Rosenblatt Securities Maintains Their Sell Rating on Applied Optoelectronics (AAOI)


In a report released today, Jun Zhang from Rosenblatt Securities maintained a Sell rating on Applied Optoelectronics (AAOI), with a price target of $10. The company’s shares closed yesterday at $12.06, close to its 52-week low of $11.77.

Zhang noted:

“We do not believe AAOI has any meaningful near-term catalysts. Competition in the hyperscale intra data center market will continue to increase, as more Chinese optical module suppliers enter the market. We also see the 400G market increasing in competition. We believe Google (GOOGL: NR) and Amazon (AMZN: NR) will adopt 400G, while Facebook (FB: Buy) and Microsoft (MSFT: NR) stick with 100G CWDM4 modules. In addition, we expect Facebook will negotiate 100G CWDM4 module prices in the $100 range in 2020 in order to adopt 100G modules for 400G speed. We maintain our sell rating and $10 price target until we see meaningful design wins or a breakthrough in the 400G market.”

According to TipRanks.com, Zhang is a 4-star analyst with an average return of 5.5% and a 56.9% success rate. Zhang covers the Consumer Goods sector, focusing on stocks such as Lumentum Holdings, Viavi Solutions, and NeoPhotonics.

Applied Optoelectronics has an analyst consensus of Hold, with a price target consensus of $12.38.

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The company has a one-year high of $50.30 and a one-year low of $11.77. Currently, Applied Optoelectronics has an average volume of 976.5K.

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Applied Optoelectronics, Inc. engages in the design and manufacture of optical communications products. Its products include optical devices, such as laser diodes, photodiodes, related modules and circuitry, and equipment for applications in fiber-to-the-home, cable television, point to point communications and wireless.

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