Applied Optoelectronics (NASDAQ:AAOI) Stock Falls 12% - Here's Why

Key Points

• Applied Optoelectronics shares fell 12% to $68.07 in heavy trading, with volume 34% above the average session level.
• Analyst sentiment is mixed: the consensus rating is “Hold” with a $147 target price, while B. Riley cut its target from $109 to $92 and maintained a neutral rating.
• The company recently beat quarterly earnings and revenue estimates, with revenue up 86.3% year over year, but it remains unprofitable with a negative net margin; insiders have also sold $6.6 million of shares over the past three months.

Applied Optoelectronics, Inc. (NASDAQ:AAOI - Get Free Report)'s stock price was down 12% during mid-day trading on Thursday. The stock traded as low as $66.28 and last traded at $68.07. 13,948,407 shares were traded during mid-day trading, an increase of 34% from the average session volume of 10,403,912 shares. The stock had previously closed at $77.32.

Wall Street Analysts Forecast Growth

AAOI has been the topic of several research reports. B. Riley Financial reduced their price objective on Applied Optoelectronics from $109.00 to $92.00 and set a "neutral" rating on the stock in a report on Thursday, October 15th. Weiss Ratings upgraded Applied Optoelectronics from a "sell (e+)" rating to a "sell (d-)" rating in a report on Wednesday. Wall Street Zen raised Applied Optoelectronics from a "sell" rating to a "hold" rating in a research report on Saturday, August 8th. Rosenblatt Securities restated a "buy" rating and set a $220.00 price target on shares of Applied Optoelectronics in a research note on Friday, August 7th. Finally, Raymond James Financial restated an "outperform" rating and issued a $178.00 price objective on shares of Applied Optoelectronics in a report on Tuesday, August 11th. Three equities research analysts have rated the stock with a Buy rating, two have given a Hold rating and one has given a Sell rating to the stock. Based on data from MarketBeat, the stock presently has an average rating of "Hold" and a consensus target price of $147.00.

Applied Optoelectronics Price Performance

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's 50-day moving average price is $106.93 and its two-hundred day moving average price is $132.94. The stock has a market cap of $5.76 billion, a PE ratio of -87.27 and a beta of 3.85.

Applied Optoelectronics (NASDAQ:AAOI - Get Free Report) last issued its quarterly earnings data on Thursday, August 6th. The semiconductor company reported $0.06 earnings per share (EPS) for the quarter, beating the consensus estimate of $0.02 by $0.04. The company 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 company posted ($0.16) earnings per share. Applied Optoelectronics has set its Q3 2026 guidance at 0.110-0.260 EPS. On average, equities analysts expect that Applied Optoelectronics, Inc. will post 0.55 earnings per share for the current fiscal year.

Insider Transactions at Applied Optoelectronics

In related news, insider Shu-Hua Yeh sold 6,000 shares of the company's stock in a transaction on Monday, October 5th. The stock was sold at an average price of $120.03, for a total transaction of $720,180.00. Following the completion of the sale, the insider directly owned 371,498 shares in the company, valued at $44,590,904.94. This represents a 1.59% decrease in their position. The sale was disclosed in a document filed with the SEC, which is available through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, insider Hung-Lun Chang sold 32,172 shares of the firm's stock in a transaction dated 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 sale, the insider directly owned 249,276 shares in the company, valued at approximately $27,472,707.96. The trade was a 11.43% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. In the last three months, insiders sold 56,887 shares of company stock valued at $6,581,484. Corporate insiders own 3.80% of the company's stock.

Institutional Trading of Applied Optoelectronics

Several hedge funds have recently modified their holdings of the company. California State Teachers Retirement System increased its position in shares of Applied Optoelectronics by 23.2% during the first quarter. California State Teachers Retirement System now owns 70,464 shares of the semiconductor company's stock worth $5,961,000 after purchasing an additional 13,265 shares in the last quarter. Handelsbanken Fonder AB purchased a new stake in shares of Applied Optoelectronics during the 2nd quarter valued at $7,719,000. BlackRock Inc. acquired a new stake in shares of Applied Optoelectronics in the 2nd quarter worth $955,672,000. Capstone Capital Management Ltd acquired a new stake in shares of Applied Optoelectronics in the 3rd quarter worth $2,101,000. Finally, Bank of America Corp DE purchased a new position in Applied Optoelectronics during the 2nd quarter worth $33,712,000. 61.70% of the stock is owned by hedge funds and other institutional investors.

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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