Applied Optoelectronics (NASDAQ:AAOI) Stock Price Down 6.4% - Here's Why

Key Points

• Applied Optoelectronics shares fell 6.4% to about $121.82, with trading volume roughly 80% below the average session volume.
• Analyst sentiment remains mixed: the stock has a consensus “Hold” rating and an average price target of $139.40, while Needham cut its target to $190 but maintained a Buy rating.
• The company exceeded quarterly earnings and revenue estimates, with revenue up 86.3% year over year, but remains unprofitable; insiders have also sold more than $6.1 million of shares over the past 90 days.

Applied Optoelectronics, Inc. (NASDAQ:AAOI - Get Free Report) fell 6.4% on Wednesday. The stock traded as low as $120.60 and last traded at $121.8230. 2,011,705 shares were traded during mid-day trading, a decline of 80% from the average session volume of 10,192,755 shares. The stock had previously closed at $130.16.

Analyst Ratings Changes

A number of research analysts have weighed in on the company. B. Riley Financial reiterated a "neutral" rating on shares of Applied Optoelectronics in a report on Friday, August 7th. Weiss Ratings lowered Applied Optoelectronics from a "sell (d-)" rating to a "sell (e+)" rating in a research report on Monday, August 17th. Wall Street Zen upgraded shares of Applied Optoelectronics from a "sell" rating to a "hold" rating in a report on Saturday, August 8th. Rosenblatt Securities reaffirmed a "buy" rating and issued a $220.00 target price on shares of Applied Optoelectronics in a research report on Friday, August 7th. Finally, Needham & Company LLC lowered their price target on shares of Applied Optoelectronics from $220.00 to $190.00 and set a "buy" rating for the company in a research report on Friday, August 7th. Three analysts have rated the stock with a Buy rating, two have assigned a Hold rating and one has issued a Sell rating to the company's stock. According to data from MarketBeat, the stock presently has a consensus rating of "Hold" and an average target price of $139.40.

Applied Optoelectronics Stock Down 7.0%

The company has a 50 day moving average price of $112.57 and a two-hundred day moving average price of $133.32. The stock has a market cap of $10.24 billion, a PE ratio of -155.13 and a beta of 3.85. 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 posted its earnings results 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. Applied Optoelectronics had a negative net margin of 9.57% and a negative return on equity of 1.98%. The business had revenue of $191.92 million for the quarter, compared to analysts' expectations of $190.48 million. During the same quarter in the prior year, the business earned ($0.16) EPS. The business's revenue for the quarter was up 86.3% compared to the same quarter last year. Applied Optoelectronics has set its Q3 2026 guidance at 0.110-0.260 EPS. Analysts expect that Applied Optoelectronics, Inc. will post 0.55 EPS for the current year.

Insider Transactions at Applied Optoelectronics

In other news, CFO Stefan Murry sold 4,000 shares of the business's stock in a transaction on Thursday, September 10th. The shares were sold at an average price of $105.33, for a total transaction of $421,320.00. Following the completion of the sale, the chief financial officer owned 367,168 shares of the company's stock, valued at $38,673,805.44. The trade was a 1.08% decrease in their position. The sale was disclosed in a legal filing with the SEC, which is available at 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 company's stock in a transaction on Tuesday, September 8th. The stock was sold at an average price of $110.21, for a total value of $3,545,676.12. Following the completion of the sale, the insider owned 249,276 shares of the company's stock, valued at $27,472,707.96. This trade represents a 11.43% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. Insiders have sold 52,172 shares of company stock worth $6,092,409 in the last 90 days. 3.80% of the stock is currently owned by insiders.

Institutional Inflows and Outflows

Hedge funds have recently made changes to their positions in the stock. California State Teachers Retirement System grew 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 valued at $5,961,000 after purchasing an additional 13,265 shares in the last quarter. Handelsbanken Fonder AB bought a new position in Applied Optoelectronics during the second quarter valued at approximately $7,719,000. BlackRock Inc. purchased a new position in Applied Optoelectronics during the 2nd quarter valued at approximately $955,672,000. Bank of America Corp DE purchased a new position in Applied Optoelectronics during the 2nd quarter valued at approximately $33,712,000. Finally, Quantitative Investment Management LLC bought a new stake in Applied Optoelectronics in the 2nd quarter worth approximately $1,474,000. 61.70% of the stock is currently owned by institutional investors.

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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