Applied Optoelectronics (NASDAQ:AAOI) Trading 10.7% Higher - Time to Buy?

Key Points

• Applied Optoelectronics shares surged by 10.7% to $23.08 in mid-day trading, although the trading volume dropped significantly to approximately 1.2 million shares.
• Various analysts have issued mixed ratings for AAOI, with a consensus average rating of "Hold" and a target price of $27.20, despite some upgrades setting higher targets.
• The company reported a quarterly loss of ($0.16) EPS, which missed expectations, albeit showing a 137.9% year-over-year revenue growth to $102.95 million.

Applied Optoelectronics, Inc. (NASDAQ:AAOI - Get Free Report)'s share price shot up 10.7% on Tuesday . The company traded as high as $22.91 and last traded at $23.08. 1,235,421 shares traded hands during mid-day trading, a decline of 72% from the average session volume of 4,381,393 shares. The stock had previously closed at $20.86.

Analysts Set New Price Targets

A number of brokerages have weighed in on AAOI. Wall Street Zen downgraded shares of Applied Optoelectronics from a "hold" rating to a "sell" rating in a report on Saturday, August 9th. Needham & Company LLC began coverage on shares of Applied Optoelectronics in a report on Friday, July 25th. They set a "buy" rating and a $32.00 price objective for the company. B. Riley reaffirmed a "neutral" rating and set a $15.00 price objective (up from $13.00) on shares of Applied Optoelectronics in a report on Friday, August 8th. Northland Securities set a $30.00 price objective on shares of Applied Optoelectronics in a report on Friday, August 8th. Finally, Raymond James Financial raised their price objective on shares of Applied Optoelectronics from $18.00 to $25.00 and gave the stock an "outperform" rating in a report on Friday, August 8th. One equities research analyst has rated the stock with a sell rating, two have issued a hold rating and four have issued a buy rating to the company's stock. According to MarketBeat.com, Applied Optoelectronics has an average rating of "Hold" and an average price target of $27.20.

Applied Optoelectronics Stock Up 6.4%

The stock has a market capitalization of $1.39 billion, a P/E ratio of -6.65 and a beta of 2.72. The firm's fifty day moving average is $23.91 and its 200-day moving average is $20.30. The company has a current ratio of 2.11, a quick ratio of 1.47 and a debt-to-equity ratio of 0.36.

Applied Optoelectronics (NASDAQ:AAOI - Get Free Report) last announced its quarterly earnings results on Thursday, August 7th. The semiconductor company reported ($0.16) earnings per share (EPS) for the quarter, missing the consensus estimate 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 firm had revenue of $102.95 million for the quarter, compared to the consensus estimate of $104.96 million. During the same period in the prior year, the business earned ($0.28) earnings per share. The company's revenue for the quarter was up 137.9% on a year-over-year basis. As a group, equities research analysts predict that Applied Optoelectronics, Inc. will post -1.18 earnings per share for the current year.

Insider Activity

In related news, CFO Stefan J. Murry sold 12,000 shares of Applied Optoelectronics stock in a transaction dated Friday, August 15th. The shares were sold at an average price of $22.37, for a total transaction of $268,440.00. Following the completion of the transaction, the chief financial officer directly owned 298,477 shares of the company's stock, valued at $6,676,930.49. This trade represents a 3.87% decrease in their position. The sale was disclosed in a document filed with the SEC, which is available at this hyperlink. Also, insider Hung-Lun (Fred) Chang sold 15,784 shares of the business's stock in a transaction dated Wednesday, August 13th. The stock was sold at an average price of $22.70, for a total transaction of $358,296.80. Following the completion of the transaction, the insider directly owned 256,326 shares of the company's stock, valued at approximately $5,818,600.20. This represents a 5.80% decrease in their ownership of the stock. The disclosure for this sale can be found here. Over the last ninety days, insiders purchased 44,100 shares of company stock worth $1,000,878 and sold 32,784 shares worth $741,217. Company insiders own 4.50% of the company's stock.

Institutional Trading of Applied Optoelectronics

Hedge funds and other institutional investors have recently modified their holdings of the stock. Nisa Investment Advisors LLC grew its position in shares of Applied Optoelectronics by 497.5% during the 2nd quarter. Nisa Investment Advisors LLC now owns 962 shares of the semiconductor company's stock worth $25,000 after buying an additional 801 shares during the period. AlphaQuest LLC lifted its stake in Applied Optoelectronics by 243.9% in the first quarter. AlphaQuest LLC now owns 2,297 shares of the semiconductor company's stock valued at $35,000 after buying an additional 1,629 shares in the last quarter. GAMMA Investing LLC lifted its stake in Applied Optoelectronics by 85.9% in the second quarter. GAMMA Investing LLC now owns 1,785 shares of the semiconductor company's stock valued at $46,000 after buying an additional 825 shares in the last quarter. Sterling Capital Management LLC lifted its stake in Applied Optoelectronics by 858.2% in the fourth quarter. Sterling Capital Management LLC now owns 1,284 shares of the semiconductor company's stock valued at $47,000 after buying an additional 1,150 shares in the last quarter. Finally, Pinpoint Asset Management Singapore Pte. Ltd. bought a new position in Applied Optoelectronics in the second quarter valued at approximately $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.