Rankings Tech hardware & optics Applied Optoelectronics
Applied Optoelectronics
43
15070100
A view of the same findings, not a new score. How it works
The model found several serious problems. That does not mean the stock will fall.
Biggest deductions
- Multiples vs own history and peers−20
- Margin−8
- Dilution−7
Strengths
- Raised guidance and demand+2
- Net cash+1
How the score is built
From 100 to 43, step by step: points off for the business, the price and the cracks, back for documented strengths, then three data adjustments.
Start
Score
Hover or select a step to see what drove it. Steps with findings open them below.
Key numbers
As of 2 Nov 2026. Analyst targets tend to be optimistic; read upside as a hint, not a forecast.
- Price
- 62.50 USD
- Median analyst target
- 170.00 USD
- Upside to median
- +172.0%
- Analysts
- 6
- Target range
- 92.00 – 220.00 USD
- 52-week change
- +76%
- P/E (trailing)
- n/a
- Forward P/E
- 27.2
- PEG
- n/a
Findings
Every deduction and every plus, with its source. Open a step to read them.
Business
Is the company getting stronger, not just bigger? · 3 findings−18 of −30
- −8MarginOperating margin -11.3% and net margin -9.6% (TTM) despite revenue +62%; operating losses every year 2021-2025 (-41 to -71m USD), and the GAAP net loss widened in Q2 2026 (USD 22.8m versus 9.1m) even though revenue rose 86%. Gross margin only about 29% versus about 38% at Coherent. ROIC -5.6% (not counted again).
- −6Capital intensity and capital allocationCapex 769m USD TTM (210m in 2025, 50m in 2024) - more than the entire revenue of 596m - and FCF -900m USD; operating cash flow is also negative (-132m) because inventory and receivables tie up 246m. Growth was bought with 1.35bn USD in new shares over 12 months, and management expects elevated capex through 2027.
- −4Moat800G/1.6T transceivers are a competitive product where customers (hyperscalers) dictate the price; gross margin is guided to only 29-30.5% non-GAAP in Q3, and Q3 EPS guidance (0.11-0.26 USD) was below consensus of 0.28 despite revenue growth. No sign of pricing power.
Price
Today's multiples against the company's own history and its peers. · 1 finding−20 of −35
- −20Multiples vs own history and peersP/S 16.7 versus 0.24-7.3 in 2021-2025 and EV/Sales 16.3 versus 0.8-7.65; P/B 5.6 versus 0.3-8.0. Forward P/E 47.6 is above Lumentum (42) and Coherent (30), even though AAOI still has a GAAP loss and negative FCF. The stock is +240% in a year, but -53% from the peak of USD 233.67.
Cracks
Cash flow, customers, debt, insiders, guidance and what sits behind the headline numbers. · 5 findings−16 of −35
- −7DilutionShare count has risen 49% over a year (+7.4% in the latest quarter) via repeated ATM programmes: 180m USD (Nov. 2025), 500m (Feb./Mar. 2026) and a new one of 600m USD from 21/8-2026 - approx. 6% of market cap more. The stock fell approx. 10% on the news.
- −5Customer concentrationCATV customer Digicomm accounted for 44.1% of revenue in Q1 2026 and 74.5% of receivables; the data-center part rests on a few hyperscalers, including Amazon, which holds warrants for up to 7.9m shares tied to purchases of 4bn USD (the warrant value is offset against revenue).
- −2ExecutionMust scale to about 650,000 units of 800G/1.6T per month by the end of 2026 in Texas and Taiwan; the GAAP loss widened in Q2 due to higher operating and start-up costs, and Q3 earnings guidance disappointed.
- −1Insider tradingInsiders have been consistent net sellers since January 2026; no insider purchases. Insiders own only 4.2%.
- −1
Plus
Only documented strengths. · 2 findings+3 of +15
- +2Raised guidance and demandThe full-year 2026 target has been raised to over 1.1bn USD in revenue (2025: 456m); Q2 revenue 191.9m (+86%), Q3 guided to 255-290m, and management says demand exceeds capacity until mid-2027.
- +1Net cashCash of USD 500m against debt of 300m, i.e. net cash of 200m (2% of market cap) - but funded by share issuance.
Caveats
What the score does not capture, or where the data is weak.
Loss-making in every year 2021-TTM, so trailing P/E and EV/EBITDA cannot be used; the forward P/E history (81-174) rests on almost no earnings and is not comparable. T2 is therefore primarily P/S and EV/Sales against own history and forward P/E against peers. About 52% of TTM revenue is data centre (AI optics), the rest mainly CATV via one customer (Digicomm). Insider trading is documented only via secondary sources (MarketBeat); Form 4 has not been reviewed. Amazon warrants are offset against revenue from Amazon.
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