A Look at Advanced Energy Industries's Valuation as Analyst Upgrades and Product Launch Buzz Grow Ahead of Q3

Advanced Energy Industries (AEIS) is drawing attention ahead of its upcoming third quarter earnings as the company gears up to showcase new products at SEMICON West 2025 and continues to outperform in datacenter power and computing markets.

See our latest analysis for Advanced Energy Industries.

Momentum has really gathered pace for Advanced Energy Industries this year, with the share price jumping over 12% in the last month and delivering an impressive 70% year-to-date price return. Alongside analyst optimism and new tech announcements, long-term investors have been rewarded as well. The company boasts an 84.8% total shareholder return over one year and 161.9% over three years, signaling sustained growth and strong market confidence.

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But with momentum running hot and analysts raising their targets, investors are left wondering if shares of Advanced Energy are still attractively valued, or if the market has already priced in all the expected upside.

Most Popular Narrative: 17% Overvalued

With Advanced Energy Industries closing at $196.58, the most widely followed narrative pegs fair value at $167.50. This sets expectations below where shares currently trade and raises questions about recent momentum.

A deliberate shift to higher-margin product segments, rationalization of the product portfolio, closure of China factories, and operational efficiencies (including supply chain optimization) are structurally raising gross margin levels. The company targets gross margins of 39 to 40 percent by year-end 2025, paving the way for outpaced earnings growth relative to revenue.

Read the complete narrative.

How do ambitious profit targets and bold margin upgrades translate into today's price? The underlying forecast here weaves together an aggressive profit outlook, elevated long-term earnings, and a projected margin increase. But what is fueling the math behind that fair value call? The secret mix of growth and valuation multiples is waiting to be uncovered in the full narrative.

Result: Fair Value of $167.50 (OVERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, even as optimism runs high, heavy dependence on major data center customers and ongoing tariff uncertainties could still challenge the current growth narrative.

Find out about the key risks to this Advanced Energy Industries narrative.

Build Your Own Advanced Energy Industries Narrative

If you have a different perspective or want to dig into the details yourself, it's easy to craft your own viewpoint and follow the numbers. Do it your way.

A great starting point for your Advanced Energy Industries research is our analysis highlighting 1 key reward and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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