Fabrinet CFO Sverha Csaba sells shares worth over $2.5 million

Fabrinet (NYSE:FN), a global manufacturer specializing in complex optical packaging and precision optical, electro-mechanical, and electronic manufacturing services, has reported a significant transaction by one of its top executives. The company's Chief Financial Officer, Csaba Sverha, has sold a total of 9,288 ordinary shares at an average price of $270.08, netting a sum of approximately $2.5 million.

The sale, which took place on August 23, 2024, was disclosed in a recent filing with the Securities and Exchange Commission. According to the details provided, the shares were sold at prices ranging from $270.00 to $270.45. This range indicates a weighted average sale price, which the company or Sverha will provide in more detail if requested by the Commission staff, the Issuer, or a security holder of the Issuer.

In addition to the sale, the filing also disclosed that on the previous day, August 22, Sverha acquired 3,820 shares of Fabrinet stock. However, it's important to note that these shares, represented by Restricted Share Units (RSUs), were obtained at no cost and will vest over a period of three years, provided that Sverha continues his service with the company through each vesting date.

The recent transactions have altered Sverha's holdings in the company, with the CFO now owning 19,768 shares following the sale. The acquisition and subsequent sale of shares by a high-ranking company official such as a CFO is often closely monitored by investors, as it can provide insights into the executive's view of the company's current valuation and future prospects.

Fabrinet's business address is Fabrinet West, Inc., 4900 Patrick Henry Drive, Santa Clara, CA, 95054, and the company can be reached at (408) 748-0900. The company operates within the Telephone & Telegraph Apparatus industry under the Standard Industrial Classification code 3661.

Investors and stakeholders in Fabrinet may find the full details of the transactions in the company's latest Form 4 filing with the Securities and Exchange Commission.

In other recent news, Fabrinet is making notable strides in its financial performance and strategic expansion. The company's fiscal fourth-quarter sales and earnings per share (EPS) surpassed market expectations, with sales recorded at $753 million and EPS at $2.41, exceeding the consensus estimates of $733 million in sales and $2.24 EPS. Fabrinet's Datacom sector saw a 3% increase to $315 million, while its 800G+ revenue experienced a modest rise of 0.7% to $259 million.

Fabrinet also announced a new business win related to modems from Ciena (NYSE:CIEN), expected to start contributing to the company's revenue in the first half of the calendar year 2025. B.Riley increased Fabrinet's price target from $171 to $196, maintaining a Neutral rating on the stock. Similarly, Needham raised the company's stock price target to $280 from $270, retaining its Buy rating.

These developments follow the company's robust financial performance, an optimistic outlook, and the acquisition of a significant new client in their Systems division, Ciena. Additionally, Fabrinet revealed plans for a considerable expansion of its manufacturing facilities, which will now be double the size previously anticipated. The company's AI transceiver business fell short of projections by 5%, yet it still achieved a substantial 65% surge in overall Data Communications revenue. The estimated growth specific to the AI sector is around 90%. Despite a deceleration in quarter-over-quarter growth, which led to a reduction in the expected AI growth rate from 6% to 4%, the company's other business areas performed well enough to raise both revenue and earnings per share forecasts.

InvestingPro Insights

Amidst the recent executive transactions at Fabrinet (NYSE:FN), investors looking to gauge the company's financial health and market position can find valuable insights through InvestingPro metrics and tips. As of Q4 2024, Fabrinet boasts a market capitalization of $9.69 billion and has been experiencing a positive trajectory in its stock performance with a one-year price total return of 64.03%. This impressive return is further highlighted by a robust short-term surge, with the stock price increasing by 15.7% in the last week alone.

InvestingPro Tips suggest that Fabrinet holds more cash than debt on its balance sheet, which is a strong indicator of financial stability. Moreover, the company has been recognized as a prominent player in the Electronic Equipment, Instruments & Components industry. These factors could be driving the positive sentiment among analysts, as evidenced by six of them revising their earnings upwards for the upcoming period. For investors seeking more comprehensive analysis, there are additional InvestingPro Tips available at https://www.investing.com/pro/FN, which can further inform investment decisions.

However, it's worth noting that despite these strong returns, the company is trading at a high P/E ratio of 32.91, relative to near-term earnings growth, which might indicate a premium valuation. Furthermore, the gross profit margins stand at 12.35%, which InvestingPro Tips identify as weaker compared to industry peers. With the company's next earnings date set for November 4, 2024, stakeholders will be watching closely to see how these financial metrics evolve.

Overall, the combination of strong market performance, a solid balance sheet, and the potential for upward earnings revisions positions Fabrinet as a noteworthy consideration for investors. For those looking to delve deeper, InvestingPro provides a comprehensive suite of tools and analyses to aid in making informed investment choices.

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