Advanced Energy (AEIS Quick QuoteAEIS - Free Report) is expanding its footprint in the medical technology sector with the launch of the NCF150 series of high-isolation, low-leakage current AC-DC power supplies. 

Designed to meet the stringent cardiac floating (CF) requirements of the IEC 60601-1 medical safety standard, these power supplies are crucial for medical equipment that comes into direct contact with the heart, such as dialysis machines and electrosurgery platforms. 

With outputs up to 150 W, high efficiency and enhanced safety features, AEIS’ latest offering combines performance and reliability, solidifying its role as a leader in precision power solutions for complex medical systems.

Will Strong Portfolio Aid AEIS’ Prospects?

Advanced Energy’s expanding portfolio across semiconductor and industrial and medical end-markets has been noteworthy, reflecting its focus on diversifying its offerings.

AEIS experienced strong design wins in applications such as glass coating, test and measurement, battery production and diagnostic and therapeutic medical applications in second-quarter 2024, including surgical robot systems.

In June, AEIS introduced the NavX impedance matching network with industry-leading algorithms and direct generator communication for precise plasma control in advanced semiconductor etch processes.

Acquisitions have also played a significant role in shaping the company’s growth trajectory. The acquisition of Airity Technologies added expertise in high-voltage, high-density power solutions, enhancing AEIS’s product portfolio. Airity’s gallium nitride-based solutions are expected to accelerate innovation, particularly in the industrial and semiconductor markets.

In second-quarter 2024, AEIS generated revenues of $365 million, down 12.1% year over year. The downtick was primarily due to sluggish demand in non-semi markets, persistent macroeconomic uncertainties and unfavorable foreign exchange that negatively impacted the top line.

These factors have also hurt AEIS’ performance in the year-to-date period, with shares declining 7.1% against the Zacks Computer & Technology sector’s return of 22.2%.

For third-quarter 2024, Advanced Energy anticipates revenues of $370 million (+/- $20 million). The Zacks Consensus Estimate for revenues is pegged at $374.54 million, suggesting a year-over-year decline of 8.65%.

Advanced Energy expects non-GAAP earnings of 90 cents per share (+/- 25 cents). The Zacks Consensus Estimate for earnings is pegged at 92 cents per share, unchanged in the past 30 days.

What Investors Should Do With AEIS Stock?

AEIS stock is not so cheap, as the Value Score of C suggests a stretched valuation at this moment.

AEIS currently carries Zacks Rank #3 (Hold), suggesting that it may be wise to wait for a more favorable entry point in the stock.

Top-Rank Stocks To Buy

AudioEye (AEYE Quick QuoteAEYE - Free Report) , Aspen Technology and Badger Meter (BMI Quick QuoteBMI - Free Report) are some better-ranked stocks in the broader technology sector. AudioEye and Aspen Technology currently sport a Zacks Rank #1 (Strong Buy) at present, while Badger Meter carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here. 

AudioEye’s shares have surged 334.8% in the year-to-date period. The long-term earnings growth rate for AEYE is pegged at 25%.

Aspen Technology’s shares have moved up 6.1% in the year-to-date period. The long-term earnings growth rate for AZPN is currently projected at 13.12%. 

Badger Meter’s shares have appreciated 41.9% in the year-to-date period. The long-term earnings growth rate for BMI is currently projected at 17.91%.