Northland Securities Keeps a Sell Rating on Applied Optoelectronics (AAOI)

By Jason Carr

Northland Securities analyst Tim Savageaux maintained a Sell rating on Applied Optoelectronics (AAOIResearch Report) today and set a price target of $6.50. The company’s shares closed yesterday at $10.21, close to its 52-week low of $8.56.

Savageaux commented:

“We estimate the company could consume a further $25-30M in cash in 2H19 vs a current $84M cash balance vs $129M in debt. While management did note the early signs of a recovery among two of its large Cloud customers, consistent with supplier datapoints, the competitive and pricing landscape remains intense with AAOI’s scale in 100G datacom in particular de minimus relative to market leaders FNSR, Innolight and Intel. AAOI reported Q2 revs of $43.6M slightly higher than our $42.5M, with data center revs of $31.8M slightly higher than expected and Cable revs of $9.8M down ~20% seq and 30% y/y on well chronicled Cable spending weakness.”

According to, Savageaux is a 3-star analyst with an average return of 3.1% and a 51.2% success rate. Savageaux covers the Consumer Goods sector, focusing on stocks such as MACOM Technology Solutions Holdings Inc, DASAN Zhone Solutions Inc, and Communications Systems.

The word on The Street in general, suggests a Hold analyst consensus rating for Applied Optoelectronics with a $9.70 average price target.

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The company has a one-year high of $43.95 and a one-year low of $8.56. Currently, Applied Optoelectronics has an average volume of 677.5K.

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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.