Applied Optoelectronics (NASDAQ:AAOI) Shares Gap Down - What's Next?

Key Points

• Applied Optoelectronics shares fell 7.4%, opening at $96.77 after a prior close of $105.36. The stock remains well below its 50-day and 200-day moving averages.
• Analyst sentiment is mixed, with three Buy, two Hold and one Sell rating. The consensus rating is Hold, with an average price target of $139.40, while recent targets range from $178 to $220.
• The company exceeded quarterly expectations, reporting $0.06 in EPS versus $0.02 expected and $191.92 million in revenue, up 86.3% year over year. However, it posted a negative net margin, and insiders have sold 98,501 shares worth approximately $14 million over the past 90 days.

Shares of Applied Optoelectronics, Inc. (NASDAQ:AAOI - Get Free Report) gapped down before the market opened on Monday . The stock had previously closed at $105.36, but opened at $96.77. Applied Optoelectronics shares last traded at $98.6770, with a volume of 1,814,360 shares changing hands.

Wall Street Analyst Weigh In

Several analysts have issued reports on the stock. B. Riley Financial reissued a "neutral" rating on shares of Applied Optoelectronics in a research note on Friday, August 7th. Raymond James Financial reaffirmed an "outperform" rating and issued a $178.00 target price on shares of Applied Optoelectronics in a research report on Tuesday, August 11th. Weiss Ratings lowered Applied Optoelectronics from a "sell (d-)" rating to a "sell (e+)" rating in a research report on Monday, August 17th. Rosenblatt Securities reissued a "buy" rating and issued a $220.00 price objective on shares of Applied Optoelectronics in a research note on Friday, August 7th. Finally, Needham & Company LLC cut their target price on shares of Applied Optoelectronics from $220.00 to $190.00 and set a "buy" rating for the company in a research report on Friday, August 7th. Three analysts have rated the stock with a Buy rating, two have issued a Hold rating and one has issued a Sell rating to the company. According to data from MarketBeat, the stock currently has an average rating of "Hold" and a consensus target price of $139.40.

Applied Optoelectronics Trading Down 7.4%

The company has a current ratio of 2.78, a quick ratio of 2.13 and a debt-to-equity ratio of 0.12. The company has a fifty day moving average of $114.43 and a two-hundred day moving average of $131.91. The stock has a market capitalization of $8.25 billion, a price-to-earnings ratio of -124.91 and a beta of 3.79.

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

Insider Activity at Applied Optoelectronics

In related news, insider Hung-Lun Chang sold 40,329 shares of the company's stock in a transaction on Wednesday, June 17th. The shares were sold at an average price of $170.60, for a total transaction of $6,880,127.40. Following the completion of the transaction, the insider directly owned 286,124 shares in the company, valued at $48,812,754.40. This represents a 12.35% decrease in their position. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CFO Stefan Murry sold 4,000 shares of the company's stock in a transaction dated Thursday, September 10th. The shares were sold at an average price of $105.33, for a total transaction of $421,320.00. Following the transaction, the chief financial officer directly owned 367,168 shares of the company's stock, valued at $38,673,805.44. This represents a 1.08% decrease in their position. 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 98,501 shares of company stock worth $14,003,877 in the last ninety days. 3.80% of the stock is currently owned by insiders.

Institutional Inflows and Outflows

Several hedge funds have recently added to or reduced their stakes in the business. Allworth Financial LP raised its holdings in shares of Applied Optoelectronics by 1,923.7% in the 4th quarter. Allworth Financial LP now owns 769 shares of the semiconductor company's stock worth $27,000 after buying an additional 731 shares in the last quarter. Comerica Bank acquired a new position in Applied Optoelectronics during the 3rd quarter worth about $28,000. Northwestern Mutual Wealth Management Co. grew its holdings in Applied Optoelectronics by 166.7% during the 4th quarter. Northwestern Mutual Wealth Management Co. now owns 1,200 shares of the semiconductor company's stock worth $42,000 after acquiring an additional 750 shares during the last quarter. EFG International AG bought a new stake in Applied Optoelectronics during the 2nd quarter worth about $44,000. Finally, Persistent Asset Partners Ltd acquired a new stake in Applied Optoelectronics in the 2nd quarter valued at about $47,000. Institutional investors and hedge funds own 61.70% of the company's stock.

About Applied Optoelectronics

Applied Optoelectronics, Inc develops and manufactures fiber-optic networking products and components. Its offerings include optical transceivers, transponders, modules and related equipment used to transmit data over fiber-optic networks.

The company serves several communications markets, including data centers, telecommunications, broadband access and cable television. Its products support applications such as high-speed data transmission, cloud computing, network infrastructure and fiber-based broadband services.

Founded in 1997 and headquartered in Sugar Land, Texas, Applied Optoelectronics serves customers in North America, Asia and other international markets.

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