Applied Optoelectronics (NASDAQ:AAOI) Shares Gap Down - Here's What Happened

Key Points

• Applied Optoelectronics shares fell sharply, opening at $71.86 versus the prior close of $79.19 and trading down about 15.3%.
• Analyst sentiment remains mixed: the stock has an average “Hold” rating and a consensus price target of $143, despite targets ranging from $92 to $220.
• The company reported quarterly revenue of $191.92 million and adjusted earnings of $0.06 per share, beating estimates, while revenue increased 86.3% year over year; insiders have sold roughly $6.6 million of stock over the past quarter.

Applied Optoelectronics, Inc. (NASDAQ:AAOI - Get Free Report) gapped down before the market opened on Friday. The stock had previously closed at $79.19, but opened at $71.86. Applied Optoelectronics shares last traded at $71.8820, with a volume of 1,712,613 shares.

Analysts Set New Price Targets

Several research firms have commented on AAOI. Rosenblatt Securities reaffirmed a "buy" rating and set a $220.00 price objective on shares of Applied Optoelectronics in a research note on Friday, August 7th. Weiss Ratings raised Applied Optoelectronics from a "sell (e+)" rating to a "sell (d-)" rating in a report on Wednesday, October 21st. Needham & Company LLC dropped their price objective on shares of Applied Optoelectronics from $190.00 to $170.00 and set a "buy" rating for the company in a research note on Tuesday. Raymond James Financial restated an "outperform" rating and issued a $178.00 target price on shares of Applied Optoelectronics in a report on Tuesday, August 11th. Finally, B. Riley Financial dropped their target price on Applied Optoelectronics from $109.00 to $92.00 and set a "neutral" rating for the company in a research note on Thursday, October 15th. Three equities research analysts have rated the stock with a Buy rating, two have issued a Hold rating and one has assigned a Sell rating to the company's stock. According to MarketBeat.com, Applied Optoelectronics has an average rating of "Hold" and a consensus price target of $143.00.

Applied Optoelectronics Trading Down 15.3%

The firm has a market capitalization of $5.67 billion, a price-to-earnings ratio of -85.42 and a beta of 3.85. The company has a debt-to-equity ratio of 0.12, a quick ratio of 2.13 and a current ratio of 2.78. The business has a fifty day moving average price of $99.96 and a 200 day moving average price of $112.57.

Applied Optoelectronics (NASDAQ:AAOI - Get Free Report) last issued its earnings results on Thursday, August 6th. The semiconductor company reported $0.06 earnings per share for the quarter, beating analysts' consensus estimates of $0.02 by $0.04. Applied Optoelectronics had a negative return on equity of 1.98% and a negative net margin of 9.57%. The firm had revenue of $191.92 million for the quarter, compared to analysts' expectations of $190.48 million. During the same quarter last year, the firm earned ($0.16) earnings per share. The firm's revenue for the quarter was up 86.3% compared to the same quarter last year. Applied Optoelectronics has set its Q3 2026 guidance at 0.110-0.260 EPS. As a group, equities analysts forecast that Applied Optoelectronics, Inc. will post 0.55 earnings per share for the current year.

Insider Activity at Applied Optoelectronics

In related news, CFO Stefan J. Murry sold 4,000 shares of the company's stock in a transaction on Monday, October 12th. The shares were sold at an average price of $102.87, for a total transaction of $411,480.00. Following the completion of the sale, the chief financial officer directly owned 363,168 shares of the company's stock, valued at approximately $37,359,092.16. This represents a 1.09% decrease in their position. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is accessible through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, insider Hung-Lun Chang sold 32,172 shares of the stock in a transaction on Tuesday, September 8th. The shares were sold at an average price of $110.21, for a total value of $3,545,676.12. Following the completion of the sale, the insider owned 249,276 shares of the company's stock, valued at approximately $27,472,707.96. This represents a 11.43% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. Over the last quarter, insiders have sold 56,887 shares of company stock worth $6,581,484. Company insiders own 3.80% of the company's stock.

Institutional Inflows and Outflows

A number of hedge funds and other institutional investors have recently modified their holdings of AAOI. BlackRock Inc. purchased a new stake in shares of Applied Optoelectronics during the 2nd quarter valued at about $955,672,000. Renaissance Technologies LLC purchased a new position in Applied Optoelectronics in the 1st quarter worth approximately $47,817,000. William Blair Investment Management LLC acquired a new stake in Applied Optoelectronics in the second quarter valued at approximately $74,703,000. Bank of America Corp DE acquired a new stake in Applied Optoelectronics in the second quarter valued at approximately $33,712,000. Finally, Bank of New York Mellon Corp purchased a new stake in shares of Applied Optoelectronics during the second quarter valued at approximately $32,567,000. Institutional investors and hedge funds own 61.70% of the company's stock.

Applied Optoelectronics Company Profile

Applied Optoelectronics, Inc NASDAQ: AAOI develops and manufactures fiber-optic networking products and solutions. Its offerings include optical transceivers, transmitters, receivers, lasers, and related components used to transmit data across fiber-optic networks.

The company serves several communications markets, including data centers, broadband access networks, cable television, and telecommunications. Its products are designed for applications such as high-speed data transmission, fiber-to-the-home and other broadband deployments, network connectivity, and communications infrastructure.

Founded in 1997 and headquartered in Sugar Land, Texas, Applied Optoelectronics supports customers in multiple regions, including North America, Asia, and other international markets.

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