Upside case
Bull case
—
The bull case requires both strong earnings delivery and the market pricing AAOI more generously than it does today.
Analysis OverviewBuyUpdated Jun 18, 2026
Applied Optoelectronics, Inc. (AAOI) Stock Analysis
Wall Street verdict, consensus price target, and analyst rating breakdown — everything needed to frame the risk/reward at today's price.
Analyst consensus
Buy
Covering
16
analysts
7 bullish · 3 bearish · 16 covering AAOI
Strong Buy
0
Buy
7
Hold
6
Sell
3
Strong Sell
0
Consensus Target
$160
-1.1% vs today
Scenario Range
— – —
Model bear to bull value window
Coverage
16
Published analyst ratings
Valuation Context
156.6x
Forward P/E · Market cap $12.8B
AAOI price targets
Three scenarios for where AAOI stock could go
Current
~$162
Confidence
55 / 100
Updated
Jun 18, 2026
Market caseClosest to today
Base case
—
The base case reflects analyst consensus expectations — steady delivery without requiring a major catalyst or re-rating.
Stress case
Bear case
—
The bear case reflects a scenario where earnings shortfalls or multiple compression combine to materially reduce the stock from its current level.
Not financial advice. Model confidence reflects internal scenario assumptions, not a guarantee of returns. Past performance does not predict future results.
Applied Optoelectronics, Inc.
AAOI · NASDAQTechnologySemiconductorsDecember year-end
Applied Optoelectronics designs and manufactures fiber-optic networking components — primarily optical modules, transceivers, and lasers — for data centers and telecom networks. It generates revenue by selling these components to data center operators, cable TV equipment makers, and internet service providers through direct and indirect channels. The company's vertical integration — designing and manufacturing its own lasers and components — provides cost and quality advantages in a competitive market.
Market Cap
$12.8B
Revenue TTM
$507M
Net Income TTM
-$43M
Net Margin
-8.5%
AAOI Revenue and Earnings Performance
Quarterly beat-or-miss track record against analyst estimates, plus forward revenue and EPS outlook for the next two fiscal years.
EPS Beat Rate
50%Exceptional
12 quarters tracked
Revenue Beat Rate
25%Exceptional
vs consensus estimates
Avg EPS Surprise
+14.5%
above Street consensus
Beat / Miss Record
BeatMissLeft = EPS · Right = Revenue
Q3 2025
Q4 2025
Q1 2026
Q2 2026
Last 4 Quarters
EPS beats: 2 of 4Q3 2025
EPS
$-0.16/$-0.08
Revenue
$103M/$119M
Q4 2025
EPS
$-0.09/$-0.10
Revenue
$119M/$132M
Q1 2026
EPS
$-0.01/$-0.12
Revenue
$134M/$132M
Q2 2026
EPS
$-0.07/$-0.05
Revenue
$151M/$157M
| Quarter | EPS (Actual / Est) | EPS Surprise | Revenue (Actual / Est) | Rev Surprise |
|---|---|---|---|---|
| Q3 2025 | $-0.16/$-0.08 | -100.0% | $103M/$119M | -13.2% |
| Q4 2025 | $-0.09/$-0.10 | +10.0% | $119M/$132M | -9.8% |
| Q1 2026 | $-0.01/$-0.12 | +91.7% | $134M/$132M | +1.5% |
| Q2 2026 | $-0.07/$-0.05 | -42.9% | $151M/$157M | -3.7% |
FY1–FY2 Estimates
Revenue Outlook
FY1
$632M
+24.6% YoY
FY2
$751M
+19.0% YoY
EPS Outlook
FY1
$-0.78
-37.1% YoY
FY2
$-0.65
+16.5% YoY
Trailing FCF (TTM)-$239M
FCF Margin: -47.1%
Next Earnings
August 6, 2026
Expected EPS
$0.03
Expected Revenue
$190M
AAOI beat EPS estimates in 2 of 4 tracked quarters. Mixed delivery makes the upcoming report a key data point for re-rating.
AAOI Revenue Breakdown by Segment
Product and geographic revenue mix from the latest annual disclosure, with year-over-year growth by segment.
Latest disclosure
FY 2025
Total disclosed revenue $455M
Product Mix
Latest annual revenue by segment or product family
CATV
53.9%
+179.5% YoY
Tap, hover, or focus a slice to inspect segment detail.
Geographic Mix
Latest annual revenue by reported region
CHINA
57.5%
+134.5% YoY
Tap, hover, or focus a slice to inspect segment detail.
CATV is the largest disclosed segment at 53.9% of FY 2025 revenue, up 179.5% YoY.
CHINA is the largest reported region at 57.5%, up 134.5% YoY.
AAOI Valuation Snapshot
Current multiples compared to the S&P 500, the company's sector, and its own five-year average.
Relative Value Signal
Limited: Expensive versus peers
Fair value est. $57 — implies -64.5% from today's price.
Premium to Fair Value
64.5%
above fair value
Deep DiscountFair ValueVery Expensive
vs S&P 500 Trailing P/E
AAOI
-252.9x
vs
S&P 500
24.4x
1134% discount
vs Technology Trailing P/E
AAOI
-252.9x
vs
Technology
29.0x
972% discount
vs AAOI 5Y Avg P/E
Today
-252.9x
vs
5Y Average
—
Benchmark unavailable
Forward PE
156.6x
S&P 500
18.8x
+733%
Technology
22.3x
+604%
5Y Avg
—
—
Trailing PE
-252.9x
S&P 500
24.4x
-1134%
Technology
29.0x
-972%
5Y Avg
—
—
PEG Ratio
—
S&P 500
1.66x
—
Technology
1.51x
—
5Y Avg
—
—
EV/EBITDA
—
S&P 500
15.2x
—
Technology
16.6x
—
5Y Avg
—
—
Price/FCF
—
S&P 500
20.7x
—
Technology
19.2x
—
5Y Avg
—
—
Price/Sales
28.0x
S&P 500
3.1x
+807%
Technology
2.4x
+1050%
5Y Avg
2.9x
+869%
Dividend Yield
—
S&P 500
1.91%
—
Technology
1.11%
—
5Y Avg
—
—
| Metric | AAOI | S&P 500 | Technology | 5Y Avg AAOI |
|---|---|---|---|---|
| Forward PE | 156.6x | 18.8x+733% | 22.3x+604% | — |
| Trailing PE | -252.9x | 24.4x-1134% | 29.0x-972% | — |
| PEG Ratio | — | 1.66x | 1.51x | — |
| EV/EBITDA | — | 15.2x | 16.6x | — |
| Price/FCF | — | 20.7x | 19.2x | — |
| Price/Sales | 28.0x | 3.1x+807% | 2.4x+1050% | 2.9x+869% |
| Dividend Yield | — | 1.91% | 1.11% | — |
AAOI trades above S&P 500 benchmarks on 2 of 3 measured multiples — is elevated on some multiples, but competitive on others — a mixed valuation picture.
Forward P/E and PEG reflect analyst consensus estimates. Historical averages use trailing ratios where forward data is unavailable.S&P 500 and sector benchmarks both use trailing median P/E — similar readings indicate the broader index and sector are priced alike.
Open valuation toolAAOI Financial Health
Verdict
Stressed
Key financial metrics for AAOI are shown below.
Cash Engine
Revenue, margins, and cash generation
Revenue (TTM)
Trailing-twelve-month sales base
$507M
Revenue Growth
TTM vs prior year
+64.3%
Gross Margin
Gross profit as a share of revenue
29.6%
Operating Margin
Operating income divided by revenue
-11.6%
Net Margin
Net income divided by revenue
-8.5%
EPS (TTM)
Diluted earnings per share, trailing twelve months
$-0.57
Free Cash Flow (TTM)
Cash generation after capex
-$239M
FCF Margin
FCF as share of revenue — the primary cash quality signal
-47.1%
Capital Quality
ROIC, leverage, and debt serviceability
ROIC
Return on invested capital — primary competitive quality signal
-7.9%
ROA
Return on assets, trailing twelve months
-3.8%
Cash & Equivalents
Liquid assets on the balance sheet
$216M
Net Cash
Cash exceeds total debt — no net leverage
$49M
Debt Serviceability
Net debt as a multiple of annual free cash flow
Net cash ✓
ROE *
Return on equity, trailing twelve months
-6.1%
* Elevated by buyback-compressed equity — compare ROIC (-7.9%) for an undistorted picture of capital efficiency.
Shareholder Returns
How capital is returned to owners
Total shareholder yield
0.0%
Dividend
—
Buyback
0.0%
Share Repurchases
Trailing buyback outflow — dollar magnitude of capital returned
$0
Dividend / Share
Annualized trailing dividend per share
—
Payout Ratio
Share of earnings distributed as dividends
—
Shares Outstanding
Current diluted share count
79M
All figures from the trailing twelve months. ROIC uses invested capital (equity + net debt). ROE marked * where buyback-compressed equity base may inflate the figure.
Open full ratios pageAAOI Stock Risk Factors
Key factors that could pressure the stock price, compress the multiple, or weigh on future results.
AI analysis · updated June 18, 2026
High Risk
Execution risks
The company faces severe structural execution risks despite high demand, as highlighted by its dramatic crossroads between demand and operational challenges.
Medium
Market cyclicality
AAOI has historically been viewed as a cyclical provider in CATV and FTTH markets, which could pose risks if demand shifts.
High Risk
Financial performance
Despite revenue growth and margin improvement, the company still reports net losses, indicating ongoing profitability challenges.
Medium
Competitive pressures
While vertical integration is a differentiator, the optical components market is highly competitive, with potential margin pressures.
Lower
Dependence on 800G demand
The company's recent growth is tied to 800G transceiver demand, creating reliance on a specific product cycle.
These are risk mechanisms, not predictions. The key question is which would force a cut to earnings estimates or a lower multiple than the market currently prices in.
Why AAOI Stock Could Outperform
Structural drivers behind the upside case and why the stock could outperform over the next 12 months.
AI analysis · updated June 18, 2026
Stock analysis availability
Investors have access to comprehensive stock analysis, price targets, and earnings estimates for AAOI, aiding informed decision-making.
Investor relations resources
Applied Optoelectronics provides detailed business information for stockholders and financial analysts through its Investor Relations website.
Real-time stock data
Real-time AAOI stock price, news, and industry-best analysis are available, enabling timely investment actions.
Vital stock information
Latest stock quotes, history, and news are readily accessible to support stock trading and investing in AAOI.
A real bull case compounds — each driver matters most when it strengthens margins, supports capital returns, and keeps the company above the market's minimum growth bar simultaneously.
AAOI Stock Price Performance
52-week range context and price returns across multiple time horizons. Dividend contribution is shown separately in the Capital Return section.
Current Price
$161.85
52W Range Position
67%
52-Week Range
Current price plotted between the 52-week low and high.
52-Week Low
$16.90
+857.7% from the low
52-Week High
$233.67
-30.7% from the high
1 Month
-6.59%
3 Month
+74.73%
YTD
+308.7%
1 Year
+718.7%
3Y CAGR
+214.6%
5Y CAGR
+81.4%
10Y CAGR
+31.8%
Range context matters because valuation compression and earnings misses rarely hit from the same starting point. A stock already far below its high can still fall, but it is no longer carrying the same embedded optimism as one pressing a fresh peak.
AAOI vs Peers
Valuation, growth, and margin comparison against the closest publicly traded peers for this company.
Peer Set
Accurate peer set
Forward PE
156.6x
vs 68.5x median
+129% above peer median
Revenue Growth
+24.6%
vs +9.0% median
+173% above peer median
Net Margin
-8.5%
vs 7.9% median
-209% below peer median
| Company | Mkt Cap | Fwd PE | Rev Grw | Margin | Rating | Upside |
|---|---|---|---|---|---|---|
AAO AAOI Applied Optoelectronics, Inc. | $12.8B | 156.6x | +24.6% | -8.5% | Buy | -1.1% |
LIT LITE Lumentum Holdings Inc. | $60.7B | 103.7x | +13.3% | 17.7% | Buy | +16.0% |
OES OESX Orion Energy Systems, Inc. | $33M | — | +8.3% | -3.7% | — | — |
COH COHR Coherent, Inc. | $61.8B | 71.4x | +9.0% | 10.6% | Buy | -16.8% |
VIA VIAV Viavi Solutions Inc. | $10.9B | 50.3x | +6.1% | -4.0% | Buy | -31.6% |
CIE CIEN Ciena Corporation | $60.6B | 65.6x | +10.5% | 7.9% | Buy | +15.2% |
This peer comparison reflects companies with similar business models, product lines, or market positioning, supplemented by industry grouping when direct matches are limited.
FAQ
7 questionsAAOI Investor Questions
Common questions answered from live analyst data and company financials.
01Is Applied Optoelectronics, Inc. (AAOI) stock a buy or sell in 2026?
Applied Optoelectronics, Inc. (AAOI) is rated Buy by Wall Street analysts as of 2026. Of 16 analysts covering the stock, 7 rate it Buy or Strong Buy, 6 rate it Hold, and 3 rate it Sell or Strong Sell. The consensus 12-month price target is $160, implying -1.1% from the current price of $162.
02What is the AAOI stock price target for 2026?
The Wall Street consensus price target for AAOI is $160 based on 16 analyst estimates. The high-end target is $160 (-1.1% from today), and the low-end target is $160 (-1.1%).
03Is Applied Optoelectronics, Inc. (AAOI) stock overvalued in 2026?
AAOI trades at 156.6x times forward earnings. The stock currently trades at a discount to the broader market. Based on current multiples versus the peer group, the relative model signals limited: expensive versus peers. Whether the stock is over or undervalued ultimately depends on whether consensus earnings estimates are achievable.
04What are the main risks for Applied Optoelectronics, Inc. (AAOI) stock in 2026?
The primary risks for AAOI in 2026 are: (1) Execution risks — The company faces severe structural execution risks despite high demand, as highlighted by its dramatic crossroads between demand and operational challenges. (2) Financial performance — Despite revenue growth and margin improvement, the company still reports net losses, indicating ongoing profitability challenges. (3) Market cyclicality — AAOI has historically been viewed as a cyclical provider in CATV and FTTH markets, which could pose risks if demand shifts. Each factor has the potential to pressure earnings or compress the stock's valuation multiple.
05What is Applied Optoelectronics, Inc.'s revenue and earnings forecast?
Analyst consensus estimates AAOI will report consensus revenue of $632M (+24.6% year-over-year) and EPS of $-0.78 (-37.1% year-over-year) for the upcoming fiscal year. The following year, analysts project $751M in revenue.
06When does Applied Optoelectronics, Inc. (AAOI) report its next earnings?
Applied Optoelectronics, Inc. is expected to report its next earnings on approximately 2026-08-06. Consensus expects EPS of $0.03 and revenue of $190M. Over recent quarters, AAOI has beaten EPS estimates 50% of the time.
07How much free cash flow does Applied Optoelectronics, Inc. generate?
Applied Optoelectronics, Inc. (AAOI) had a free cash outflow of $239M in free cash flow over the trailing twelve months — a free cash flow margin of 47.1%. AAOI returns capital to shareholders through and share repurchases ($0 TTM).