Applied Optoelectronics, Inc. Fundamental Analysis (NASDAQ: AAOI)
Applied Optoelectronics, Inc. Fundamental Analysis (NASDAQ: AAOI)
Applied Optoelectronics, Inc. (NASDAQ: AAOI) shows moderate financial fundamentals with a PE ratio of -114.95, profit margin of -4.39%, and ROE of -2.28%. The company generates $0.8B in annual revenue with strong year-over-year growth of 82.75%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 30.6/100 based on profitability, valuation, growth, and balance sheet metrics. The F grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze AAOI's fundamental strength across five key dimensions:
Efficiency Score
WeakAAOI struggles to generate sufficient returns from assets.
Valuation Score
ExcellentAAOI trades at attractive valuation levels.
Growth Score
ExcellentAAOI delivers strong and consistent growth momentum.
Financial Health Score
ExcellentAAOI maintains a strong and stable balance sheet.
Profitability Score
WeakAAOI struggles to sustain strong margins.
Key Financial Metrics
Is AAOI Expensive or Cheap?
P/E Ratio
AAOI trades at -114.95 times earnings. This suggests potential undervaluation.
PEG Ratio
When adjusting for growth, AAOI's PEG of -1.05 indicates potential undervaluation.
Price to Book
The market values Applied Optoelectronics, Inc. at 1.88 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 475.50 times EBITDA. This signals the market has high growth expectations.
How Well Does AAOI Make Money?
Net Profit Margin
For every $100 in sales, Applied Optoelectronics, Inc. keeps $-4.39 as profit after all expenses.
Operating Margin
Core operations generate -6.78 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $-2.28 in profit for every $100 of shareholder equity.
ROA
Applied Optoelectronics, Inc. generates $-1.05 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Applied Optoelectronics, Inc. generates limited operating cash flow of $-112.91M, signaling weaker underlying cash strength.
Free Cash Flow
Applied Optoelectronics, Inc. generates weak or negative free cash flow of $-739.73M, restricting financial flexibility.
FCF Per Share
Each share generates $-8.15 in free cash annually.
FCF Yield
AAOI converts -15.46% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
-114.95
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
-1.05
vs 25 benchmark
P/B Ratio
Price to book value ratio
1.88
vs 25 benchmark
P/S Ratio
Price to sales ratio
5.99
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.16
vs 25 benchmark
Current Ratio
Current assets to current liabilities
2.34
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
-0.02
vs 25 benchmark
ROA
Return on assets percentage
-0.01
vs 25 benchmark
ROCE
Return on capital employed
-0.02
vs 25 benchmark
How AAOI Stacks Against Its Sector Peers
| Metric | AAOI Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | -114.95 | 31.99 | Better (Cheaper) |
| ROE | -2.28% | 792.00% | Weak |
| Net Margin | -4.39% | -4096.00% (disorted) | Weak |
| Debt/Equity | 0.16 | 0.96 | Strong (Low Leverage) |
| Current Ratio | 2.34 | 9.72 | Strong Liquidity |
| ROA | -1.05% | 1069333.00% | Weak |
AAOI outperforms its industry in 3 out of 6 key metrics, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Applied Optoelectronics, Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
-29.43%
Industry Style: Growth, Innovation, High Beta
DecliningEPS CAGR
76.24%
Industry Style: Growth, Innovation, High Beta
High GrowthFCF CAGR
-44.00%
Industry Style: Growth, Innovation, High Beta
Declining