Contrasting Applied Optoelectronics (AAOI) and its Competitors

Applied Optoelectronics (NASDAQ: AAOI) is one of 67 public companies in the “Communications & Networking” industry, but how does it compare to its competitors? We will compare Applied Optoelectronics to related companies based off the strength of its institutional ownership, valuation, dividends, earnings, analyst recommendations, profitability and risk.

Risk & Volatility

Applied Optoelectronics has a beta of 3.06, indicating that its stock price is 206% more volatile than the S&P 500. Comparatively, Applied Optoelectronics’ competitors have a beta of 1.17, indicating that their average stock price is 17% more volatile than the S&P 500.

Profitability

This table compares Applied Optoelectronics and its competitors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Applied Optoelectronics 21.92% 31.31% 21.96%
Applied Optoelectronics Competitors -1.68% -6.44% 0.52%

Earnings and Valuation

This table compares Applied Optoelectronics and its competitors gross revenue, earnings per share and valuation.

Gross Revenue EBITDA Price/Earnings Ratio
Applied Optoelectronics $368.63 million $98.06 million 13.94
Applied Optoelectronics Competitors $2.86 billion $628.08 million 25.81

Applied Optoelectronics’ competitors have higher revenue and earnings than Applied Optoelectronics. Applied Optoelectronics is trading at a lower price-to-earnings ratio than its competitors, indicating that it is currently the more affordable than other companies in its industry.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Applied Optoelectronics and its competitors, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Applied Optoelectronics 3 0 6 1 2.50
Applied Optoelectronics Competitors 470 2681 4029 193 2.54

Applied Optoelectronics presently has a consensus price target of $83.38, indicating a potential upside of 43.48%. All “Communications & Networking” companies have a potential upside of 28.40%. Given Applied Optoelectronics’ higher possible upside, equities research analysts plainly believe Applied Optoelectronics is more favorable than its competitors.

Institutional & Insider Ownership

81.7% of Applied Optoelectronics shares are held by institutional investors. Comparatively, 64.0% of shares of all “Communications & Networking” companies are held by institutional investors. 8.2% of Applied Optoelectronics shares are held by company insiders. Comparatively, 12.5% of shares of all “Communications & Networking” companies are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Summary

Applied Optoelectronics beats its competitors on 8 of the 13 factors compared.

About Applied Optoelectronics

Applied Optoelectronics, Inc. is a vertically integrated provider of fiber-optic networking products, primarily for networking end markets, such as Internet data center, cable television (CATV), fiber-to-the-home (FTTH) and telecommunications (telecom). The Company designs and manufactures a range of optical communications products at varying levels of integration, from components, subassemblies and modules to turnkey equipment. To Internet-based data center operators, it supplies optical transceivers that plug into switches and servers within the data center and allow these network devices to send and receive data over fiber optic cables. The Company supplies a range of products, including lasers, transmitters and transceivers, and turnkey equipment, to the CATV market. The Company designs, manufactures and integrates its own analog and digital lasers using a combination of Metal Organic Chemical Vapor Deposition (MOCVD) and its Molecular Beam Epitaxy (MBE) fabrication process.

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