Applied Optoelectronics (NASDAQ:AAOI) Trading Up 10.7% - Still a 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) shares were up 10.7% during mid-day trading on Tuesday . The stock traded as high as $22.91 and last traded at $23.08. Approximately 1,235,421 shares traded hands during trading, a decline of 72% from the average daily volume of 4,381,393 shares. The stock had previously closed at $20.86.

Analyst Upgrades and Downgrades

A number of research analysts have recently commented on AAOI shares. Rosenblatt Securities boosted their target price on shares of Applied Optoelectronics from $30.00 to $34.00 and gave the stock a "buy" rating in a research report on Thursday, June 26th. Wolfe Research initiated coverage on shares of Applied Optoelectronics in a report on Tuesday, July 8th. They set a "peer perform" rating on the stock. Wall Street Zen lowered shares of Applied Optoelectronics from a "hold" rating to a "sell" rating in a research report on Saturday. Raymond James Financial set a $25.00 target price on shares of Applied Optoelectronics and gave the company an "outperform" rating in a research report on Friday. Finally, Northland Securities set a $30.00 target price on shares of Applied Optoelectronics in a research report on Friday. One investment analyst has rated the stock with a sell rating, two have given a hold rating and four have issued a buy rating to the company's stock. According to MarketBeat, the stock has an average rating of "Hold" and a consensus target price of $27.20.

Applied Optoelectronics Stock Performance

The stock has a 50-day moving average of $23.46 and a 200 day moving average of $20.32. The company has a debt-to-equity ratio of 0.36, a current ratio of 2.11 and a quick ratio of 1.47. The stock has a market capitalization of $1.47 billion, a price-to-earnings ratio of -6.97 and a beta of 2.72.

Applied Optoelectronics (NASDAQ:AAOI - Get Free Report) last released its earnings results on Thursday, August 7th. The semiconductor company reported ($0.16) 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 during the quarter, compared to the consensus estimate of $104.96 million. During the same quarter in the previous year, the firm posted ($0.28) EPS. The company's revenue was up 137.9% on a year-over-year basis. On average, analysts expect that Applied Optoelectronics, Inc. will post -1.18 EPS for the current year.

Insiders Place Their Bets

In other Applied Optoelectronics news, CFO Stefan J. Murry sold 3,000 shares of the stock in a transaction on Wednesday, July 16th. The stock was sold at an average price of $27.46, for a total transaction of $82,380.00. Following the transaction, the chief financial officer owned 318,036 shares in the company, valued at $8,733,268.56. This trade represents a 0.93% decrease in their position. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is available at this hyperlink. Also, insider David C. Kuo sold 11,426 shares of the company's stock in a transaction dated Wednesday, May 14th. The stock was sold at an average price of $19.10, for a total transaction of $218,236.60. Following the sale, the insider directly owned 153,900 shares of the company's stock, valued at $2,939,490. This represents a 6.91% decrease in their position. The disclosure for this sale can be found here. In the last 90 days, insiders sold 16,426 shares of company stock worth $332,717. 4.50% of the stock is owned by company insiders.

Hedge Funds Weigh In On Applied Optoelectronics

A number of hedge funds have recently made changes to their positions in the stock. Nisa Investment Advisors LLC increased its holdings in Applied Optoelectronics by 497.5% in the second quarter. Nisa Investment Advisors LLC now owns 962 shares of the semiconductor company's stock worth $25,000 after purchasing an additional 801 shares in the last quarter. AlphaQuest LLC grew its holdings in Applied Optoelectronics by 243.9% during the first quarter. AlphaQuest LLC now owns 2,297 shares of the semiconductor company's stock worth $35,000 after buying an additional 1,629 shares in the last quarter. GAMMA Investing LLC lifted its holdings 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 period. Sterling Capital Management LLC grew its stake in Applied Optoelectronics by 858.2% in the 4th quarter. Sterling Capital Management LLC now owns 1,284 shares of the semiconductor company's stock valued at $47,000 after purchasing an additional 1,150 shares during the period. Finally, CWM LLC grew its stake in Applied Optoelectronics by 175.5% in the 2nd quarter. CWM LLC now owns 2,218 shares of the semiconductor company's stock valued at $57,000 after purchasing an additional 1,413 shares during the period. 61.72% of the stock is currently owned by institutional investors.

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.

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