DB:FAN

Stock Analysis Report

Executive Summary

Fabrinet provides optical packaging and precision optical, electro-mechanical, and electronic manufacturing services in North America, the Asia-Pacific, and Europe.

Rewards

Trading at 4.1% below its fair value

Earnings are forecast to grow 13.09% per year

Earnings grew by 15.3% over the past year

Risk Analysis

No risks detected for FAN from our risk checks.


Snowflake Analysis

Excellent balance sheet with proven track record.


Similar Companies

Share Price & News

How has Fabrinet's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: FAN has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-4.1%

FAN

-0.4%

DE Electronic

0.1%

DE Market


1 Year Return

20.5%

FAN

10.9%

DE Electronic

14.1%

DE Market

Return vs Industry: FAN exceeded the German Electronic industry which returned 10.9% over the past year.

Return vs Market: FAN exceeded the German Market which returned 14.1% over the past year.


Shareholder returns

FANIndustryMarket
7 Day-4.1%-0.4%0.1%
30 Day-1.7%7.3%0.2%
90 Day8.3%6.3%3.3%
1 Year20.5%20.5%13.4%10.9%17.6%14.1%
3 Year25.7%25.7%47.9%43.0%14.8%4.8%
5 Year287.8%287.8%113.8%98.5%22.2%5.4%

Price Volatility Vs. Market

How volatile is Fabrinet's share price compared to the market and industry in the last 5 years?


Simply Wall St News

No news available

Valuation

Is Fabrinet undervalued compared to its fair value and its price relative to the market?

4.1%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: FAN (€58.5) is trading below our estimate of fair value (€61.02)

Significantly Below Fair Value: FAN is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: FAN is good value based on its PE Ratio (20.2x) compared to the Electronic industry average (33.9x).

PE vs Market: FAN is good value based on its PE Ratio (20.2x) compared to the German market (20.9x).


Price to Earnings Growth Ratio

PEG Ratio: FAN is poor value based on its PEG Ratio (1.5x)


Price to Book Ratio

PB vs Industry: FAN is overvalued based on its PB Ratio (2.6x) compared to the DE Electronic industry average (1.8x).


Next Steps

Future Growth

How is Fabrinet forecast to perform in the next 1 to 3 years based on estimates from 6 analysts?

13.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: FAN's forecast earnings growth (13.1% per year) is above the savings rate (-0.4%).

Earnings vs Market: FAN's earnings (13.1% per year) are forecast to grow slower than the German market (13.3% per year).

High Growth Earnings: FAN's earnings are forecast to grow, but not significantly.

Revenue vs Market: FAN's revenue (11% per year) is forecast to grow faster than the German market (5% per year).

High Growth Revenue: FAN's revenue (11% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: FAN's Return on Equity is forecast to be low in 3 years time (14.8%).


Next Steps

Past Performance

How has Fabrinet performed over the past 5 years?

18.2%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: FAN has high quality earnings.

Growing Profit Margin: FAN's current net profit margins (7.3%) are higher than last year (7.1%).


Past Earnings Growth Analysis

Earnings Trend: FAN's earnings have grown by 18.2% per year over the past 5 years.

Accelerating Growth: FAN's earnings growth over the past year (15.3%) is below its 5-year average (18.2% per year).

Earnings vs Industry: FAN earnings growth over the past year (15.3%) exceeded the Electronic industry -3.9%.


Return on Equity

High ROE: FAN's Return on Equity (12.8%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Fabrinet's financial position?


Financial Position Analysis

Short Term Liabilities: FAN's short term assets ($1.1B) exceed its short term liabilities ($313.4M).

Long Term Liabilities: FAN's short term assets ($1.1B) exceed its long term liabilities ($73.3M).


Debt to Equity History and Analysis

Debt Level: FAN's debt to equity ratio (6.6%) is considered satisfactory.

Reducing Debt: FAN's debt to equity ratio has increased from 3.1% to 6.6% over the past 5 years.

Debt Coverage: FAN's debt is well covered by operating cash flow (211.7%).

Interest Coverage: FAN earns more interest than it pays, so coverage of interest payments is not a concern.


Balance Sheet

Inventory Level: FAN has a high level of physical assets or inventory.

Debt Coverage by Assets: FAN's debt is covered by short term assets (assets are 17.3x debt).


Next Steps

Dividend

What is Fabrinet's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

company0%marketbottom25%1.3%markettop25%3.6%industryaverage1.2%forecastin3Yearsn/a

Current dividend yield vs market & industry

Notable Dividend: Unable to evaluate FAN's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate FAN's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if FAN's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if FAN's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: FAN is not paying a notable dividend for the German market.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of FAN's dividend in 3 years as they are not forecast to pay a notable one for the German market.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

2.4yrs

Average management tenure


CEO

Seamus Grady (52yo)

2.4yrs

Tenure

US$5,733,172

Compensation

Mr. Seamus Grady has been Chief Executive Officer and Director at Fabrinet since September 22, 2017. Mr. Grady served as Executive Vice President and Chief Operating Officer, Mechanical Systems Division, a ...


CEO Compensation Analysis

Compensation vs Market: Seamus's total compensation ($USD5.73M) is above average for companies of similar size in the German market ($USD2.01M).

Compensation vs Earnings: Insufficient data to compare Seamus's compensation with company performance.


Leadership Team

NamePositionTenureCompensationOwnership
David Mitchell
Founder & Chairman20.1yrsUS$591.05k0.23% $5.1m
Seamus Grady
CEO & Director2.4yrsUS$5.73m0.28% $6.3m
Harpal Gill
President & COO0yrsUS$6.37m0.17% $3.9m
Toh-Seng Ng
Executive VP & CFO7.9yrsUS$5.09mno data
Colin Campbell
VP & General Counsel3.5yrsno datano data
Mark O'Connor
Executive Vice President of Corporate Development2.1yrsno datano data
Edward Archer
Executive Vice President of Sales & Marketing0.8yrsno data0.071% $1.6m
George Mitchell
Senior Vice President of Europe0yrsno datano data

2.4yrs

Average Tenure

65yo

Average Age

Experienced Management: FAN's management team is considered experienced (2.4 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
David Mitchell
Founder & Chairman20.1yrsUS$591.05k0.23% $5.1m
Seamus Grady
CEO & Director2.4yrsUS$5.73m0.28% $6.3m
Gregory Dougherty
Independent Director1yrsUS$179.73kno data
Frank Levinson
Independent Director19.1yrsUS$298.47k0.11% $2.6m
Homa Bahrami
Independent Director7.5yrsUS$291.85k0.055% $1.2m
Thomas Kelly
Independent Director9.3yrsUS$307.97k0.10% $2.2m
Rollance Olson
Lead Independent Director9.1yrsUS$315.97k0.11% $2.5m

9.1yrs

Average Tenure

66yo

Average Age

Experienced Board: FAN's board of directors are considered experienced (9.1 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: FAN insiders have only sold shares in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Fabrinet's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Fabrinet
  • Ticker: FAN
  • Exchange: DB
  • Founded: 1999
  • Industry: Electronic Manufacturing Services
  • Sector: Tech
  • Market Cap: US$2.408b
  • Listing Market Cap: US$2.226b
  • Shares outstanding: 37.05m
  • Website: https://www.fabrinet.com

Number of Employees


Location

  • Fabrinet
  • 190 Elgin Avenue
  • George Town
  • Grand Cayman
  • KY1-9005
  • Cayman Islands

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
FNNYSE (New York Stock Exchange)YesOrdinary SharesUSUSDJun 2010
FANDB (Deutsche Boerse AG)YesOrdinary SharesDEEURJun 2010

Biography

Fabrinet provides optical packaging and precision optical, electro-mechanical, and electronic manufacturing services in North America, the Asia-Pacific, and Europe. The company offers a range of advanced optical and electro-mechanical capabilities in the manufacturing process, including process design and engineering, supply chain management, manufacturing, printed circuit board assembly, advanced packaging, integration, final assembly, and testing. Its products include switching products, including reconfigurable optical add-drop multiplexers, optical amplifiers, modulators, and other optical components and modules that enable network managers to route voice, video, and data communications traffic through fiber optic cables at various wavelengths, speeds, and over various distances. The company’s products also comprise tunable lasers, transceivers, and transponders; and active optical cables, which provide high-speed interconnect capabilities for data centers and computing clusters, as well as Infiniband, Ethernet, fiber channel, and optical backplane connectivity. In addition, it provides solid state, diode-pumped, gas, and fiber lasers used in semiconductor processing, biotechnology and medical device, metrology, and material processing industries; and differential pressure, micro-gyro, fuel, and other sensors used in automobiles, as well as non-contact temperature measurement sensors for the medical industry. Further, the company designs and fabricates application-specific crystals, lenses, prisms, mirrors, laser components, and substrates; and other custom and standard borosilicate, clear fused quartz, and synthetic fused silica glass products. It serves original equipment manufacturers of optical communication components, modules and sub-systems, industrial lasers, automotive components, medical devices, and sensors. The company was incorporated in 1999 and is based in George Town, the Cayman Islands. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/18 21:58
End of Day Share Price2020/02/18 00:00
Earnings2019/12/27
Annual Earnings2019/06/28


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.