Applied Optoelectronics (NASDAQ:AAOI) Shares Up 11.2% - Time to Buy?

Key Points

• Applied Optoelectronics shares jumped 11.2% in midday trading Monday, reaching as high as $189.60 before last trading around $188.06. Trading volume was below average, with about 4.9 million shares changing hands versus a 10.4 million average.
• Analyst sentiment remains mixed: recent rating changes included upgrades and downgrades, but the overall consensus from MarketBeat is Hold with a consensus price target of $79.80. Individual targets ranged from $50 to $80.
• The company recently posted mixed quarterly results, missing EPS and revenue estimates even as revenue rose 51.3% year over year. Insider selling has also been notable, with directors selling shares in recent weeks and insiders offloading 298,833 shares over the last 90 days.

Shares of Applied Optoelectronics, Inc. (NASDAQ:AAOI - Get Free Report) shot up 11.2% during mid-day trading on Monday . The company traded as high as $189.60 and last traded at $188.0550. 4,910,508 shares were traded during mid-day trading, a decline of 53% from the average session volume of 10,387,596 shares. The stock had previously closed at $169.05.

Wall Street Analyst Weigh In

A number of brokerages have recently weighed in on AAOI. B. Riley Financial raised 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. Rosenblatt Securities reissued a "buy" rating and set a $50.00 price target on shares of Applied Optoelectronics in a research report on Thursday, February 19th. Wall Street Zen cut shares of Applied Optoelectronics from a "hold" rating to a "sell" rating in a research report on Monday, April 13th. Northland Securities reissued a "market perform" rating and set a $55.00 price target on shares of Applied Optoelectronics in a research report on Friday, February 27th. Finally, Needham & Company LLC lifted their price target on shares of Applied Optoelectronics from $43.00 to $80.00 and gave the stock a "buy" rating in a research report on Friday, February 27th. Three equities research analysts have rated the stock with a Buy rating, three have issued a Hold rating and one has assigned a Sell rating to the company. According to data from MarketBeat, the company presently has a consensus rating of "Hold" and a consensus price target of $79.80.

Applied Optoelectronics Stock Performance

The stock's 50 day moving average is $163.82 and its two-hundred day moving average is $92.48. The stock has a market capitalization of $15.47 billion, a price-to-earnings ratio of -292.78 and a beta of 3.66. The company has a current ratio of 3.83, a quick ratio of 3.03 and a debt-to-equity ratio of 0.18.

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

Insider Transactions at Applied Optoelectronics

In other Applied Optoelectronics news, Director Min-Chu (Mike) Chen sold 8,247 shares of Applied Optoelectronics stock in a transaction on Tuesday, June 2nd. The shares were sold at an average price of $201.00, for a total value of $1,657,647.00. Following the sale, the director directly owned 161,053 shares in the company, valued at approximately $32,371,653. The trade was a 4.87% decrease in their position. The sale was disclosed in a filing with the Securities & Exchange Commission, which is accessible through this link. Also, Director Cynthia Delaney sold 56,575 shares of the business's stock in a transaction dated Tuesday, May 26th. The stock was sold at an average price of $189.23, for a total transaction of $10,705,687.25. Following the transaction, the director owned 59,647 shares in the company, valued at $11,287,001.81. This represents a 48.68% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. In the last ninety days, insiders sold 298,833 shares of company stock worth $51,058,370. 3.80% of the stock is owned by insiders.

Institutional Inflows and Outflows

Several institutional investors have recently modified their holdings of the company. Vanguard Group Inc. increased its stake in shares of Applied Optoelectronics by 7.7% during the 4th quarter. Vanguard Group Inc. now owns 4,982,660 shares of the semiconductor company's stock worth $173,696,000 after purchasing an additional 358,090 shares during the last quarter. Invesco Ltd. boosted its holdings in shares of Applied Optoelectronics by 5,208.9% during the 4th quarter. Invesco Ltd. now owns 3,512,309 shares of the semiconductor company's stock worth $122,439,000 after buying an additional 3,446,150 shares during the period. Price T Rowe Associates Inc. MD boosted its holdings in shares of Applied Optoelectronics by 5,321.6% during the 4th quarter. Price T Rowe Associates Inc. MD now owns 2,229,757 shares of the semiconductor company's stock worth $77,730,000 after buying an additional 2,188,630 shares during the period. Hawk Ridge Capital Management LP boosted its holdings in shares of Applied Optoelectronics by 106.2% during the 4th quarter. Hawk Ridge Capital Management LP now owns 1,700,900 shares of the semiconductor company's stock worth $59,293,000 after buying an additional 875,903 shares during the period. Finally, Morgan Stanley lifted its stake in Applied Optoelectronics by 157.1% in the 4th quarter. Morgan Stanley now owns 1,699,855 shares of the semiconductor company's stock valued at $59,257,000 after purchasing an additional 1,038,775 shares during the last quarter. 61.70% of the stock is currently owned by institutional investors and hedge funds.

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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