Advanced Energy Industries (AEIS) shares have moved modestly over the past month, and investors might be taking a closer look at its longer-term performance. The company has delivered solid growth, particularly when considering its recent yearly gains.

See our latest analysis for Advanced Energy Industries.

Advanced Energy Industries has enjoyed a strong run, with a remarkable 75.55% share price return year-to-date and an even more impressive 85.58% one-year total shareholder return. This momentum signals growing confidence in the company’s growth prospects, even as the market absorbs recent fluctuations.

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With shares trading close to analyst targets and recent growth factored in, the key question is whether Advanced Energy Industries is undervalued, or if investors have already priced in all of its future growth potential.

With the most widely followed narrative placing Advanced Energy Industries’ fair value at $170.50, the latest close of $202.48 implies the shares are trading well above what consensus expects based on long-term earnings potential. This disconnect spotlights the importance of understanding the forward growth assumptions underpinning current price levels.

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% by year-end 2025, paving the way for outpaced earnings growth relative to revenue.

Read the complete narrative.

What’s driving the optimism here? The narrative banks on a leap in future profitability and margin expansion, fueled by big product and operational upgrades. Want to know which bold assumptions are propping up that fair value? Unlock the full narrative to see the forecasts and projections behind the price.

Result: Fair Value of $170.50 (OVERVALUED)

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

However, risks remain if market growth falters or customer concentration issues emerge. Either scenario could quickly challenge Advanced Energy Industries’ optimistic outlook.

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

If you think there’s another side to the story or want to dive deeper into the numbers yourself, building your own narrative takes less than three minutes. Do it your way

A good starting point is our analysis highlighting 2 key rewards investors are optimistic about regarding Advanced Energy Industries.

Smart investors know that just one stock is never the whole story. Expand your horizons and stay ahead by checking out these high-potential ideas picked with the Simply Wall Street Screener:

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.

Companies discussed in this article include AEIS.

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