Applied Optoelectronics (NASDAQ:AAOI) Stock Jumps 6.8% - Time to Buy?

Key Points

• Applied Optoelectronics shares jumped 6.8% to about $82.22, although the stock remains below its 50-day and 200-day moving averages.
• Analyst sentiment is mixed: the consensus rating is “Hold” with a $143 price target, while individual targets range from $170 to $220.
• The company recently exceeded quarterly earnings and revenue expectations, with revenue rising 86.3% year over year, but it continues to report a negative net margin; insiders have also sold roughly $6.6 million of stock over the past 90 days.

Applied Optoelectronics, Inc. (NASDAQ:AAOI - Get Free Report)'s share price shot up 6.8% during trading on Wednesday. The company traded as high as $82.28 and last traded at $82.22. 10,185,296 shares were traded during mid-day trading, a decline of 2% from the average session volume of 10,388,024 shares. The stock had previously closed at $76.95.

Analysts Set New Price Targets

Several research analysts have weighed in on AAOI shares. Needham & Company LLC lowered their target price on shares of Applied Optoelectronics from $190.00 to $170.00 and set a "buy" rating on the stock in a research report on Tuesday. Wall Street Zen upgraded Applied Optoelectronics from a "sell" rating to a "hold" rating in a report on Saturday, August 8th. Raymond James Financial restated an "outperform" rating and issued a $178.00 price target on shares of Applied Optoelectronics in a report on Tuesday, August 11th. Weiss Ratings raised Applied Optoelectronics from a "sell (e+)" rating to a "sell (d-)" rating in a research note on Wednesday, October 21st. Finally, 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. Three investment 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's stock. According to data from MarketBeat, Applied Optoelectronics currently has an average rating of "Hold" and a consensus price target of $143.00.

Applied Optoelectronics Price Performance

The company has a market capitalization of $6.95 billion, a price-to-earnings ratio of -105.41 and a beta of 3.85. The company's 50 day simple moving average is $101.80 and its 200-day simple moving average is $112.09. 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 announced 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 business 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 quarterly revenue was up 86.3% compared to the same quarter last year. During the same quarter in the prior year, the firm posted ($0.16) earnings per share. Applied Optoelectronics has set its Q3 2026 guidance at 0.110-0.260 EPS. On average, equities research analysts predict that Applied Optoelectronics, Inc. will post 0.55 earnings per share for the current fiscal year.

Insider Activity

In related news, CFO Stefan J. Murry sold 4,000 shares of the business's stock in a transaction that occurred on 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 sale, the chief financial officer directly owned 363,168 shares in the company, valued at approximately $37,359,092.16. The trade was a 1.09% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, insider Hung-Lun Chang sold 32,172 shares of the company's stock in a transaction that occurred 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 transaction, the insider directly owned 249,276 shares of the company's stock, valued at $27,472,707.96. This trade represents a 11.43% decrease in their position. The disclosure for this sale is available in the SEC filing. Insiders sold a total of 56,887 shares of company stock valued at $6,581,484 in the last 90 days. 3.80% of the stock is currently owned by insiders.

Hedge Funds Weigh In On Applied Optoelectronics

A number of hedge funds have recently made changes to their positions in the stock. Polaris Financial Partners acquired a new stake in shares of Applied Optoelectronics during the 3rd quarter worth $26,000. EFG International AG acquired a new position in Applied Optoelectronics in the second quarter valued at $44,000. Persistent Asset Partners Ltd acquired a new position in Applied Optoelectronics in the second quarter valued at $47,000. Fiduciary Financial Advisors purchased a new stake in Applied Optoelectronics during the second quarter valued at about $48,000. Finally, Integrated Wealth Concepts LLC purchased a new stake in Applied Optoelectronics during the second quarter valued at about $58,000. Institutional investors and hedge funds own 61.70% of the company's stock.

About Applied Optoelectronics

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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