Applied Optoelectronics (NASDAQ:AAOI) Shares Gap Down – Should You Sell?

Shares of Applied Optoelectronics, Inc. (NASDAQ:AAOI) gapped down before the market opened on Tuesday. The stock had previously closed at $78.20, but opened at $75.00. Applied Optoelectronics shares last traded at $77.3120, with a volume of 1,917,300 shares.

Analysts Set New Price Targets

AAOI has been the subject of several research analyst reports. Wall Street Zen raised shares of Applied Optoelectronics from a “sell” rating to a “hold” rating in a research report on Saturday, August 8th. Raymond James Financial reaffirmed an “outperform” rating and set a $178.00 price target on shares of Applied Optoelectronics in a research report on Tuesday, August 11th. Needham & Company LLC reduced their price target on shares of Applied Optoelectronics from $220.00 to $190.00 and set a “buy” rating on the stock in a research report on Friday, August 7th. B. Riley Financial decreased their price target on Applied Optoelectronics from $109.00 to $92.00 and set a “neutral” rating for the company in a research note on Thursday, October 15th. Finally, Rosenblatt Securities reissued a “buy” rating and issued a $220.00 price objective on shares of Applied Optoelectronics in a report on Friday, August 7th. Three equities research analysts have rated the stock with a Buy rating, two have assigned a Hold rating and one has issued a Sell rating to the stock. According to data from MarketBeat.com, the company has an average rating of “Hold” and a consensus price target of $147.00.

Applied Optoelectronics Stock Performance

The stock’s 50-day moving average price is $109.30 and its 200-day moving average price is $133.19. The company has a current ratio of 2.78, a quick ratio of 2.13 and a debt-to-equity ratio of 0.12. The company has a market capitalization of $6.58 billion, a P/E ratio of -99.68 and a beta of 3.85.

Applied Optoelectronics (NASDAQ:AAOI) last announced its quarterly earnings data on Thursday, August 6th. The semiconductor company reported $0.06 earnings per share for the quarter, beating analysts’ consensus estimates of $0.02 by $0.04. The business had revenue of $191.92 million during the quarter, compared to the consensus estimate of $190.48 million. Applied Optoelectronics had a negative net margin of 9.57% and a negative return on equity of 1.98%. The company’s revenue for the quarter was up 86.3% compared to the same quarter last year. During the same quarter in the prior year, the firm earned ($0.16) EPS. Applied Optoelectronics has set its Q3 2026 guidance at 0.110-0.260 EPS. As a group, equities analysts expect that Applied Optoelectronics, Inc. will post 0.55 EPS for the current year.

Insiders Place Their Bets

In other Applied Optoelectronics news, insider Shu-Hua Yeh sold 6,000 shares of Applied Optoelectronics stock in a transaction that occurred on Monday, October 5th. The stock was sold at an average price of $120.03, for a total value of $720,180.00. Following the completion of the transaction, the insider directly owned 371,498 shares in the company, valued at $44,590,904.94. The trade was a 1.59% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the SEC, which is available at this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CFO Stefan Murry sold 4,000 shares of the company’s stock in a transaction that occurred on Monday, October 12th. The shares were sold at an average price of $102.87, for a total value of $411,480.00. Following the transaction, the chief financial officer directly owned 363,168 shares of the company’s stock, valued at $37,359,092.16. This trade represents a 1.09% 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 have sold 56,887 shares of company stock valued at $6,581,484 over the last quarter. Insiders own 3.80% of the company’s stock.

Institutional Trading of Applied Optoelectronics

Hedge funds have recently made changes to their positions in the stock. BlackRock Inc. acquired a new stake in shares of Applied Optoelectronics in the second quarter valued at approximately $955,672,000. Renaissance Technologies LLC bought a new stake in shares of Applied Optoelectronics during the first quarter valued at approximately $47,817,000. William Blair Investment Management LLC acquired a new position in shares of Applied Optoelectronics during the second quarter worth approximately $74,703,000. Bank of America Corp DE acquired a new position in shares of Applied Optoelectronics during the second quarter worth approximately $33,712,000. Finally, Bank of New York Mellon Corp acquired a new position in shares of Applied Optoelectronics during the second quarter worth approximately $32,567,000. Institutional investors own 61.70% of the company’s stock.

About Applied Optoelectronics

Applied Optoelectronics, Inc (NASDAQ: AAOI) develops and manufactures fiber-optic networking products and solutions. Its offerings include optical transceivers, transmitters, receivers, lasers, and related components used to transmit data across fiber-optic networks.

The company serves several communications markets, including data centers, broadband access networks, cable television, and telecommunications. Its products are designed for applications such as high-speed data transmission, fiber-to-the-home and other broadband deployments, network connectivity, and communications infrastructure.

Founded in 1997 and headquartered in Sugar Land, Texas, Applied Optoelectronics supports customers in multiple regions, including North America, Asia, and other international markets.