Applied Optoelectronics (NASDAQ:AAOI) Stock Falls 6.9% - What's Next?

Key Points

• AAOI shares fell 6.9% to about $94.41, with trading volume roughly 70% below the average session volume. The stock remains below its 50-day and 200-day moving averages.
• Analyst sentiment is mixed, with three Buy, two Hold and one Sell rating; the average price target is $139.40, well above the current price.
• The company exceeded quarterly expectations, reporting $0.06 EPS versus $0.02 expected and 86.3% year-over-year revenue growth, though it posted a negative net margin. Insiders sold more than $6.0 million of stock over the past three months, while institutional ownership stands at 61.7%.

Applied Optoelectronics, Inc. (NASDAQ:AAOI - Get Free Report)'s share price was down 6.9% on Monday. The company traded as low as $94.13 and last traded at $94.4090. 3,053,934 shares changed hands during trading, a decline of 70% from the average session volume of 10,230,492 shares. The stock had previously closed at $101.40.

Wall Street Analysts Forecast Growth

A number of brokerages have weighed in on AAOI. Wall Street Zen upgraded shares of Applied Optoelectronics from a "sell" rating to a "hold" rating in a research note on Saturday, August 8th. Rosenblatt Securities reissued a "buy" rating and issued a $220.00 target price on shares of Applied Optoelectronics in a report on Friday, August 7th. B. Riley Financial reissued a "neutral" rating on shares of Applied Optoelectronics in a research report on Friday, August 7th. Weiss Ratings lowered shares of Applied Optoelectronics from a "sell (d-)" rating to a "sell (e+)" rating in a research report on Monday, August 17th. Finally, 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. 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. Based on data from MarketBeat, the stock currently has an average rating of "Hold" and an average target price of $139.40.

Applied Optoelectronics Stock Performance

The business has a 50-day simple moving average of $111.76 and a 200 day simple moving average of $132.98. The firm has a market cap of $8.12 billion, a PE ratio of -123.24 and a beta of 3.79. The company has a debt-to-equity ratio of 0.12, a current ratio of 2.78 and a quick ratio of 2.13.

Applied Optoelectronics (NASDAQ:AAOI - Get Free Report) last announced its quarterly earnings data on Thursday, August 6th. The semiconductor company reported $0.06 EPS for the quarter, beating the consensus estimate of $0.02 by $0.04. The firm 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 company's revenue was up 86.3% on a year-over-year basis. During the same period last year, the firm earned ($0.16) EPS. Applied Optoelectronics has set its Q3 2026 guidance at 0.110-0.260 EPS. Equities research analysts forecast that Applied Optoelectronics, Inc. will post 0.55 EPS for the current year.

Insiders Place Their Bets

In related news, insider Shu-Hua Yeh sold 6,000 shares of the firm's stock in a transaction on Tuesday, August 18th. The shares were sold at an average price of $147.73, for a total transaction of $886,380.00. Following the completion of the transaction, the insider directly owned 377,498 shares of the company's stock, valued at approximately $55,767,779.54. This trade represents a 1.56% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the SEC, which is accessible 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 business's stock in a transaction on Tuesday, September 8th. The stock was sold at an average price of $110.21, for a total transaction of $3,545,676.12. Following the completion of the sale, the insider owned 249,276 shares in the company, valued at approximately $27,472,707.96. The trade was a 11.43% decrease in their position. The SEC filing for this sale provides additional information. Insiders sold 52,172 shares of company stock worth $6,092,409 in the last three months. 3.80% of the stock is owned by company insiders.

Institutional Inflows and Outflows

Institutional investors have recently made changes to their positions in the company. BlackRock Inc. bought a new stake in Applied Optoelectronics in the 2nd quarter worth approximately $955,672,000. Renaissance Technologies LLC purchased a new position in shares of Applied Optoelectronics in the first quarter valued at $47,817,000. William Blair Investment Management LLC purchased a new position in shares of Applied Optoelectronics in the second quarter valued at $74,703,000. Next Century Growth Investors LLC bought a new stake in Applied Optoelectronics in the fourth quarter worth $16,220,000. Finally, Kennedy Capital Management LLC purchased a new stake in Applied Optoelectronics during the fourth quarter valued at $15,586,000. Hedge funds and other institutional investors 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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