Why Applied Optoelectronics Inc (AAOI) Are Rising Today


Today, shareholders of Applied Optoelectronics Inc (NASDAQ:AAOI) woke up to a nice 8% pop in the value of their shares, after the company said it expects to deliver another record quarter with our top and bottom-line results expected to exceed our guidance.

CEO Dr. Thompson Lin stated, “Again this quarter, our results were driven by improvement in our manufacturing costs, capacity expansion and solid execution by our production team. We are pleased with our performance and look forward to sharing the additional details of our second quarter results on our conference call in August.”

Second Quarter 2017 Preliminary Unaudited Financial Results

  • Revenue of approximately $117.3 million, above the prior outlook of $106.0 million to $112.0 million.
  • GAAP and non-GAAP gross margin in the range of 45.0% to 45.4%, above the prior non-GAAP outlook of 41.0% to 42.5%.
  • GAAP net income in the range from $28.0 million to $29.0 million and non-GAAP net income after tax in the range from $26.6 million to $27.6 million, above the prior non-GAAP outlook of $22.2 million to $24.3 million.
  • GAAP fully diluted earnings per share in the range of $1.37 to $1.42 and non-GAAP fully diluted earnings per share in the range of $1.31 to $1.36, using a weighted-average fully diluted share count of approximately 20.4 million shares. This is above the prior non-GAAP outlook of $1.09 to $1.19 per share, using approximately 20.4 million shares.

On the ratings front, AAOI has been the subject of a number of recent research reports. In a report issued on June 29, D.A. Davidson analyst Mark Kelleher initiated coverage with a Buy rating on AAOI and a price target of $95, which represents a potential upside of 31% from where the stock is currently trading. On June 26, Needham’s Alex Henderson reiterated a Buy rating on the stock.

According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Mark Kelleher and Alex Henderson have a yearly average return of 5.9% and 14.4% respectively. Kelleher has a success rate of 55% and is ranked #1288 out of 4600 analysts, while Henderson has a success rate of 56% and is ranked #217.

Overall, one research analyst has rated the stock with a Sell rating, one research analyst has assigned a Hold rating and 7 research analysts have given a Buy rating to the stock. When considering if perhaps the stock is under or overvalued, the average price target is $74.63 which is 3% above where the stock closed yesterday.

Applied Optoelectronics, Inc. designs, develops and manufactures optical devices, packaged optical components, optical subsystems, laser transmitters, and fiber optic transceivers. It manufactures optical devices, including laser diodes, photodiodes, related modules and circuitry and equipment for applications in fiber-to-the-home, cable television, point to point communications and wireless. The company provides its products for three networking end-markets: internet data center, cable television and fiber-to-the-home.