Applied Optoelectronics (NASDAQ:AAOI) Stock Price Up 5.5% - Time to Buy?

Key Points

• Applied Optoelectronics shares rose 5.5% to about $113.56, although trading volume was 82% below its average. The stock remains below its 50-day and 200-day moving averages, both near $126.
• Analyst sentiment is mixed, with three Buy, two Hold and one Sell rating. The consensus rating is Hold, with an average price target of $139.40, while individual targets range from $178 to $190 among bullish analysts.
• The company exceeded quarterly earnings and revenue expectations, reporting $0.06 in EPS and $191.92 million in revenue, up 86.3% year over year. However, it remains unprofitable, and insiders have sold more than $45.8 million of shares over the past 90 days.

Applied Optoelectronics, Inc. (NASDAQ:AAOI - Get Free Report) shares shot up 5.5% on Tuesday . The stock traded as high as $115.08 and last traded at $113.5640. 1,984,950 shares traded hands during trading, a decline of 82% from the average daily volume of 10,755,803 shares. The stock had previously closed at $107.63.

Analysts Set New Price Targets

A number of brokerages have recently issued reports on AAOI. Raymond James Financial reissued an "outperform" rating and issued a $178.00 price target on shares of Applied Optoelectronics in a report on Tuesday, August 11th. B. Riley Financial reaffirmed a "neutral" rating on shares of Applied Optoelectronics in a report on Friday, August 7th. Weiss Ratings lowered shares of Applied Optoelectronics from a "sell (d-)" rating to a "sell (e+)" rating in a report on Monday, August 17th. Wall Street Zen raised shares of Applied Optoelectronics from a "sell" rating to a "hold" rating in a report on Saturday, August 8th. Finally, Needham & Company LLC cut their price target on shares of Applied Optoelectronics from $220.00 to $190.00 and set a "buy" rating for the company in a report on Friday, August 7th. Three analysts have rated the stock with a Buy rating, two have issued a Hold rating and one has assigned a Sell rating to the company. According to MarketBeat, the company has an average rating of "Hold" and an average target price of $139.40.

Applied Optoelectronics Price Performance

The business's 50 day moving average is $126.05 and its two-hundred day moving average is $125.85. The firm has a market capitalization of $9.57 billion, a PE ratio of -144.65 and a beta of 3.76. 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 released its quarterly earnings results on Thursday, August 6th. The semiconductor company reported $0.06 EPS for the quarter, topping analysts' consensus estimates 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 business's quarterly revenue was up 86.3% compared to the same quarter last year. During the same quarter in the previous year, the company earned ($0.16) EPS. Applied Optoelectronics has set its Q3 2026 guidance at 0.110-0.260 EPS. As a group, research analysts anticipate 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 (Joshua) Yeh sold 6,000 shares of the stock in a transaction dated Tuesday, August 18th. The stock was sold at an average price of $147.73, for a total transaction of $886,380.00. Following the transaction, the insider directly owned 377,498 shares in the company, valued at approximately $55,767,779.54. This represents a 1.56% decrease in their position. The sale was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, insider Hung-Lun (Fred) Chang sold 40,329 shares of the firm's stock in a transaction dated Wednesday, June 17th. The shares were sold at an average price of $170.60, for a total value of $6,880,127.40. Following the transaction, the insider directly owned 286,124 shares in the company, valued at approximately $48,812,754.40. This represents a 12.35% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Over the last ninety days, insiders have sold 272,629 shares of company stock valued at $45,881,654. 3.80% of the stock is currently owned by company insiders.

Institutional Inflows and Outflows

A number of institutional investors and hedge funds have recently bought and sold shares of the business. Geneos Wealth Management Inc. boosted its stake in shares of Applied Optoelectronics by 1.4% in the 1st quarter. Geneos Wealth Management Inc. now owns 18,072 shares of the semiconductor company's stock valued at $1,529,000 after purchasing an additional 243 shares in the last quarter. Comerica Bank raised its position in Applied Optoelectronics by 27.6% in the 4th quarter. Comerica Bank now owns 1,386 shares of the semiconductor company's stock worth $48,000 after purchasing an additional 300 shares during the period. EFG International AG bought a new stake in Applied Optoelectronics in the second quarter worth $44,000. Persistent Asset Partners Ltd bought a new stake in Applied Optoelectronics in the second quarter worth $47,000. Finally, Fiduciary Financial Advisors purchased a new stake in Applied Optoelectronics during the second quarter valued at about $48,000. 61.70% of the stock is currently owned by institutional investors.

Applied Optoelectronics Company Profile

Applied Optoelectronics, Inc develops and manufactures high-speed fiber-optic networking products designed to support the growing bandwidth demands of data centers, telecommunications carriers and internet content providers. The company's core offerings include pluggable optical transceiver modules, transponders and optical components that enable data transmission at rates ranging from 1G to 400G. These products are used to facilitate long-haul, metro and intra-data center connectivity, addressing the need for scalable, low-latency and energy-efficient solutions in modern network infrastructures.

The company's product portfolio spans small-form factor pluggable modules such as SFP+, QSFP+ and QSFP28 units, as well as more advanced form factors like CFP2 and OSFP for ultra-high-speed applications.

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