Applied Optoelectronics (NASDAQ:AAOI) Stock Falls 1.9% - Here's What Happened

Key Points

• Applied Optoelectronics shares fell 1.9% to $76.74, with trading volume down 16% from the average session volume.
• Analyst sentiment remains mixed: the consensus rating is “Hold” with a $147 price target, while B. Riley cut its target to $92 and other firms maintained targets ranging from $178 to $220.
• The company exceeded quarterly expectations, reporting $0.06 EPS and $191.92 million in revenue, up 86.3% year over year, though it continued to post a negative net margin; insiders have sold $6.58 million in stock over the past 90 days.

Applied Optoelectronics, Inc. (NASDAQ:AAOI - Get Free Report)'s stock price was down 1.9% during trading on Tuesday. The company traded as low as $73.05 and last traded at $76.74. Approximately 8,752,863 shares changed hands during trading, a decline of 16% from the average session volume of 10,397,017 shares. The stock had previously closed at $78.20.

Analyst Ratings Changes

A number of equities research analysts have recently weighed in on the company. B. Riley Financial dropped their price objective 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. Wall Street Zen raised shares of Applied Optoelectronics from a "sell" rating to a "hold" rating in a research report on Saturday, August 8th. Rosenblatt Securities reiterated a "buy" rating and issued a $220.00 price objective on shares of Applied Optoelectronics in a research note on Friday, August 7th. Raymond James Financial reiterated an "outperform" rating and issued a $178.00 price objective on shares of Applied Optoelectronics in a research note on Tuesday, August 11th. Finally, Weiss Ratings downgraded Applied Optoelectronics from a "sell (d-)" rating to a "sell (e+)" rating in a research report on Monday, August 17th. Three research analysts have rated the stock with a Buy rating, two have given a Hold rating and one has issued a Sell rating to the stock. According to MarketBeat.com, Applied Optoelectronics has a consensus rating of "Hold" and a consensus price target of $147.00.

Applied Optoelectronics Price Performance

The stock's fifty day moving average price is $109.30 and its two-hundred day moving average price is $133.19. The firm has a market capitalization of $6.49 billion, a price-to-earnings ratio of -98.38 and a beta of 3.85. The company has a current ratio of 2.78, a quick ratio of 2.13 and a debt-to-equity ratio of 0.12.

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

Insider Buying and Selling at Applied Optoelectronics

In other news, insider Shu-Hua Yeh sold 6,000 shares of the company's stock in a transaction dated 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 transaction, the insider directly owned 371,498 shares of the company's stock, valued at approximately $44,590,904.94. This represents a 1.59% decrease in their position. The transaction was disclosed in a legal filing with the SEC, which can be accessed through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CFO Stefan J. Murry sold 4,000 shares of the stock in a transaction dated Monday, October 12th. The shares were sold at an average price of $102.87, for a total value of $411,480.00. Following the completion of the transaction, the chief financial officer owned 363,168 shares in the company, valued at approximately $37,359,092.16. The trade was a 1.09% 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 have sold a total of 56,887 shares of company stock worth $6,581,484 over the last ninety days. Corporate insiders own 3.80% of the company's stock.

Institutional Investors Weigh In On Applied Optoelectronics

Hedge funds and other institutional investors have recently made changes to their positions in the business. California State Teachers Retirement System increased its stake 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 stake in shares of Applied Optoelectronics during the second quarter worth about $7,719,000. BlackRock Inc. acquired a new stake in shares of Applied Optoelectronics during the second quarter worth about $955,672,000. Bank of America Corp DE purchased a new position in shares of Applied Optoelectronics during the second quarter worth about $33,712,000. Finally, Quantitative Investment Management LLC purchased a new position in shares of Applied Optoelectronics during the second quarter worth 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 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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