Applied Optoelectronics (NASDAQ:AAOI) Shares Gap Down - Here's What Happened

Key Points

• Applied Optoelectronics (NASDAQ:AAOI) gapped down at the open after closing at $158.41 and opening at $149.25, though the stock later traded higher on heavy volume.
• Analysts are split on the name: recent ratings ranged from Buy to Hold, with an average Hold rating and an average price target of $79.80.
• The company’s latest quarterly results missed estimates, with EPS of -$0.07 versus expectations for -$0.05 and revenue of $151.14 million versus $156.98 million expected; insiders also sold a notable amount of stock in recent months.

Applied Optoelectronics, Inc. (NASDAQ:AAOI - Get Free Report)'s stock price gapped down before the market opened on Monday . The stock had previously closed at $158.41, but opened at $149.25. Applied Optoelectronics shares last traded at $167.6540, with a volume of 3,380,159 shares trading hands.

Analysts Set New Price Targets

A number of equities analysts have weighed in on AAOI shares. Rosenblatt Securities restated a "buy" rating and issued a $50.00 target price on shares of Applied Optoelectronics in a research note on Thursday, February 19th. Needham & Company LLC upped their target price on Applied Optoelectronics from $43.00 to $80.00 and gave the stock a "buy" rating in a research note on Friday, February 27th. Raymond James Financial restated an "outperform" rating and issued a $160.00 target price on shares of Applied Optoelectronics in a research note on Friday, May 8th. Northland Securities restated a "market perform" rating and issued a $55.00 target price on shares of Applied Optoelectronics in a research note on Friday, February 27th. Finally, B. Riley Financial upgraded Applied Optoelectronics from a "sell" rating to a "neutral" rating and set a $54.00 target price on the stock in a research note on Friday, February 27th. Three equities research analysts have rated the stock with a Buy rating, three have given a Hold rating and one has given a Sell rating to the stock. According to data from MarketBeat, the stock presently has an average rating of "Hold" and an average target price of $79.80.

Applied Optoelectronics Price Performance

The company has a debt-to-equity ratio of 0.18, a quick ratio of 3.03 and a current ratio of 3.83. The stock has a market capitalization of $14.50 billion, a P/E ratio of -273.81 and a beta of 3.67. The firm has a 50-day moving average price of $146.55 and a 200 day moving average price of $81.12.

Applied Optoelectronics (NASDAQ:AAOI - Get Free Report) last announced its quarterly earnings data on Thursday, May 7th. The semiconductor company reported ($0.07) EPS for the quarter, missing the consensus estimate of ($0.05) by ($0.02). The firm had revenue of $151.14 million for the quarter, compared to the consensus estimate of $156.98 million. Applied Optoelectronics had a negative net margin of 8.55% and a negative return on equity of 4.64%. Applied Optoelectronics's revenue for the quarter was up 51.3% compared to the same quarter last year. During the same quarter last year, the company posted ($0.02) earnings per share. Applied Optoelectronics has set its Q2 2026 guidance at -0.030-0.030 EPS. On average, analysts expect that Applied Optoelectronics, Inc. will post 0.6 EPS for the current year.

Insider Activity at Applied Optoelectronics

In related news, CEO Chih-Hsiang (Thompson) Lin sold 58,000 shares of the stock in a transaction dated Tuesday, May 19th. The stock was sold at an average price of $173.26, for a total transaction of $10,049,080.00. Following the completion of the sale, the chief executive officer directly owned 2,255,693 shares in the company, valued at $390,821,369.18. This represents a 2.51% decrease in their position. The sale was disclosed in a legal filing with the SEC, which is available through this link. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, Director Cynthia Delaney sold 56,575 shares of the stock in a transaction dated Tuesday, May 26th. The shares were sold at an average price of $189.23, for a total value of $10,705,687.25. Following the sale, the director owned 59,647 shares of the company's stock, valued at $11,287,001.81. This represents a 48.68% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. Insiders sold a total of 515,899 shares of company stock worth $69,774,638 over the last three months. Corporate insiders own 3.80% of the company's stock.

Institutional Investors Weigh In On Applied Optoelectronics

A number of large investors have recently made changes to their positions in the business. BankChampaign National Association bought a new stake in shares of Applied Optoelectronics in the 1st quarter worth approximately $284,000. Janus Henderson Group PLC grew its position in shares of Applied Optoelectronics by 23.2% in the 1st quarter. Janus Henderson Group PLC now owns 29,755 shares of the semiconductor company's stock worth $2,518,000 after buying an additional 5,600 shares during the last quarter. California State Teachers Retirement System grew its position in shares of Applied Optoelectronics by 23.2% in the 1st quarter. California State Teachers Retirement System now owns 70,464 shares of the semiconductor company's stock worth $5,961,000 after buying an additional 13,265 shares during the last quarter. Royal Bank of Canada grew its position in shares of Applied Optoelectronics by 2,075.3% in the 1st quarter. Royal Bank of Canada now owns 127,971 shares of the semiconductor company's stock worth $10,825,000 after buying an additional 122,088 shares during the last quarter. Finally, The Manufacturers Life Insurance Company grew its position in shares of Applied Optoelectronics by 3.7% in the 1st quarter. The Manufacturers Life Insurance Company now owns 32,125 shares of the semiconductor company's stock worth $2,717,000 after buying an additional 1,148 shares during the last quarter. 61.70% of the stock is currently owned by institutional investors.

Applied Optoelectronics Company Profile

Applied Optoelectronics, Inc develops and manufactures high-speed fiber-optic networking products designed to support the growing bandwidth demands of data centers, telecommunications carriers and internet content providers. The company's core offerings include pluggable optical transceiver modules, transponders and optical components that enable data transmission at rates ranging from 1G to 400G. These products are used to facilitate long-haul, metro and intra-data center connectivity, addressing the need for scalable, low-latency and energy-efficient solutions in modern network infrastructures.

The company's product portfolio spans small-form factor pluggable modules such as SFP+, QSFP+ and QSFP28 units, as well as more advanced form factors like CFP2 and OSFP for ultra-high-speed applications.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.