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

Key Points

• AAOI shares fell sharply at the open: The stock opened at $51.12 after closing at $55.86, and was last reported trading at $52.04 on volume of about 2.56 million shares.
• Analyst views are mixed: MarketBeat reports a “Moderate Buy” consensus and an average price target of $111.60, while recent target changes ranged from B. Riley’s cut to $45 to Needham’s revised $100 target.
• Quarterly results topped estimates: Applied Optoelectronics reported EPS of $0.17 versus a $0.14 consensus and revenue of $269.88 million, up 127.5% year over year.

Applied Optoelectronics, Inc. (NASDAQ:AAOI - Get Free Report)'s share price gapped down prior to trading on Thursday. The stock had previously closed at $55.86, but opened at $51.12. Applied Optoelectronics shares last traded at $52.0390, with a volume of 2,561,814 shares traded.

Wall Street Analysts Forecast Growth

A number of brokerages recently issued reports on AAOI. Raymond James Financial reissued an "outperform" rating and set a $178.00 price target on shares of Applied Optoelectronics in a research report on Tuesday, August 11th. Weiss Ratings upgraded shares of Applied Optoelectronics from a "sell (e+)" rating to a "sell (d-)" rating in a report on Wednesday, October 21st. B. Riley Financial cut their price objective on shares of Applied Optoelectronics from $92.00 to $45.00 and set a "neutral" rating on the stock in a report on Friday, November 6th. Wall Street Zen raised shares of Applied Optoelectronics from a "sell" rating to a "hold" rating in a research note on Saturday, August 8th. Finally, Needham & Company LLC lowered their target price on shares of Applied Optoelectronics from $170.00 to $100.00 and set a "buy" rating for the company in a report on Friday, November 6th. Four research analysts have rated the stock with a Buy rating, one has assigned a Hold rating and one has assigned a Sell rating to the stock. According to data from MarketBeat.com, the company has an average rating of "Moderate Buy" and a consensus price target of $111.60.

Applied Optoelectronics Stock Performance

The company has a debt-to-equity ratio of 0.10, a current ratio of 2.34 and a quick ratio of 1.77. The business has a 50 day moving average price of $89.74 and a 200 day moving average price of $113.47. The stock has a market capitalization of $4.96 billion, a PE ratio of -127.00 and a beta of 4.04.

Applied Optoelectronics (NASDAQ:AAOI - Get Free Report) last posted its quarterly earnings results on Thursday, November 5th. The semiconductor company reported $0.17 earnings per share (EPS) for the quarter, topping the consensus estimate of $0.14 by $0.03. Applied Optoelectronics had a negative return on equity of 0.17% and a negative net margin of 4.39%. The firm had revenue of $269.88 million during the quarter, compared to analyst estimates of $268.11 million. During the same quarter in the previous year, the firm earned ($0.09) EPS. Applied Optoelectronics's quarterly revenue was up 127.5% compared to the same quarter last year. As a group, equities research analysts expect that Applied Optoelectronics, Inc. will post 0.55 earnings per share for the current year.

Insider Buying and Selling

In related news, insider Hung-Lun Chang sold 32,172 shares of the company's stock in a transaction that occurred on Tuesday, September 8th. The stock was sold at an average price of $110.21, for a total value of $3,545,676.12. Following the transaction, the insider directly owned 249,276 shares of the company's stock, valued at approximately $27,472,707.96. This represents a 11.43% decrease in their position. The transaction was disclosed in a legal filing with the SEC, which can be accessed through this hyperlink. Also, CFO Stefan Murry sold 4,000 shares of the stock in a transaction on Monday, October 12th. The shares were sold at an average price of $102.87, for a total value of $411,480.00. Following the sale, the chief financial officer owned 363,168 shares in the company, valued at approximately $37,359,092.16. This represents a 1.09% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders sold a total of 52,172 shares of company stock worth $5,985,036 in the last three months. 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. Polaris Financial Partners purchased a new position in Applied Optoelectronics in the 3rd quarter worth about $26,000. Jacobi Capital Management LLC purchased a new position in shares of Applied Optoelectronics during the third quarter valued at approximately $33,000. EFG International AG bought a new position in Applied Optoelectronics during the second quarter valued at approximately $44,000. Persistent Asset Partners Ltd bought a new position in Applied Optoelectronics during the second quarter valued at approximately $47,000. Finally, Fiduciary Financial Advisors purchased a new stake in Applied Optoelectronics in the second quarter worth approximately $48,000. 61.70% of the stock is owned by institutional investors.

Applied Optoelectronics Company Profile

Applied Optoelectronics, Inc. designs and manufactures fiber-optic networking products used to transmit data over cable, telecommunications and data center networks. Its offerings include optical transceivers and other optical components and equipment. The company serves customers in markets including broadband access, telecommunications and data centers. Founded in 1997 and headquartered in Sugar Land, Texas, Applied Optoelectronics has operations in the United States and Asia and serves customers internationally.

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