Applied Optoelectronics (NASDAQ:AAOI) Stock Falls 11.8% on Insider Selling

Key Points

• Applied Optoelectronics shares fell 11.8% to $86.22 after CFO Stefan Murry sold 4,000 shares for approximately $411,480 under a pre-arranged Rule 10b5-1 trading plan. Trading volume rose about 40% above the average.
• Analyst sentiment is mixed, with three Buy, two Hold and one Sell rating; the stock has an overall “Hold” consensus and a $139.40 average price target.
• The company reported quarterly EPS of $0.06, beating estimates of $0.02, while revenue rose 86.3% year over year to $191.92 million. However, Applied Optoelectronics remains unprofitable, with a negative net margin of 9.57%.

Applied Optoelectronics, Inc. (NASDAQ:AAOI - Get Free Report)'s share price fell 11.8% on Wednesday after an insider sold shares in the company. The stock traded as low as $85.76 and last traded at $86.22. Approximately 14,519,984 shares traded hands during mid-day trading, an increase of 40% from the average session volume of 10,339,997 shares. The stock had previously closed at $97.78.

Specifically, CFO Stefan Murry sold 4,000 shares of the company's stock in a transaction on Monday, October 12th. The stock was 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 in the company, valued at approximately $37,359,092.16. This represents a 1.09% decrease in their position. The transaction was disclosed in a legal filing with the SEC, which can be accessed through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan.

Analyst Upgrades and Downgrades

AAOI has been the topic of a number of recent analyst reports. Wall Street Zen upgraded Applied Optoelectronics from a "sell" rating to a "hold" rating in a research report on Saturday, August 8th. Needham & Company LLC decreased their target price on shares of Applied Optoelectronics from $220.00 to $190.00 and set a "buy" rating on the stock in a report on Friday, August 7th. Weiss Ratings cut shares of Applied Optoelectronics from a "sell (d-)" rating to a "sell (e+)" rating in a research report on Monday, August 17th. Rosenblatt Securities reaffirmed a "buy" rating and set a $220.00 price target on shares of Applied Optoelectronics in a report on Friday, August 7th. Finally, Raymond James Financial reiterated an "outperform" rating and set a $178.00 price target on shares of Applied Optoelectronics in a research report on Tuesday, August 11th. Three equities research analysts have rated the stock with a Buy rating, two have assigned a Hold rating and one has given a Sell rating to the company's stock. According to MarketBeat, the company presently has an average rating of "Hold" and a consensus price target of $139.40.

Applied Optoelectronics Trading Down 11.8%

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 firm has a market capitalization of $7.29 billion, a P/E ratio of -110.54 and a beta of 3.85. The firm has a 50-day moving average of $113.25 and a two-hundred day moving average of $133.48.

Applied Optoelectronics (NASDAQ:AAOI - Get Free Report) last posted its quarterly 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. The company had revenue of $191.92 million for the quarter, compared to the consensus estimate of $190.48 million. Applied Optoelectronics had a negative net margin of 9.57% and a negative return on equity of 1.98%. The firm's quarterly revenue was up 86.3% compared to the same quarter last year. During the same period last year, the company posted ($0.16) EPS. Applied Optoelectronics has set its Q3 2026 guidance at 0.110-0.260 EPS. On average, analysts anticipate that Applied Optoelectronics, Inc. will post 0.55 EPS for the current year.

Institutional Investors Weigh In On Applied Optoelectronics

Several hedge funds have recently modified their holdings of the company. California State Teachers Retirement System increased its holdings in Applied Optoelectronics by 23.2% in the first quarter. California State Teachers Retirement System now owns 70,464 shares of the semiconductor company's stock valued at $5,961,000 after purchasing an additional 13,265 shares during the period. Handelsbanken Fonder AB acquired a new position in Applied Optoelectronics during the 2nd quarter worth about $7,719,000. BlackRock Inc. acquired a new position in Applied Optoelectronics during the 2nd quarter worth about $955,672,000. Bank of America Corp DE bought a new stake in shares of Applied Optoelectronics in the 2nd quarter valued at about $33,712,000. Finally, Quantitative Investment Management LLC bought a new stake in shares of Applied Optoelectronics in the 2nd quarter valued at about $1,474,000. 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 used to transmit data across broadband, data center, telecommunications and wireless networks. Its portfolio includes optical transceivers, modules, lasers, components and networking equipment designed for high-speed communications infrastructure.

The company serves communications service providers, cable television and broadband operators, internet content providers, data center operators and telecommunications customers.

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