Applied Optoelectronics (NASDAQ:AAOI) Stock Price Up 11.5% - Should You Buy?

Key Points

• Applied Optoelectronics' stock experienced an 11.5% increase during mid-day trading, rising from a previous close of $23.72 to $26.44, with about 2.9 million shares traded.
• Analyst ratings for the company range from a "buy" with a $32.00 price target by Needham & Company to a "sell" rating from Wall Street Zen, resulting in a consensus of "Moderate Buy" and an average target price of $27.20.
• The company reported earnings of ($0.16) per share for the last quarter, missing analyst expectations, but showed a substantial year-over-year revenue increase of 137.9%.

Applied Optoelectronics, Inc. (NASDAQ:AAOI - Get Free Report)'s share price rose 11.5% during mid-day trading on Wednesday . The stock traded as high as $26.30 and last traded at $26.44. Approximately 2,947,873 shares traded hands during trading, a decline of 34% from the average daily volume of 4,446,481 shares. The stock had previously closed at $23.72.

Wall Street Analyst Weigh In

AAOI has been the subject of several recent analyst reports. Needham & Company LLC started coverage on shares of Applied Optoelectronics in a research report on Friday, July 25th. They set a "buy" rating and a $32.00 price objective for the company. Wolfe Research started coverage on shares of Applied Optoelectronics in a research report on Tuesday, July 8th. They issued a "peer perform" rating for the company. Wall Street Zen cut shares of Applied Optoelectronics from a "hold" rating to a "sell" rating in a research report on Saturday, August 9th. B. Riley reissued a "neutral" rating and issued a $15.00 price target (up from $13.00) on shares of Applied Optoelectronics in a research report on Friday, August 8th. Finally, Raymond James Financial boosted their price target on shares of Applied Optoelectronics from $18.00 to $25.00 and gave the company an "outperform" rating in a research report on Friday, August 8th. Four investment analysts have rated the stock with a Buy rating and two have given a Hold rating to the company. Based on data from MarketBeat, Applied Optoelectronics currently has a consensus rating of "Moderate Buy" and an average target price of $27.20.

Applied Optoelectronics Stock 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 $1.71 billion, a PE ratio of -8.22 and a beta of 2.91. The stock's fifty day simple moving average is $24.94 and its 200-day simple moving average is $19.84.

Applied Optoelectronics (NASDAQ:AAOI - Get Free Report) last issued its earnings results on Thursday, August 7th. The semiconductor company reported ($0.16) earnings per share (EPS) for the quarter, missing analysts' consensus estimates of ($0.08) by ($0.08). Applied Optoelectronics had a negative net margin of 42.29% and a negative return on equity of 10.60%. The company had revenue of $102.95 million during the quarter, compared to analysts' expectations of $104.96 million. During the same period last year, the business posted ($0.28) earnings per share. The company's quarterly revenue was up 137.9% on a year-over-year basis. Applied Optoelectronics has set its Q3 2025 guidance at -0.100--0.030 EPS. On average, research analysts predict that Applied Optoelectronics, Inc. will post -1.18 earnings per share for the current fiscal year.

Insider Buying and Selling

In other news, insider Hung-Lun (Fred) Chang sold 15,784 shares of the stock in a transaction that occurred on Wednesday, August 13th. The shares were sold at an average price of $22.70, for a total value of $358,296.80. Following the sale, the insider directly owned 256,326 shares in the company, valued at $5,818,600.20. This represents a 5.80% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available through the SEC website. Also, Director William H. Yeh purchased 14,000 shares of the stock in a transaction dated Wednesday, August 13th. The stock was acquired at an average price of $22.86 per share, for a total transaction of $320,040.00. Following the completion of the transaction, the director directly owned 249,819 shares of the company's stock, valued at approximately $5,710,862.34. The trade was a 5.94% increase in their ownership of the stock. The disclosure for this purchase can be found here. In the last 90 days, insiders bought 44,100 shares of company stock valued at $1,000,878 and sold 32,784 shares valued at $741,217. 4.50% of the stock is currently owned by corporate insiders.

Institutional Trading of Applied Optoelectronics

Several large investors have recently modified their holdings of the business. Rhumbline Advisers boosted its position in Applied Optoelectronics by 1.1% during the first quarter. Rhumbline Advisers now owns 61,017 shares of the semiconductor company's stock worth $937,000 after acquiring an additional 669 shares during the last quarter. Nisa Investment Advisors LLC boosted 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 acquiring an additional 801 shares during the last quarter. GAMMA Investing LLC boosted its position in Applied Optoelectronics by 85.9% during the second 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 last quarter. Corebridge Financial Inc. boosted its position in Applied Optoelectronics by 4.2% during the first quarter. Corebridge Financial Inc. now owns 21,096 shares of the semiconductor company's stock worth $324,000 after acquiring an additional 843 shares during the last quarter. Finally, Ameritas Investment Partners Inc. boosted its position in Applied Optoelectronics by 28.8% during the second quarter. Ameritas Investment Partners Inc. now owns 5,488 shares of the semiconductor company's stock worth $141,000 after acquiring an additional 1,226 shares during the last quarter. 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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