Applied Optoelectronics (NASDAQ:AAOI) Shares Gap Down - Should You Sell?

Key Points

• Shares of Applied Optoelectronics gapped down before trading, opening at $153.10 (prior close $162.17) and last trading near $146.89 on about 2.88 million shares.
• Analyst coverage is mixed with an average rating of Hold and a consensus price target of $52.80, well below the current share price (individual targets cluster around $50–$55).
• The company beat quarterly EPS (‑$0.01 vs. est. ‑$0.12) and saw revenue rise 33.9% YoY, but remains unprofitable with negative margins and Q1 guidance of ‑0.09 to 0.00 EPS, while insiders have sold significant stakes ( ~326,333 shares, ~$29.8M in the last 90 days).

Applied Optoelectronics, Inc. (NASDAQ:AAOI - Get Free Report)'s share price gapped down prior to trading on Monday . The stock had previously closed at $162.17, but opened at $153.10. Applied Optoelectronics shares last traded at $146.8940, with a volume of 2,875,159 shares changing hands.

Wall Street Analyst Weigh In

Several research analysts have recently weighed in on the stock. 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. Weiss Ratings reiterated a "sell (d-)" rating on shares of Applied Optoelectronics in a research note on Wednesday, January 21st. Northland Securities reiterated a "market perform" rating and set a $55.00 price objective on shares of Applied Optoelectronics in a research note on Friday, February 27th. Wall Street Zen downgraded shares of Applied Optoelectronics from a "hold" rating to a "sell" rating in a research note on Monday, April 13th. Finally, B. Riley Financial upgraded shares of Applied Optoelectronics from a "sell" rating to a "neutral" rating and set a $54.00 price target on the stock in a research report on Friday, February 27th. Three analysts have rated the stock with a Buy rating, three have given a Hold rating and one has assigned a Sell rating to the company's stock. Based on data from MarketBeat.com, the stock has an average rating of "Hold" and a consensus target price of $52.80.

Applied Optoelectronics Stock Performance

The firm has a 50 day moving average of $104.04 and a 200-day moving average of $58.19. The stock has a market capitalization of $11.45 billion, a PE ratio of -223.08 and a beta of 3.23. The company has a debt-to-equity ratio of 0.18, a quick ratio of 1.91 and a current ratio of 2.63.

Applied Optoelectronics (NASDAQ:AAOI - Get Free Report) last announced its quarterly earnings data on Thursday, February 26th. The semiconductor company reported ($0.01) EPS for the quarter, beating analysts' consensus estimates of ($0.12) by $0.11. The firm had revenue of $134.27 million for the quarter, compared to the consensus estimate of $131.56 million. Applied Optoelectronics had a negative net margin of 8.39% and a negative return on equity of 5.29%. The firm's revenue was up 33.9% on a year-over-year basis. During the same period in the previous year, the firm posted ($0.02) earnings per share. Applied Optoelectronics has set its Q1 2026 guidance at -0.090-0.000 EPS. Research analysts forecast that Applied Optoelectronics, Inc. will post 0.66 earnings per share for the current year.

Insider Transactions at Applied Optoelectronics

In related news, insider David C. Kuo sold 29,000 shares of Applied Optoelectronics stock in a transaction that occurred on Thursday, March 19th. The shares were sold at an average price of $100.13, for a total transaction of $2,903,770.00. Following the transaction, the insider owned 82,663 shares of the company's stock, valued at $8,277,046.19. This trade represents a 25.97% decrease in their position. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which can be accessed through this link. Also, CFO Stefan J. Murry sold 4,000 shares of Applied Optoelectronics stock in a transaction that occurred on Friday, April 10th. The stock was sold at an average price of $136.50, for a total transaction of $546,000.00. Following the transaction, the chief financial officer directly owned 276,070 shares in the company, valued at $37,683,555. The trade was a 1.43% decrease in their position. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. In the last ninety days, insiders have sold 326,333 shares of company stock worth $29,802,706. Corporate insiders own 4.50% of the company's stock.

Institutional Trading of Applied Optoelectronics

Several institutional investors and hedge funds have recently bought and sold shares of the business. Allworth Financial LP raised its position in shares of Applied Optoelectronics by 1,923.7% in the fourth quarter. Allworth Financial LP now owns 769 shares of the semiconductor company's stock valued at $27,000 after purchasing an additional 731 shares during the period. Comerica Bank bought a new position in shares of Applied Optoelectronics in the third quarter valued at about $28,000. Northwestern Mutual Wealth Management Co. raised its position in shares of Applied Optoelectronics by 166.7% in the fourth quarter. Northwestern Mutual Wealth Management Co. now owns 1,200 shares of the semiconductor company's stock valued at $42,000 after purchasing an additional 750 shares during the period. Kohmann Bosshard Financial Services LLC bought a new position in shares of Applied Optoelectronics in the fourth quarter valued at about $55,000. Finally, Headlands Technologies LLC bought a new position in shares of Applied Optoelectronics in the second quarter valued at about $57,000. Institutional investors own 61.70% of the company's stock.

About Applied Optoelectronics

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.

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