Applied Optoelectronics (NASDAQ:AAOI) Trading Down 6.7% - Here's Why

Key Points

• Applied Optoelectronics experienced a significant stock drop of 6.7%, closing at $20.15 after trading on Monday.
• Analysts have varied ratings on the stock, with a consensus target price of $27.20 and several price targets updated, ranging from $15.00 to $34.00.
• The company reported a negative earnings per share of ($0.16), missing analyst expectations, despite a year-over-year revenue increase of 137.9%.

Applied Optoelectronics, Inc. (NASDAQ:AAOI - Get Free Report)'s share price was down 6.7% during trading on Monday . The stock traded as low as $20.15 and last traded at $20.15. Approximately 1,351,524 shares changed hands during mid-day trading, a decline of 69% from the average daily volume of 4,369,183 shares. The stock had previously closed at $21.59.

Analysts Set New Price Targets

AAOI has been the topic of a number of analyst reports. Raymond James Financial set a $25.00 price objective on shares of Applied Optoelectronics and gave the stock an "outperform" rating in a research note on Friday, August 8th. Wolfe Research initiated coverage on shares of Applied Optoelectronics in a research report on Tuesday, July 8th. They set a "peer perform" rating on the stock. Needham & Company LLC initiated coverage on shares of Applied Optoelectronics in a report on Friday, July 25th. They issued a "buy" rating and a $32.00 price objective for the company. Wall Street Zen lowered shares of Applied Optoelectronics from a "hold" rating to a "sell" rating in a research note on Saturday, August 9th. Finally, Northland Securities set a $30.00 target price on Applied Optoelectronics in a research report on Friday, August 8th. One investment analyst has rated the stock with a sell rating, two have issued a hold rating and four have given a buy rating to the stock. Based on data from MarketBeat, the company presently has a consensus rating of "Hold" and a consensus target price of $27.20.

Applied Optoelectronics Price Performance

The company has a quick ratio of 1.47, a current ratio of 2.11 and a debt-to-equity ratio of 0.36. The company has a market capitalization of $1.39 billion, a price-to-earnings ratio of -6.65 and a beta of 2.72. The stock's 50-day simple moving average is $23.91 and its two-hundred day simple moving average is $20.30.

Applied Optoelectronics (NASDAQ:AAOI - Get Free Report) last released its quarterly earnings results on Thursday, August 7th. The semiconductor company reported ($0.16) earnings per share for the quarter, missing the consensus estimate of ($0.08) by ($0.08). The company had revenue of $102.95 million for the quarter, compared to analyst estimates of $104.96 million. Applied Optoelectronics had a negative return on equity of 10.60% and a negative net margin of 42.29%. The firm's revenue for the quarter was up 137.9% on a year-over-year basis. During the same quarter last year, the company earned ($0.28) EPS. Equities research analysts predict that Applied Optoelectronics, Inc. will post -1.18 earnings per share for the current year.

Insiders Place Their Bets

In other news, CEO Chih-Hsiang (Thompson) Lin purchased 8,850 shares of the company's stock in a transaction that occurred on Wednesday, August 13th. The stock was purchased at an average cost of $22.53 per share, for a total transaction of $199,390.50. Following the completion of the transaction, the chief executive officer owned 1,652,165 shares of the company's stock, valued at $37,223,277.45. This trade represents a 0.54% increase in their ownership of the stock. The purchase was disclosed in a filing with the SEC, which is available through the SEC website. Also, Director Min-Chu (Mike) Chen acquired 7,500 shares of Applied Optoelectronics stock in a transaction that occurred on Wednesday, August 13th. The stock was purchased at an average cost of $22.91 per share, with a total value of $171,825.00. Following the completion of the purchase, the director owned 22,500 shares in the company, valued at $515,475. The trade was a 50.00% increase in their position. The disclosure for this purchase can be found here. Over the last 90 days, insiders have bought 44,100 shares of company stock valued at $1,000,878 and have sold 32,784 shares valued at $741,217. 4.50% of the stock is owned by insiders.

Institutional Trading of Applied Optoelectronics

A number of hedge funds have recently bought and sold shares of AAOI. Nisa Investment Advisors LLC lifted its position in Applied Optoelectronics by 497.5% during the second quarter. Nisa Investment Advisors LLC now owns 962 shares of the semiconductor company's stock worth $25,000 after buying an additional 801 shares in the last quarter. Sterling Capital Management LLC increased its stake in shares of Applied Optoelectronics by 858.2% in the 4th quarter. Sterling Capital Management LLC now owns 1,284 shares of the semiconductor company's stock worth $47,000 after acquiring an additional 1,150 shares during the last quarter. Canada Pension Plan Investment Board acquired a new stake in shares of Applied Optoelectronics in the 4th quarter worth $63,000. GAMMA Investing LLC raised its holdings in shares of Applied Optoelectronics by 85.9% during the 2nd quarter. GAMMA Investing LLC now owns 1,785 shares of the semiconductor company's stock worth $46,000 after acquiring an additional 825 shares during the period. Finally, Pinpoint Asset Management Singapore Pte. Ltd. acquired a new position in shares of Applied Optoelectronics during the 2nd quarter valued at about $49,000. Institutional investors and hedge funds own 61.72% of the company's stock.

About Applied Optoelectronics

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.