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Investing.com - B.Riley lowered its price target on Applied Optoelectronics (NASDAQ:AAOI) to $13.00 from $15.00 while maintaining a Neutral rating on the stock. The company’s stock, currently trading at $22.33, has shown significant volatility with a beta of 2.72, though it has delivered a remarkable 160% return over the past year.
The company reported second-quarter sales of $103 million and earnings per share of $(0.16), falling short of consensus estimates of $105.9 million and $(0.07), respectively. Revenue increased 3.1% quarter-over-quarter, with 400G products growing 212% to $9 million after a 79% drop in the first quarter. According to InvestingPro data, the company maintains healthy liquidity with a current ratio of 1.88, though profitability remains a challenge with negative earnings over the last twelve months.
Data center revenue was dominated by 100G products, which accounted for approximately 70% and generated $31 million. The company expects Amazon (NASDAQ:AMZN) to be a major customer for both 400G products, which have been qualified, and 800G products, which are anticipated to be qualified in September or October.
CATV revenue declined 13% quarter-over-quarter to $56 million after a strong first quarter. The company also experienced another spike in receivables of approximately $40 million in the second quarter, which management attributed to longer payment terms for a high-volume distributor customer.
For the third quarter, Applied Optoelectronics guided revenue between $115 million and $127 million with earnings per share between $(0.10) and $(0.03), compared to consensus estimates of $118.7 million and $(0.01). InvestingPro analysis reveals an impressive 89% revenue growth forecast for the current fiscal year. Get access to 8 more key ProTips and comprehensive financial health metrics with an InvestingPro subscription.
In other recent news, Applied Optoelectronics reported its financial results for the second quarter of 2025, revealing a larger-than-expected loss. The company posted an earnings per share loss of $0.16, doubling the anticipated loss of $0.08. Revenue came in at $103 million, falling short of the forecasted $106.16 million. Despite these results, Rosenblatt reiterated its Buy rating on the company with a $34.00 price target, highlighting sequential 400G growth and projecting that 400G sales will surpass 100G in the fourth quarter of 2025. Rosenblatt also noted that the third-quarter guidance suggests a potential record revenue of approximately $121 million, with Amazon expected to become a significant customer. Meanwhile, Needham maintained its Buy rating and a $32.00 price target, even though the company’s revenue was 3% below expectations and earnings per share missed by $0.09 due to higher operating expenses. Both firms remain optimistic about the company’s future, with Needham emphasizing the potential of 800G technology. These developments reflect the current state of Applied Optoelectronics as it navigates through financial challenges and future growth opportunities.
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