AEBI

Aebi Schmidt ($AEBI) Executives Double Down with Consecutive Purchases Amid 85% Stock Plunge

11/18/2025 21:29

Swiss winter maintenance equipment specialist Aebi Schmidt Holding AG ($AEBI) executives have made another round of significant purchases in mid-November, marking the second wave of insider buying following concentrated purchases in August. This comes as the stock hovers near yearly lows, representing strong management confidence signals. Between November 14th and 17th, CFO Marco Portmann and Officer Thomas Schenkirsch purchased 5,000 shares ($56,000) and 6,500 shares ($70,850) respectively at prices ranging from $10.90-$11.20, close to current trading levels. Notably, five executives had also purchased shares consecutively in August: Marco Portmann (5,000 shares), Henning Schroeder (2,000 shares), Steffen Schewerda (3,300 shares), Barend Fruithof (6,000 shares), and Thomas Schenkirsch (3,500 shares), totaling 19,800 shares worth approximately $240,000. Founded in 1883, Aebi Schmidt specializes in manufacturing winter maintenance equipment, airport cleaning machinery, and specialized agricultural vehicles for extreme environments. The company serves niche markets including road snow removal, airport runway cleaning, and steep-slope agricultural machinery. With approximately 3,000 employees globally, it operates production facilities across Switzerland, Germany, Netherlands, Poland, Finland, USA, and Canada. The recent Shyft Group acquisition has strengthened its North American market position. The executive buying spree gains significance against the backdrop of a stark disconnect between improving business fundamentals and poor stock performance. Q3 results showed order intake surging 33% year-over-year, with backlog increasing 6% to $1.127 billion. Integration synergies from the Shyft acquisition expanded to $40 million, while adjusted EBITDA rose 25% to $42.2 million. Management reaffirmed full-year 2025 guidance of $1.85-2.0 billion in sales and $145-165 million in adjusted EBITDA. However, the stock price has failed to reflect these positive developments. Starting at $83 in early July, shares now trade around $11-12, representing an 85%+ decline year-to-date. While the trailing P/E of 77x appears elevated, this reflects temporary cost increases affecting net income, whereas the forward P/E of 12.7x appears reasonable. The P/B ratio of 1.01x and P/S ratio of 0.63x suggest significant undervaluation relative to industry peers. For small-cap investors, the company's market position is particularly compelling. Snow removal and airport cleaning equipment represent high-barrier specialty markets where technical expertise and durability are key competitive advantages. These markets prioritize quality and reliability over price, especially given their critical role in road safety and airport operations, providing relatively stable demand less sensitive to economic cycles. Investors should monitor debt levels and cash flow dynamics closely. While the debt-to-equity ratio of ~100% appears high, much reflects acquisition-related temporary increases. Management plans to reduce net debt/EBITDA to below 3x by end-2025 and below 2x by end-2026. Current cash holdings of $126 million and a current ratio of 2.1x support near-term operational stability. Key indicators for confirming stock recovery include: First, Q4 results must show net income improvement as one-time costs subside and profitability normalizes. Second, 2026 guidance should demonstrate revenue exceeding $2 billion with expanding EBITDA margins. Third, debt reduction progress must align with management's deleveraging timeline. Conversely, warning signs include infrastructure budget cuts in key European and North American markets, competitor market share gains, and raw material cost pressures squeezing margins. Given significant exposure to government-related orders, fiscal policy changes across key markets warrant close monitoring. Under an optimistic scenario, Shyft integration synergies exceed expectations while European markets recover, enabling 2026 target achievement. The current forward P/E of 12.7x would represent significant undervaluation with substantial recovery potential. The base case scenario involves achieving current guidance with gradual debt reduction, potentially driving shares toward $15, aligning with DA Davidson's price target. In a risk scenario, global economic slowdown could curtail public infrastructure investment while high debt burden materializes. However, current share prices likely already reflect substantial negative factors, with continued executive buying potentially signaling a bottom. In conclusion, Aebi Schmidt presents a stark disconnect between improving fundamentals and poor stock performance, accompanied by strong insider confidence signals. The combination of niche market leadership, structural advantages, and current undervaluation suggests a compelling opportunity for small-cap investors with appropriate risk tolerance.