Overview
- Shares fell roughly 3.4% after the company issued Q3 guidance on Thursday that set EPS at $0.11–$0.26 and revenue at $255 million to $290 million, ranges that missed or only bracketed analyst expectations.
- AAOI reported record second-quarter revenue of $191.9 million, up 86% year over year, and adjusted EPS of $0.06, marking its fifth consecutive quarter of record sales.
- Management said limited supply of digital signal processors has pushed the 1.6-terabit transceiver ramp into Q4 and delayed gross margin targets by one to two quarters, a timing change that affects a roughly $200 million hyperscale order tied to that product.
- Analysts responded by trimming estimates and price targets, with Needham lowering its target from $220 to $190 while keeping a Buy rating, and the six-analyst consensus sitting at Hold with an average target near $141.80.
- Insiders sold about 506,215 shares worth $87.4 million over the past 90 days and the company reiterated its full-year revenue goal, making successful Q4 execution and improved DSP supply the key risks to meeting annual guidance.