Applied Optoelectronics (NASDAQ:AAOI) Stock Price Down 9.9% - Here's What Happened

Key Points

• Applied Optoelectronics shares fell 9.9% to about $46.92, with trading volume roughly 34% below its average.
• Analysts have cut price targets, including Rosenblatt’s reduction from $220 to $115 and Needham’s from $170 to $100. Despite the cuts, the stock carries a “Moderate Buy” consensus rating and an average target of $111.60.
• The company beat quarterly earnings and revenue estimates, reporting EPS of $0.17 and revenue of $269.88 million; revenue rose 127.5% year over year.

Applied Optoelectronics, Inc. (NASDAQ:AAOI - Get Free Report) shares were down 9.9% during mid-day trading on Tuesday. The stock traded as low as $47.06 and last traded at $46.9170. Approximately 6,968,053 shares traded hands during trading, a decline of 34% from the average session volume of 10,632,818 shares. The stock had previously closed at $52.10.

Analysts Set New Price Targets

Several analysts have recently weighed in on the stock. Rosenblatt Securities decreased their price target on shares of Applied Optoelectronics from $220.00 to $115.00 and set a "buy" rating for the company in a research note on Friday. Weiss Ratings upgraded Applied Optoelectronics from a "sell (e+)" rating to a "sell (d-)" rating in a report on Wednesday, October 21st. Raymond James Financial reissued an "outperform" rating and set a $178.00 price target on shares of Applied Optoelectronics in a research report on Tuesday, August 11th. Northland Securities upgraded Applied Optoelectronics from a "market perform" rating to an "outperform" rating and set a $120.00 price objective for the company in a report on Monday, November 2nd. Finally, Needham & Company LLC lowered their price objective on shares of Applied Optoelectronics from $170.00 to $100.00 and set a "buy" rating for the company in a research note on Friday. Four investment analysts have rated the stock with a Buy rating, one has given a Hold rating and one has issued a Sell rating to the company. Based on data from MarketBeat.com, the company presently has an average rating of "Moderate Buy" and a consensus price target of $111.60.

Applied Optoelectronics Price Performance

The firm has a market capitalization of $3.98 billion, a PE ratio of -109.83 and a beta of 4.04. The company has a debt-to-equity ratio of 0.12, a quick ratio of 2.13 and a current ratio of 2.78. The stock has a fifty day moving average price of $91.88 and a 200-day moving average price of $113.32.

Applied Optoelectronics (NASDAQ:AAOI - Get Free Report) last issued its quarterly earnings data on Thursday, November 5th. The semiconductor company reported $0.17 earnings per share for the quarter, topping analysts' consensus estimates of $0.14 by $0.03. Applied Optoelectronics had a negative return on equity of 1.98% and a negative net margin of 9.57%. The firm had revenue of $269.88 million during the quarter, compared to analysts' expectations of $268.11 million. During the same period in the prior year, the business posted ($0.09) EPS. The firm's quarterly revenue was up 127.5% on a year-over-year basis. Sell-side analysts forecast that Applied Optoelectronics, Inc. will post 0.55 EPS for the current fiscal year.

Insider Transactions at Applied Optoelectronics

In other Applied Optoelectronics news, CFO Stefan J. Murry sold 4,000 shares of the stock in a transaction dated Monday, October 12th. The stock was 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. This trade represents a 1.09% decrease in their ownership of the stock. The transaction was disclosed in a filing with the SEC, which can be accessed through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, insider Shu-Hua Yeh sold 6,000 shares of the stock in a transaction dated Monday, October 5th. The shares were sold at an average price of $120.03, for a total value of $720,180.00. Following the completion of the sale, the insider owned 371,498 shares of the company's stock, valued at approximately $44,590,904.94. This trade represents a 1.59% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders sold 52,172 shares of company stock valued at $5,985,036 in the last quarter. 3.80% of the stock is currently owned by corporate insiders.

Hedge Funds Weigh In On Applied Optoelectronics

Several hedge funds have recently modified their holdings of AAOI. Global Retirement Partners LLC lifted its stake in shares of Applied Optoelectronics by 80.1% during the third quarter. Global Retirement Partners LLC now owns 1,203 shares of the semiconductor company's stock worth $119,000 after buying an additional 535 shares during the period. HighTower Advisors LLC grew its holdings in shares of Applied Optoelectronics by 106.4% during the third quarter. HighTower Advisors LLC now owns 4,002 shares of the semiconductor company's stock valued at $397,000 after buying an additional 2,063 shares during the last quarter. ACT Capital Partners L.P. acquired a new position in shares of Applied Optoelectronics in the 3rd quarter valued at $1,191,000. William Blair Investment Management LLC increased its position in shares of Applied Optoelectronics by 12.4% in the 3rd quarter. William Blair Investment Management LLC now owns 566,908 shares of the semiconductor company's stock valued at $56,271,000 after acquiring an additional 62,706 shares during the period. Finally, Ritholtz Wealth Management acquired a new position in shares of Applied Optoelectronics in the 3rd quarter valued at $476,000. Institutional investors and hedge funds own 61.70% of the company's stock.

About Applied Optoelectronics

Applied Optoelectronics, Inc. designs and manufactures fiber-optic networking products used to transmit data over cable, telecommunications and data center networks. Its offerings include optical transceivers and other optical components and equipment. The company serves customers in markets including broadband access, telecommunications and data centers. Founded in 1997 and headquartered in Sugar Land, Texas, Applied Optoelectronics has operations in the United States and Asia and serves customers internationally.

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