Please ensure Javascript is enabled for purposes of website accessibility

Why Applied Optoelectronics Inc. Stock Fell 14% in January

By Anders Bylund - Feb 12, 2018 at 11:21PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

One pessimistic analyst note cast deep, dark shadows of doubt over the upcoming fourth-quarter report.

What happened

Shares of Applied Optoelectronics (AAOI -5.82%) fell 14.4% in January, according to data from S&P Global Market Intelligence. One bearish analyst note did most of the damage.

So what

On Jan. 9, analyst firm Rosenblatt said that Applied Optoelectronics seemed to be losing some business to optical components rival InnoLight in several key accounts, including largest customer (AMZN 3.58%) and global computing giant Facebook (META 7.19%). Amazon alone accounted for more than half of Applied Optoelectronics' data center revenues in November's third-quarter report, so any share loss there could do terrible damage to the company's top and bottom lines.

A bundle of lit fiber-optic cables in front of dark clouds and a thunderstrike.

Image source: Getty Images, edited by the author.

Now what

One analyst report isn't necessarily the gospel truth, of course. We'll know more next week, as Applied Optoelectronics is set to report fourth-quarter results on Feb. 22. Until then, I'd note that the stock is trading at just 7.1 times trailing earnings. It's easy to imagine a strong bounce for this troubled stock if -- if -- Applied Optoelectronics can prove the doubters wrong.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Applied Optoelectronics, Inc. Stock Quote
Applied Optoelectronics, Inc.
$1.86 (-5.82%) $0.12, Inc. Stock Quote, Inc.
$116.46 (3.58%) $4.02
Meta Platforms, Inc. Stock Quote
Meta Platforms, Inc.
$170.16 (7.19%) $11.41

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 06/27/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.