Options trading activity for Applied Optoelectronics (AAOI, Financial) is experiencing heightened levels ahead of its earnings announcement, with the current volume being 1.9 times the usual rate. In this pre-earnings phase, call options are leading puts by a ratio of 7:5. The market's implied volatility indicates an expected price fluctuation of approximately 14.4%, equating to a $2.11 movement following the earnings report. Historically, the median stock movement over the last eight quarters has been around 8.4%.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 5 analysts, the average target price for Applied Optoelectronics Inc (AAOI, Financial) is $36.00 with a high estimate of $70.00 and a low estimate of $13.00. The average target implies an upside of 145.40% from the current price of $14.67. More detailed estimate data can be found on the Applied Optoelectronics Inc (AAOI) Forecast page.
Based on the consensus recommendation from 5 brokerage firms, Applied Optoelectronics Inc's (AAOI, Financial) average brokerage recommendation is currently 2.2, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Applied Optoelectronics Inc (AAOI, Financial) in one year is $5.97, suggesting a downside of 59.3% from the current price of $14.67. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Applied Optoelectronics Inc (AAOI) Summary page.
AAOI Key Business Developments
Release Date: February 26, 2025
- Revenue: $100 million, up 66% year-over-year and 54% sequentially.
- Non-GAAP Gross Margin: 28.9%, within guidance range of 27.5% to 29.5%.
- Non-GAAP Loss Per Share: $0.02, within guidance range of a loss of $0.04 to earnings of $0.04 per share.
- Datacenter Revenue: $44.2 million, flat year-over-year, up 8% sequentially.
- CATV Revenue: $52.2 million, more than 4x year-over-year and more than doubled sequentially.
- Telecom Revenue: $3.5 million, up 26% year-over-year and 25% sequentially.
- Top 10 Customers: Represented 97% of revenue.
- GAAP Net Loss: $119.7 million or $2.60 per basic share, including a onetime charge of $112 million.
- Total Cash and Equivalents: $79.1 million at the end of Q4.
- Total Debt (Excluding Convertible Debt): $46 million.
- Inventory: $88.1 million, up from $64.4 million in Q3.
- Capital Expenditures (CapEx): $25.7 million in Q4, $48.8 million for the year.
- Q1 2025 Revenue Outlook: $94 million to $104 million.
- Q1 2025 Non-GAAP Gross Margin Outlook: 29% to 30.5%.
- Q1 2025 Non-GAAP Net Income Outlook: Loss of $3.6 million to breakeven.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Applied Optoelectronics Inc (AAOI, Financial) reported Q4 revenue of $100 million, aligning with their guidance range of $94 million to $104 million.
- The company saw a significant increase in CATV segment revenue, which was up more than 4x year-over-year and more than doubled sequentially.
- There was a substantial order for Quantum Bandwidth networking products from a top North American cable operator, indicating strong demand.
- The company is expanding production capabilities, including retrofitting a facility in Texas and leasing additional space in Taiwan.
- AAOI is poised for a sustained period of growth in both datacenter and CATV businesses, with plans for significant capital expansion.
Negative Points
- The company reported a non-GAAP loss per share of $0.02, within the guidance range but still a loss.
- GAAP net loss for Q4 was $119.7 million, significantly impacted by a one-time charge related to convertible notes.
- Non-GAAP operating loss in Q4 was $2.5 million, compared to an operating income of $0.4 million in the prior year.
- The increase in inventory to $88.1 million from $64.4 million in Q3 indicates potential overstocking or slower-than-expected sales.
- The company's Q1 2025 outlook includes a potential non-GAAP net loss of up to $3.6 million, indicating ongoing financial challenges.
