Regeneron and Aehr Test Systems Both Sold Off in 2026 — But Not for the Reasons You'd Expect

Regeneron and Aehr Test Systems both had rough stretches on the market in 2026, but the actual causes were more specific — and different from generic "disappointing earnings" narratives — than headlines often suggest.

Regeneron: A Pipeline Failure, Not a Revenue Miss

Regeneron's stock decline wasn't primarily about missing revenue or earnings estimates — in its first-quarter 2026 report, the company actually beat both the Zacks Consensus revenue and EPS estimates. The real trigger was profitability: adjusted operating income came in at $642.9 million, a striking 32.4% below analyst expectations, which overshadowed the top-line beats and sent shares down 7.1% that session (StockStory).

The bigger blow came from the pipeline, not the balance sheet. Regeneron's fianlimab and Libtayo combination therapy failed to significantly delay cancer progression compared to Merck's Keytruda in a Phase 3 melanoma study — a real setback for one of the company's closely watched growth drivers, and the news that ultimately drove a roughly 15% decline in the stock over a 30-day stretch as investors questioned whether Regeneron's remaining growth drivers could offset the pipeline disappointment (TIKR).

Aehr Test Systems: A Genuine Revenue Collapse, Not Primarily Tariffs

Aehr Test Systems' revenue decline was real and substantial: fiscal 2026 revenue came in at $50.00 million, down 15.21% from $58.97 million the prior year, with an especially sharp Q3 2026 showing revenue of just $10.3 million, down 43.7% year-over-year (Aehr Test Systems). The stock reacted to these results at multiple points during the year — falling 12.5% after a first-quarter revenue miss and another 5.67% following Q3 results that beat on EPS but missed on revenue.

What's less clear is how much tariffs specifically drove this decline, as opposed to broader demand timing issues in Aehr's semiconductor burn-in and test equipment business, which tends to be lumpy and tied to specific customer capital-spending cycles rather than macro trade policy alone. Investors should treat the tariff explanation with some skepticism absent more specific company commentary directly attributing the shortfall to trade policy.

The More Interesting Part: Aehr's Own Forward Guidance

Despite the rough fiscal 2026 results, Aehr's own guidance for fiscal 2027 is notably bullish: the company expects total revenue between $130 million and $150 million, representing roughly 160% to 200% year-over-year growth. That's a striking contrast to the year just completed, and it reflects Aehr's own confidence that current demand softness is a timing issue tied to customer program schedules rather than a structural decline in its underlying market — the company also reported record quarterly bookings and a $100 million effective backlog alongside its full-year results.

What This Means for Investors

For Regeneron, the relevant question going forward is less about revenue trajectory — which has actually been beating estimates — and more about pipeline execution, given how directly the fianlimab/Libtayo trial result moved the stock. For Aehr, the sharp revenue decline is real, but the company's own guidance suggests it expects a significant rebound tied to specific customer programs ramping in fiscal 2027, which makes the current revenue trough look more like a timing gap than a permanent impairment — though investors should weigh that optimistic guidance against the company's own history of guidance volatility before treating it as a given.

FAQ

Why did Regeneron's stock actually drop? Not from missing revenue or earnings estimates — the company beat both. The drop was driven by adjusted operating income missing by 32.4%, and more significantly, by its fianlimab/Libtayo combination therapy failing to beat Merck's Keytruda in a Phase 3 melanoma trial.

Was Aehr Test Systems' revenue decline really caused by tariffs? That's unclear — the company's fiscal 2026 revenue fell 15.21% and Q3 revenue fell 43.7% year-over-year, but the available evidence points more toward customer program timing than a specific, confirmed tariff impact.

What is Aehr Test Systems' outlook for fiscal 2027? Notably bullish — the company guided to $130-150 million in revenue, representing 160-200% year-over-year growth, alongside record quarterly bookings and a $100 million effective backlog.

Is Regeneron's business fundamentally weaker now? Not based on revenue and earnings alone, which beat estimates — the real concern is pipeline execution, specifically the fianlimab/Libtayo trial result, which raises questions about the company's next wave of growth drivers.

Should investors see these selloffs as buying opportunities? That depends on conviction in each company's specific catalyst: Regeneron's story now hinges on pipeline execution beyond the failed trial, while Aehr's hinges on whether its bullish fiscal 2027 guidance and backlog actually materialize into revenue.

What's the biggest lesson from these two selloffs? That "disappointing earnings" headlines often obscure more specific causes — Regeneron actually beat estimates but was hurt by a drug trial failure, while Aehr's revenue drop is real but its stated cause (tariffs) is less clearly supported than the company's own more optimistic forward guidance suggests.