarters before
Source: Q3 2026 (receivables and revenue) · Q3 2025 (the same quarter a year earlier)
B08 Adjusted profit = economic profit Insufficient data
no reconciliation table read from the releases yet and fewer than three quarters with both an adjusted and a GAAP EPS
C02 Low net debt = no refinancing risk Not triggered confidence medium
$136M comes due within a year, 11.0× covered by cash and investments of $1.4B plus $70M of free cash flow.
The figures and how they are read
| Cash and investments | $1.4B |
| Debt | $1.3B |
| Net debt | −$159M |
| Due within a year | $136M |
| Read from | the current portion of debt on the balance sheet |
| Free cash flow, twelve months | $70M |
| Cash plus free cash flow | $1.5B |
| Coverage of what is due | 11.0 |
| Due in the second year | — |
| Balance sheet date | 2026-09-30 |
due within a year from the maturity table (else the current portion of debt), against cash and investments plus free cash flow over the last twelve months (zero if negative); no credit lines assumed
Source: 2026-09-30 (debt maturities, cash and investments)
D03 EPS growth = profit growth Not triggered confidence high
EPS rose 70% and net income rose 70% in Q2 2025; the share count rose 0.0%: EPS growth follows profit growth.
The figures and how they are read
| Quarter | Q2 2025 |
| Quarter before | Q2 2024 |
| EPS, year before | $0.39 |
| EPS | $0.67 |
| Net income, year before | $15M |
| Net income | $25M |
| Diluted shares, year before | 37.8M shares |
| Diluted shares | 37.8M shares |
| EPS growth | +70.2% |
| Net income growth | +70.3% |
| Diluted shares: change | +0.0% |
| eps from profit | $0.28 |
| eps from share count | $0.00 |
EPS and net income against the same quarter a year earlier; the EPS bridge attributes the change to profit first, then to the share count (the order is fixed and disclosed)
Source: Q2 2025 (net income, diluted shares, EPS) · Q2 2024 (the same quarter a year earlier)
E02 Low P/E at a cyclical peak = undervalued To review confidence medium
Net income of $290M is at a high against a median of $135M over eight years; at 28.1× the market is not pricing it as cheap, but a multiple on this year's profit still understates the mid-cycle one (60.5×).
The figures and how they are read
| market value | $8.2B |
| net income ttm | $290M |
| pe ttm | 28.10 |
| net income median fy | $135M |
| pe mid cycle | 60.50 |
| net income peak fy | $200M |
| years | FY2017 / 138.0; FY2018 / 147.0; FY2019 / 65.0; FY2020 / 135.0; FY2021 / 135.0; FY2022 / 200.0; FY2023 / 128.0; FY2024 / 54.0 |
| down years in window | 3 |
P/E on the trailing twelve months' net income against the P/E on the median net income of the last eight fiscal years (a mid-cycle stand-in); 'at a peak' = this year's profit at or above 90% of the best year and at least 1.3× the median
Source: Q3 2026 (net income, trailing twelve months)
What would show the trap does not apply
- Profit holds at this level through the next two years (the eight-year peak was a new base, not a top)
- The industry's capacity and prices stay where they are rather than reverting
Look again: next filing.
E07 A precise DCF value = the true value To review confidence high
The DCF's point value is 155.28 a share (price 197.01); 78% of it is the terminal value, a number about years no one has seen. Moving operating margin by ±3 pts alone takes it from 123.65 to 186.91; across every method the research ran the range is 11 to 810. The value is a range; the decimals are not information.
The figures and how they are read
| dcf value | 155.28 |
| price | 197.01 |
| terminal value share | +77.5% |
| swing by input | Operating margin / ±3 pts / 123.65 / 186.91; Revenue growth (each year) / ±5 pts / 129.61 / 185.37; WACC / ±1 pt / 137.21 / 178.34; Tax rate / ±5 pts / 145.23 / 165.33 |
| range all methods | 11.02; 810.03 |
the DCF's point value against the share of it that is the terminal value and the value at each input moved by one step (growth ±5 pts, WACC ±1 pt, margin ±3 pts …); the range across every method the research ran
Source: 2026-11-08 (valuation research)
What would explain it innocently
- A stable, mature business with a narrow range of outcomes, where the point value is a fair summary
- The inputs that matter most are themselves well known (a regulated return, a long contract)
What to look for in the filing
- Which input you believe differs from the research's and why
- What the price implies for growth (the reverse DCF on the fair-value page)
What would show the trap does not apply
- The DCF's value is robust to the terminal growth and discount rate (the range's low end is still above the price)
- The company's cash flows over the next three years track the DCF's early years
Look again: next filing.
J06 A bank's low P/E and high profit = safe Not applicable
not a bank
J08 A REIT's low net income = the dividend is unsafe Not applicable
not a REIT
What the statuses mean
Triggered: the filings show the pattern; read the normal explanations and the missing evidence before concluding anything. To review: one quarter or a weak signal; a reader's judgement, not a pattern. Not triggered: the pattern is absent on these figures. Insufficient data: the filings read so far do not hold what the rule needs; this is not a clean bill. Not applicable: the rule is not meant for this kind of company (a bank's working capital, a loss-making quarter's EPS growth). Out of date: the latest filing is more than fifteen months old.
Severity is what the pattern could mean for cash, value or solvency; confidence is how reliable the inputs and the reading are. The two are kept apart.
Record a view
A reader's judgement, grounds, what would change it and the next review; kept in the browser (needs JavaScript).
Every rule and the companies it triggers on → Advanced Energy Industries: cash flow →
Each rule reads the company's own filings by a fixed formula and says what would explain the same figures innocently. A triggered rule is a question to verify, not a finding of manipulation, and not a view on the stock. Missing data is shown as missing, never as clear. Not investment advice.