Applied Optoelectronics (NASDAQ:AAOI) Shares Down 6.8% - Time to Sell?

Key Points

• Applied Optoelectronics shares decreased by 6.8%, closing at $25.28, with a trading volume that was 24% lower than the average.
• Analysts have mixed views; while Needham & Company set a "buy" rating with a target of $32.00, Raymond James lowered their target to $18.00.
• The company reported a revenue increase of 145.5% year-over-year, with a negative EPS of ($0.02), surpassing analysts' expectations of ($0.04).

Applied Optoelectronics, Inc. (NASDAQ:AAOI - Get Free Report) traded down 6.8% during trading on Monday . The stock traded as low as $25.06 and last traded at $25.28. 3,239,171 shares traded hands during mid-day trading, a decline of 24% from the average session volume of 4,285,149 shares. The stock had previously closed at $27.13.

Wall Street Analyst Weigh In

A number of equities analysts have recently weighed in on AAOI shares. Needham & Company LLC started coverage on Applied Optoelectronics in a report on Friday. They set a "buy" rating and a $32.00 price target for the company. Rosenblatt Securities raised their target price on Applied Optoelectronics from $30.00 to $34.00 and gave the company a "buy" rating in a report on Thursday, June 26th. Northland Securities raised their target price on Applied Optoelectronics to $50.00 and gave the company a "buy" rating in a report on Friday, June 13th. Wolfe Research started coverage on Applied Optoelectronics in a report on Tuesday, July 8th. They set a "peer perform" rating for the company. Finally, Raymond James Financial lowered their target price on Applied Optoelectronics from $20.00 to $18.00 and set an "outperform" rating for the company in a report on Friday, May 9th. Four equities research analysts have rated the stock with a hold rating and four have issued a buy rating to the stock. According to MarketBeat.com, the company presently has a consensus rating of "Moderate Buy" and a consensus price target of $26.00.

Applied Optoelectronics Stock Performance

The company has a market capitalization of $1.40 billion, a price-to-earnings ratio of -6.53 and a beta of 2.78. The stock has a fifty day moving average price of $22.35 and a two-hundred day moving average price of $20.95. The company has a quick ratio of 1.34, a current ratio of 1.88 and a debt-to-equity ratio of 0.47.

Applied Optoelectronics (NASDAQ:AAOI - Get Free Report) last announced its quarterly earnings data on Thursday, May 8th. The semiconductor company reported ($0.02) EPS for the quarter, beating analysts' consensus estimates of ($0.04) by $0.02. The business had revenue of $99.86 million during the quarter, compared to the consensus estimate of $99.37 million. Applied Optoelectronics had a negative return on equity of 15.40% and a negative net margin of 55.98%. The business's revenue for the quarter was up 145.5% on a year-over-year basis. During the same quarter in the previous year, the business earned ($0.31) earnings per share. As a group, analysts forecast that Applied Optoelectronics, Inc. will post -1.18 EPS for the current fiscal year.

Insiders Place Their Bets

In other Applied Optoelectronics news, CFO Stefan J. Murry sold 3,000 shares of the company's stock in a transaction that occurred on Wednesday, July 16th. The stock was sold at an average price of $27.46, for a total transaction of $82,380.00. Following the sale, the chief financial officer owned 318,036 shares in the company, valued at $8,733,268.56. This represents a 0.93% decrease in their ownership of the stock. The sale was disclosed in a filing with the SEC, which is available through this link. Also, insider Hung-Lun (Fred) Chang sold 23,837 shares of the firm's stock in a transaction that occurred on Tuesday, May 13th. The stock was sold at an average price of $19.06, for a total value of $454,333.22. Following the completion of the sale, the insider directly owned 278,842 shares in the company, valued at approximately $5,314,728.52. This trade represents a 7.88% decrease in their position. The disclosure for this sale can be found here. Over the last three months, insiders sold 40,263 shares of company stock worth $787,050. Company insiders own 4.50% of the company's stock.

Hedge Funds Weigh In On Applied Optoelectronics

Several hedge funds have recently modified their holdings of AAOI. AlphaQuest LLC boosted its position in Applied Optoelectronics by 243.9% during the first quarter. AlphaQuest LLC now owns 2,297 shares of the semiconductor company's stock valued at $35,000 after purchasing an additional 1,629 shares during the last quarter. Meeder Asset Management Inc. bought a new position in Applied Optoelectronics during the fourth quarter valued at about $38,000. GAMMA Investing LLC raised its holdings in Applied Optoelectronics by 85.9% during the second quarter. GAMMA Investing LLC now owns 1,785 shares of the semiconductor company's stock valued at $46,000 after buying an additional 825 shares in the last quarter. Sterling Capital Management LLC raised its holdings in Applied Optoelectronics by 858.2% during the fourth quarter. Sterling Capital Management LLC now owns 1,284 shares of the semiconductor company's stock valued at $47,000 after buying an additional 1,150 shares in the last quarter. Finally, CWM LLC increased its stake in shares of Applied Optoelectronics by 175.5% in the second quarter. CWM LLC now owns 2,218 shares of the semiconductor company's stock worth $57,000 after purchasing an additional 1,413 shares during the period. 61.72% of the stock is currently owned by institutional investors and hedge funds.

Applied Optoelectronics Company Profile

Applied Optoelectronics, Inc designs, manufactures, and sells fiber-optic networking products in the United States, Taiwan, and China. It offers optical modules, optical filters, lasers, laser components, subassemblies, transmitters and transceivers, turn-key equipment, headend, node, distribution equipment, and amplifiers.

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