B.Riley FBR Keeps a Hold Rating on Applied Optoelectronics (AAOI)

By Carrie Williams

B.Riley FBR analyst Dave Kang maintained a Hold rating on Applied Optoelectronics (AAOIResearch Report) today and set a price target of $10. The company’s shares closed yesterday at $12.06, close to its 52-week low of $11.77.

Kang noted:

“Optoelectronics (AAOI) reported 1Q/2Q print/outlook below expectations driven by a continued slowdown in the datacom sector due to elevated levels of inventory. For 1Q, revenue of $52.7M was slightly above/below our/consensus estimates of $52.5M/$52.9M. Gross margin of 25.5% (vs. guidance of 26.5%-28.5%) was below guidance as product test expenses weighed on margins. Management was incrementally cautious on datacom trends in 1H19 noting that 100G inventory had built up at customers and visibility into timing of demand remained limited. Due to the inventory glut and skittish spending trends by Chinese customers, the company guided 2Q below our/consensus estimates.”

According to TipRanks.com, Kang is a 5-star analyst with an average return of 20.5% and a 66.0% success rate. Kang covers the Consumer Goods sector, focusing on stocks such as Acacia Communications, Luna Innovations Inc, and Lumentum Holdings.

Currently, the analyst consensus on Applied Optoelectronics is a Moderate Sell with an average price target of $10.70.

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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.