AEBI

Aebi Schmidt is a transformed company post the July 1, 2025 Shyft merger, with FY2025 revenue jumping 40.6% to $1.53B and total assets nearly doubling (+84.6% to $2.01B) as management pursues its stated goal to 'develop our market share in North America' and 'leverage Shyft's innovative design and manufacturing capabilities.' The strategic logic is reasonable — a Swiss specialty-vehicle maker bolting on a North American niche leader in commercial/RV chassis — and the top line confirms the scale-up. But the quality of the FY2025 print is poor: net income collapsed 68.3% to $9.74M, diluted EPS fell 77.6% to $0.17, operating cash flow cratered 87.0% to just $8.97M, and D&A jumped 67.3% to $44.2M (consistent with purchase-accounting step-ups). Operating margin compressed to 4.8% and net margin to 0.6% — this is a low-margin industrial in the middle of a digestion phase, not a compounder hitting its stride.

Valuation reflects the split picture. P/S of 0.7 on $1.53B of revenue is undemanding for a global specialty-vehicle franchise with ~5,700 employees and 70+ locations. But the 77x P/E on depressed earnings is not a real multiple — it's an artifact of a near-zero bottom line. Balance sheet is workable but levered up: long-term debt grew 45.5% to $548M and current-portion debt doubled to $46.9M, against only $98.5M cash and $8.97M of OCF. Liabilities/equity at 1.46x is manageable thanks to the equity issuance that funded the deal (equity +123.2%), but free cash flow after $14.2M capex is essentially zero while dividends paid quadrupled to $13.4M — that payout is not currently earned from operations.