Applied Optoelectronics Inc. (AAOI) shares are trading at higher $8.43 and the avg recommendation for the stock is Moderate Buy, while the current analyst price target stands at $9.25.
To add more color to this target, the company’s high over the last year is $17.57 and the low is $5.00. Over the last 52 weeks, AAOI is down -20.09% while the S&P 500 is up 15.47%. The catalyst for this interesting swing was the company’s recent earnings report.
A Notable Earnings Report
In the last quarter, AAOI reported a profit of $19.19 million. Applied Optoelectronics Inc. also saw revenues increase to $76.61 million. In addition, AAOI has free cash flow of -$42.04 million as of 09-2020. The company’s EBITDA came in at -$0.35 million which compares well with its peers.
AAOI booked profit margins of -34.80%, its Return on Equity (ROE) is -30.50%, and its Return on Assets is -17.00%. All told, it is clear that, AAOI needs to be on your watchlist.
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Of course, we must look beyond the financials and question how well those numbers represent the sustainable earnings power of the business. Investors need to know how sustainable this current run. AAOI has a short ratio of 6.72 and outstanding shares of 22.74M.
AAOI has seen increased volume after this news and investors are putting their support behind the value proposition. Furthermore, 10-day volume stands at 0.86 million and more growth is possible in the weeks ahead. Traders will also note the company’s earnings per share came in at -3.91. Applied Optoelectronics Inc. AAOI also noted assets of $497.79 million at the end of the last quarter. Investors should also keep an eye on sector updates as AAOI has historically followed its peers on positive news.
All told, Applied Optoelectronics Inc. AAOI has strung together solid data and demonstrated underlying fundamentals. At its current valuation, AAOI represents an interesting risk/reward case. Traders should stay tuned to see if this recent report will push the stock to test recent resistance levels.
Applied Optoelectronics Inc. AAOI is now commanding a market cap of 190.01M and a float of 21.76M. AAOI is increasing its credibility in this sector and that could lead to more upside down the line. Sign-up for continuing coverage on shares of AAOI stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!
Disclosure: we hold no position in AAOI, either long or short, and we have not been compensated for this article.