Applied Optoelectronics, Inc.

NasdaqGM:AAOI Stock Report

Market Cap: US$1.3b

Applied Optoelectronics Valuation

Is AAOI undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

2/6

Valuation Score 2/6

  • Below Fair Value

  • Significantly Below Fair Value

  • Price-To-Sales vs Peers

  • Price-To-Sales vs Industry

  • Price-To-Sales vs Fair Ratio

  • Analyst Forecast

Share Price vs Fair Value

What is the Fair Price of AAOI when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: AAOI ($34.07) is trading below our estimate of fair value ($103.96)

Significantly Below Fair Value: AAOI is trading below fair value by more than 20%.

Key Valuation Metric

Which metric is best to use when looking at relative valuation for AAOI?

Key metric: As AAOI is unprofitable we use its Price-To-Sales Ratio for relative valuation analysis.

The above table shows the Price to Sales ratio for AAOI. This is calculated by dividing AAOI's market cap by their current revenue.
What is AAOI's PS Ratio?
PS Ratio7.3x
SalesUS$209.55m
Market CapUS$1.29b

Price to Sales Ratio vs Peers

How does AAOI's PS Ratio compare to its peers?

The above table shows the PS ratio for AAOI vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyForward PSEstimated GrowthMarket Cap
Peer Average2x
HLIT Harmonic
2.3x9.4%US$1.4b
NTCT NetScout Systems
1.9x2.5%US$1.5b
INFN Infinera
1.1x9.7%US$1.6b
DGII Digi International
2.7x2.8%US$1.1b
AAOI Applied Optoelectronics
7.3x50.7%US$1.3b

Price-To-Sales vs Peers: AAOI is expensive based on its Price-To-Sales Ratio (7.3x) compared to the peer average (2x).

Price to Sales Ratio vs Industry

How does AAOI's PS Ratio compare vs other companies in the US Communications Industry?

12 CompaniesPrice / SalesEstimated GrowthMarket Cap
COMM CommScope Holding Company
0.2x-0.08%US$977.93m
VSAT Viasat
0.2x1.8%US$876.93m
CMTL Comtech Telecommunications
0.2x4.3%US$84.44m
TESS TESSCO Technologies
0.2xn/aUS$83.30m
AAOI 7.3xIndustry Avg. 1.1xNo. of Companies12PS012345+
12 CompaniesEstimated GrowthMarket Cap
No more companies

Price-To-Sales vs Industry: AAOI is expensive based on its Price-To-Sales Ratio (7.3x) compared to the US Communications industry average (1.1x).

Price to Sales Ratio vs Fair Ratio

What is AAOI's PS Ratio compared to its Fair PS Ratio? This is the expected PS Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

AAOI PS Ratio vs Fair Ratio.
Fair Ratio
Current PS Ratio7.3x
Fair PS Ratio3.6x

Price-To-Sales vs Fair Ratio: AAOI is expensive based on its Price-To-Sales Ratio (7.3x) compared to the estimated Fair Price-To-Sales Ratio (3.6x).

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

The above table shows the analyst AAOI forecast and predictions for the stock price in 12 month’s time.
DateShare PriceAverage 1Y Price TargetDispersionHighLow1Y Actual priceAnalysts
CurrentUS$34.07
US$22.38
-34.3%
22.8%US$27.50US$14.00n/a4
Nov ’25US$16.84
US$16.00
-5.0%
26.1%US$20.00US$9.00n/a4
Oct ’25US$13.32
US$16.00
+20.1%
26.1%US$20.00US$9.00n/a4
Sep ’25US$11.35
US$14.00
+23.3%
26.7%US$18.00US$9.00n/a3
Aug ’25US$8.40
US$15.33
+82.5%
16.3%US$18.00US$12.00n/a3
Jul ’25US$8.08
US$15.33
+89.8%
16.3%US$18.00US$12.00n/a3
Jun ’25US$10.49
US$15.33
+46.2%
16.3%US$18.00US$12.00n/a3
May ’25US$9.90
US$18.00
+81.8%
9.1%US$20.00US$16.00n/a3
Apr ’25US$13.92
US$18.00
+29.3%
9.1%US$20.00US$16.00n/a3
Mar ’25US$15.41
US$18.00
+16.8%
9.1%US$20.00US$16.00n/a3
Feb ’25US$16.52
US$21.67
+31.2%
5.8%US$23.00US$20.00n/a3
Jan ’25US$19.32
US$21.00
+8.7%
4.8%US$22.00US$20.00n/a2
Dec ’24US$16.45
US$16.75
+1.8%
19.4%US$20.00US$13.50n/a2
Nov ’24US$7.72
US$15.75
+104.0%
27.0%US$20.00US$11.50US$16.842
Oct ’24US$10.97
US$15.75
+43.6%
27.0%US$20.00US$11.50US$13.322
Sep ’24US$13.94
US$15.75
+13.0%
27.0%US$20.00US$11.50US$11.352
Aug ’24US$7.03
US$6.25
-11.1%
60.0%US$10.00US$2.50US$8.402
Jul ’24US$5.96
US$6.25
+4.9%
60.0%US$10.00US$2.50US$8.082
Jun ’24US$2.21
US$3.75
+69.7%
33.3%US$5.00US$2.50US$10.492
May ’24US$1.82
US$5.25
+188.5%
42.9%US$7.50US$3.00US$9.902
Apr ’24US$2.21
US$5.25
+137.6%
42.9%US$7.50US$3.00US$13.922
Mar ’24US$2.73
US$5.25
+92.3%
42.9%US$7.50US$3.00US$15.412
Feb ’24US$2.60
US$4.83
+85.9%
39.9%US$7.50US$3.00US$16.523
Jan ’24US$1.89
US$4.83
+155.7%
39.9%US$7.50US$3.00US$19.323
Dec ’23US$2.23
US$4.83
+116.7%
39.9%US$7.50US$3.00US$16.453
Nov ’23US$2.73
US$5.10
+86.8%
37.6%US$7.50US$2.80US$7.723

Analyst Forecast: Target price is lower than the current share price.

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