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Investing.com - Fabrinet (NYSE:FN)’s latest financial results suggest favorable conditions for several major telecommunications and networking companies, according to a new Raymond (NSE:RYMD) James analysis released Monday. The company, currently valued at $11.66 billion, has demonstrated robust financial health with a "GREAT" rating according to InvestingPro metrics, supported by strong revenue growth of 17% over the last twelve months.
The report highlights that Cisco (NASDAQ:CSCO), which represents 18% of Fabrinet’s customer base, saw sales increase 59% year-over-year in fiscal year 2025. Strength in ZR/ZR+ technology is specifically noted as a positive indicator for Cisco’s performance. This growth aligns with Fabrinet’s solid financial position, maintaining a healthy current ratio of 3.32 and trading at a P/E ratio of 36.
Coherent (NYSE:COHR) may benefit most significantly from the analysis, as Raymond James suggests that component shortages experienced by Fabrinet provide "solid evidence" that Coherent’s recent slowdown in datacom was supply-related rather than due to competitive losses. This insight comes after Coherent shares declined following below-expectation results in its fiscal fourth quarter 2025.
The report also indicates positive implications for Lumentum, noting that Fabrinet’s 100G/200G per lane EML components—where Lumentum holds a dominant position—were specifically mentioned in relation to datacom component shortages. Lumentum’s telecom sales reportedly increased 95% year-over-year and 46% quarter-over-quarter according to Raymond James estimates.
Nokia (HE:NOKIA) may also benefit through its Infinera (NASDAQ:INFN) assets, which are supported by Fabrinet, though Raymond James acknowledges uncertainty regarding Nokia’s future relationship with Fabrinet following its acquisition of Infinera. For deeper insights into Fabrinet’s financial health and detailed analysis, investors can access comprehensive research reports and additional metrics through InvestingPro, which offers exclusive access to over 1,400 detailed company analyses.
In other recent news, Fabrinet reported its fourth-quarter 2025 earnings, achieving an earnings per share (EPS) of $2.65, slightly surpassing analysts’ expectations of $2.64. The company’s revenue also exceeded forecasts, coming in at $910 million against a projected $883 million. This performance highlights Fabrinet’s ability to surpass financial projections, showcasing its strength in revenue generation. Additionally, Barclays (LON:BARC) raised its price target for Fabrinet to $329 from $234, maintaining an Equalweight rating on the stock. This adjustment is attributed to the company’s strong performance in optical demand. Barclays’ revised price target reflects confidence in Fabrinet’s future prospects, aligning with the company’s better-than-expected earnings and revenue results. These developments indicate a positive sentiment from analysts regarding Fabrinet’s current financial health.
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