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Verdict
Quantitative factor alignment verified for current market regime.
Quant Score
Rank
#1868
Positioning
Market Dominance
Manufacturing
Electronic Equipment
$751M
Chih H. Lin
Applied Optoelectronics, Inc. designs, manufactures, and sells various fiber-optic networking products. It offers optical modules, lasers, subassemblies, transmitters and transceivers, and turn-key equipment. The company sells its products to internet data center operators, cable television and telecom equipment manufacturers, and internet service providers.
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Get full access to institutional-quality research tools with Blank Capital Pro.
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Get full access to institutional-quality research tools with Blank Capital Pro.
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| Stock | Rating | Score▼ | Quality | Value | Momentum | P/E | EV/EBITDA | ROE | ROA | Gross Mgn | Op Mgn | Net Mgn | Rev Growth | Div Yield | D/E | Mkt Cap | AUDIT |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
$UL UNILEVER PLC | 78 | 96 | 98 | 59 | - | - | - | - | - | - | - | - | - | - | $0 | VS | |
$ASML ASML HOLDING NV | 77 | 89 | 86 | 83 | - | - | - | - | - | - | - | - | - | - | $0 | VS | |
$ESLT ELBIT SYSTEMS LTD | 76 | 81 | 87 | 85 | - | - | - | - | - | - | - | - | - | - | $0 | VS | |
$MT ArcelorMittal | 75 | 71 | 98 | 85 | - | - | - | - | - | - | - | - | - | - | $0 | VS | |
$AMAT APPLIED MATERIALS INC /DE | 75 | 85 | 87 | 84 | 20.9x | 13.6x | 32.9% | 20.5% | 48.8% | 30.6% | 24.4% | 7.7% | 0.9% | 32.0x | $148.6B | VS | |
$SIMO Silicon Motion Technology CORP | 75 | 84 | 86 | 85 | - | - | - | - | - | - | - | - | - | - | $0 | VS | |
$CODA Coda Octopus Group, Inc. | 74 | 83 | 90 | 79 | 16.3x | 11.9x | 7.4% | 7.5% | 68.3% | 19.5% | 18.2% | 29.0% | 0.0% | 0.0x | $84M | VS | |
$GSK GSK plc | 74 | 84 | 90 | 70 | - | - | - | - | - | - | - | - | - | - | $0 | VS | |
$EFXT Enerflex Ltd. | 74 | 80 | 91 | 83 | - | - | - | - | - | - | - | - | - | - | $0 | VS | |
$BUD Anheuser-Busch InBev SA/NV | 74 | 84 | 97 | 63 | - | - | - | - | - | - | - | - | - | - | $0 | VS | |
$AAOI APPLIED OPTOELECTRONICS, INC. | 51 | 39 | 35 | 78 | - | - | -9.7% | -5.5% | 28.3% | -16.3% | -15.1% | 174.2% | 0.0% | 75.0x | $751M | ||
| SECTOR BENCH | - | - | - | - | - | 22.3x | 11.5x | -1.9% | 0.9% | 44.1% | 2.5% | 1.0% | 6.7% | 0.0% | 0.2x | - | REF |
APPLIED OPTOELECTRONICS, INC. (AAOI) receives a "Hold" rating with a composite score of 50.9/100. It ranks #1868 out of 7,333 stocks in our coverage universe and carries a 3-star rating. Ratings are driven by a 6-factor quantitative model measuring quality, value, momentum, investment, stability, and short interest.
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Outperforming peers — winners tend to keep winning over 3-12 months
Expensive relative to fundamentals — limited margin of safety
Average quality profile
High volatility — wider range of outcomes increases timing risk
Aggressive spending — empire-building risk, dilutive growth
Mid-range overall rating
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Relative valuation derived from Manufacturing sector benchmarks. Model weights: EV/EBITDA (40%), P/B (35%), P/S (25%). Re-calculated daily.
No analyst ratings for AAOI.
View All RatingsROIC -68.0% vs WACC 23.7% (spread -91.7%)
GM 28% vs sector 44%, OM -16% vs sector 3%
Capital turnover 5.61x, R&D intensity 18.6%
Rev growth 174%, 10yr history
Interest coverage -20.2x
Composite assessment of profitability, capital efficiency, and financial strength. Top-tier entities demonstrate sustainable cash flow generation and elite competitive moats.
Profit generated per dollar of shareholder equity
Efficiency of asset utilization
Pricing power and cost efficiency
Core business profitability
Bottom-line profitability
The Quality factor evaluates the persistence and magnitude of realized cash flows. Companies with scores >70 exhibit superior pricing power and structural financial resilience through diverse economic regimes.
Our uncertainty rating tracks the predictability of future cash flows and potential for permanent capital loss. Moderate visibility with standard industry cyclicality.
We rate APPLIED OPTOELECTRONICS, INC. (AAOI) as a Hold with a composite score of 50.9/100 at a current price of $56.37. The stock presents a mixed quantitative picture — neither compelling enough to warrant new accumulation nor weak enough to justify selling.
APPLIED OPTOELECTRONICS, INC. holds a top-quartile position (#0 of 50) within the Manufacturing sector, based on our composite quantitative scoring across quality, value, momentum, and stability factors. The composite score of 50.9/100 places it at rank #1868 in our full universe.
The near-term outlook is constructive, with revenue growing at 174% and momentum in the 78th percentile confirming positive market sentiment. The combination of strong top-line growth and favorable price dynamics suggests the company is executing well on its growth strategy.
No Moat
Very High
Poor
Fair Value
Positive momentum indicates institutional accumulation.
Stable competitive position in a defensive sector.
Vulnerability to macroeconomic shocks and interest rate volatility.
APPLIED OPTOELECTRONICS, INC. represents a hold based on multi-factor quantitative performance.
Our model assigns APPLIED OPTOELECTRONICS, INC. a Hold rating, with a composite score of 50.9/100 and 3 out of 5 stars. Ranked #1868 of 7,333 stocks, AAOI presents a mixed quantitative picture — neither compelling enough to initiate new positions nor weak enough to warrant selling. Investors already holding may consider maintaining their position while monitoring for changes in the factor profile.
AAOI's quality score of 39/100 is below average, suggesting challenges with profitability or capital efficiency. The company reports a return on equity of -9.7% (sector avg: -1.9%), gross margins of 28.3% (sector avg: 44.1%), net margins of -15.1% (sector avg: 1.0%). Investors should examine whether management is actively addressing these weaknesses or if they reflect structural industry headwinds.
With a value score of 35/100, AAOI appears somewhat expensive relative to its fundamentals. Key valuation metrics include a P/B ratio of 6.31x. Investors paying a premium here are likely betting on above-average growth or margin expansion to justify current prices.
APPLIED OPTOELECTRONICS, INC.'s investment score of 20/100 suggests limited reinvestment activity. Key growth metrics include revenue growth of 174.2% vs. a sector average of 6.7% and a return on assets of -5.5% (sector: 0.9%). While this can be positive for mature, cash-generative businesses returning capital to shareholders, it may also signal a lack of growth opportunities or management conservatism.
AAOI shows strong momentum characteristics with a score of 78/100. The stock has been trending above key moving averages, indicating solid demand from institutional buyers. Revenue growth stands at 174.2% year-over-year, while a beta of 3.73 reflects its sensitivity to broader market moves. This level of momentum typically signals sustained investor confidence and favorable near-term price action.
APPLIED OPTOELECTRONICS, INC. registers a low stability score of 16/100, indicating high volatility and potentially stressed financial conditions. Key stability metrics include a beta of 3.73 and a debt-to-equity ratio of 75.00x (sector avg: 0.2x). Stocks at this level carry elevated capital loss risk and may be unsuitable for conservative portfolios without careful risk management.
AAOI carries a short interest score of 68/100, indicating moderate short selling activity. This is a neutral reading — not enough to signal systemic bearishness, but worth monitoring. Specific risk factors include high market sensitivity (beta: 3.73), elevated leverage (D/E: 75.00x), small-cap liquidity risk. At $751M market cap (small-cap), APPLIED OPTOELECTRONICS, INC. offers reasonable institutional liquidity.
APPLIED OPTOELECTRONICS, INC. is a small-cap company in the Manufacturing sector, ranked #0 of 50 in its sector (100th percentile) and #1868 of 7,333 overall (75th percentile). Key comparisons include ROE of -9.7% trailing the -1.9% sector median and operating margins of -16.3% below the 2.5% sector average. This top-quartile standing reflects exceptional competitive strength relative to Manufacturing peers.
While AAOI currently exhibits a HOLD profile, superior opportunities exist within the MANUFACTURING sector. Our model identifies several "Strong Buy" candidates with higher quality scores and more attractive valuations among direct industry competitors.
View Top Manufacturing Alpha →Quant Factor Profile
Key factor gap
Momentum (78) vs Stability (16) — closing this gap could shift the rating.
ROE 408% ABOVE SECTOR MEDIAN (FAVORABLE)
Gross Margin 36% BELOW SECTOR MEDIAN
Op. Margin 749% BELOW SECTOR MEDIAN
Above 50MA
37.18%
Net New Highs
+51081
Applied Optoelectronics' Chief Legal Officer David Kuo sold 12,500 shares on Dec. 23, 2025, as part of a pre-arranged Rule 10b5-1 trading plan adopted in May 2025, which is not a red flag for investors. The sale occurred near the company's 52-week high of $41.96. While AAOI is experiencing strong revenue growth (Q3 2025: $118.6M vs. $65.2M YoY) and positive momentum, the stock's elevated price-to-sales ratio makes it not ideal for new purchases at current levels.
Applied Optoelectronics (NasdaqGM:AAOI) received its first volume order for 800G data center transceivers from a major hyperscale customer. The company introduced a 400-milliwatt narrow-linewidth pump laser aimed at silicon photonics and AI data center applications. Management updated executive severance arrangements and started construction on a new manufacturing facility in Texas. Applied Optoelectronics, trading around $53.96, has drawn attention with very large 3 year and strong 1 year...
Applied Optoelectronics (NasdaqGM:AAOI) reports its first major volume order for 800G data center transceivers from a hyperscale customer. The company introduces a new high powered pump laser aimed at AI focused data centers. Applied Optoelectronics breaks ground on a large new manufacturing facility in Texas to support future production. Applied Optoelectronics, a supplier of optical networking products for data centers and other markets, is connecting new business wins with expanded...
Rosenblatt analyst Mike Genovese maintains Applied Optoelectronics (NASDAQ:AAOI) with a Buy and maintains $50 price target.
Applied Optoelectronics saw its stock rise over 18% after an analyst raised its price target to $34, citing potential growth in 2026 and opportunities in the AI-driven data center market.