Applied Optoelectronics, Inc. (AAOI) Stock Analysis — Fair Value, Risk & Moat Rating
NGM · Technology · Communication Equipment
Is Applied Optoelectronics, Inc. a safe investment right now?
As of Sep 29, 2026, our estimated fair value (intrinsic value) for Applied Optoelectronics, Inc. (AAOI) stock is $163.40, versus a market price of $99.26 — Watch — Analyst Anchor. Analyst Consensus (5 analysts) — EPS model not applicable at negative earnings.
Applied Optoelectronics, Inc.'s Altman Z-Score of 11.75 places it in the safe zone. Our fair value estimate is $163.40 (Watch — Analyst Anchor). Moat rating: 2.9/5 stars.
Applied Optoelectronics, Inc. is part of the Optical Modules & Interconnect — the Data-Center Nervous System group in our AI coverage — compare its fair value against every other AI, cloud, and quantum stock through a value investing lens.
Could Applied Optoelectronics, Inc. go bankrupt? Altman Z-Score analysis
Z-Score of 11.75 is above 3.0, indicating the company is financially healthy by this metric.
- Below 1.8 — Distress Zone (high bankruptcy risk)
- 1.8 to 3.0 — Gray Zone (elevated uncertainty)
- Above 3.0 — Safe Zone (financially healthy)
What drives AAOI's Z-Score?
| Component | Formula | Value | Weight | Contribution |
|---|---|---|---|---|
| A · Working Capital / Total Assets | WC / TA | 0.3581 | 1.2 | 0.43 |
| B · Retained Earnings / Total Assets | RE / TA | -0.4194 | 1.4 | -0.59 |
| C · EBIT / Total Assets | EBIT / TA | -0.037 | 3.3 | -0.12 |
| D · Market Cap / Total Liabilities | MCap / TL | 19.3963 | 0.6 | 11.64 |
| E · Revenue / Total Assets | Rev / TA | 0.39 | 1.0 | 0.39 |
How has AAOI's financial health changed over time?
| Year | Z-Score | Zone |
|---|---|---|
| 2022 | 22.09 | Safe |
| 2023 | 28.46 | Safe |
| 2024 | 14.41 | Safe |
| 2025 | 11.75 | Safe |
Source: Calculated from AAOI's latest 10-K filing on SEC EDGAR.
Applied Optoelectronics, Inc. Fair Value & Intrinsic Value — What Is It Actually Worth?
That gap between price and value is the whole point — it is Seth Klarman's Margin of Safety, and it is why we publish the inputs rather than a verdict. If you want the mechanics, see the three-factor valuation model; for the original statement of the method, see Security Analysis, the 1934 original.
How we calculated this
| Input | Value | Source |
|---|---|---|
| Predicted EPS (α) | $0.00 | Proprietary blend of reported actuals + analyst consensus, weighted by α |
| Trailing P/E | 0.0x | Current market pricing |
| Fair P/E (β discount) | 0.0x | Trailing PE adjusted by value discount factor β, hard-capped |
| Earnings Trend (γ) | N/A | Directional signal: predicted vs trailing EPS |
Wall Street Reference: Analyst consensus target price is $163.40 (5 analysts). This is shown for reference only and is not used in our valuation model.
Source: Earnings data from SEC EDGAR filings. Market data via Yahoo Finance.
Does Applied Optoelectronics, Inc. have a durable competitive advantage?
Moat rating: 2.9/5.
A moat rating means little without the definition behind it — read our guide to economic moats before you lean on this score. It falls short of our 3.5-star wide-moat bar — see every wide-moat company we cover for the companies that clear it.
What makes up AAOI's moat score?
ROIC Stability
ROIC variability over the past decade. Score: 2/5.
Gross Margin Trend
Gross margin trajectory over the past decade. Score: 4/5.
Switching Costs
Estimated customer lock-in based on margin level. Score: 3/5.
How stable is AAOI's return on invested capital?
| Year | ROIC | Trend |
|---|---|---|
| 2022 | -18.0% | — |
| 2023 | -14.1% | Rising |
| 2024 | -43.9% | Declining |
| 2025 | -4.6% | Rising |
Source: ROIC calculated from SEC EDGAR filings.
Is Applied Optoelectronics, Inc.'s dividend safe?
Applied Optoelectronics, Inc.'s key financial metrics
| Metric | Latest | 1Y Ago | 3Y Ago | Trend |
|---|---|---|---|---|
| Revenue | $0.5B | $0.2B | $0.2B | Rising |
| Net Income | −$0.0B | −$0.2B | −$0.1B | Rising |
| Free Cash Flow | −$0.4B | −$0.1B | −$0.0B | Declining |
| Gross Margin | 30.0% | 24.8% | 15.1% | Rising |
Recent events that affect our AAOI analysis
AAOI earnings report scheduled
Upcoming report. Consensus EPS estimate: $0.14. Revenue estimate: $268.1M. Our current Fair Value: $163.40 — a significant beat or miss could shift this estimate.
AAOI analyst consensus: 50% bullish (3 of 6 analysts)
2 Strong Buy, 1 Buy, 3 Hold, 0 Sell, 0 Strong Sell. Consensus target: $163.40 (64.6% upside). Compare with our independent Fair Value: $163.40.
AAOI filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
AAOI filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
AAOI filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
AAOI filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
AAOI filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
AAOI beat EPS estimates by 300.0%
Reported EPS: $0.06 vs estimate $0.02. Earnings strength supports our Fair Value of $163.40 (64.6% above current price).
AAOI filed quarterly report (10-Q)
Quarterly update with interim financials. May signal changes to earnings trajectory and balance sheet health. View on SEC EDGAR →
AAOI filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
AAOI filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
AAOI filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
AAOI filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
AAOI filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
AAOI filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
AAOI filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
AAOI missed EPS estimates by 44.8%
Reported EPS: $-0.07 vs estimate $-0.05. Our Fair Value of $163.40 may face downward pressure if the trend continues.
AAOI filed quarterly report (10-Q)
Quarterly update with interim financials. May signal changes to earnings trajectory and balance sheet health. View on SEC EDGAR →
AAOI filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
AAOI filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
AAOI filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
AAOI filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
AAOI filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
AAOI beat EPS estimates by 91.1%
Reported EPS: $-0.01 vs estimate $-0.11. Earnings strength supports our Fair Value of $163.40 (64.6% above current price).
AAOI filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
AAOI filed annual report (10-K)
Annual filing with full-year financials. Our Altman Z-Score, Moat, and Fair Value models are derived from this data. View on SEC EDGAR →
AAOI filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
AAOI filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
AAOI filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
AAOI filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
AAOI filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
AAOI missed EPS estimates by 2.3%
Reported EPS: $-0.09 vs estimate $-0.09. Our Fair Value of $163.40 may face downward pressure if the trend continues.
AAOI filed quarterly report (10-Q)
Quarterly update with interim financials. May signal changes to earnings trajectory and balance sheet health. View on SEC EDGAR →
AAOI filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
AAOI filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
AAOI filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
AAOI filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
AAOI filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
AAOI filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
AAOI missed EPS estimates by 116.2%
Reported EPS: $-0.16 vs estimate $-0.07. Our Fair Value of $163.40 may face downward pressure if the trend continues.
AAOI filed quarterly report (10-Q)
Quarterly update with interim financials. May signal changes to earnings trajectory and balance sheet health. View on SEC EDGAR →
AAOI filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
AAOI filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
AAOI filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
AAOI filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
AAOI filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
AAOI filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
AAOI filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
AAOI filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
AAOI filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
AAOI beat EPS estimates by 46.7%
Reported EPS: $-0.02 vs estimate $-0.04. Earnings strength supports our Fair Value of $163.40 (64.6% above current price).
AAOI filed quarterly report (10-Q)
Quarterly update with interim financials. May signal changes to earnings trajectory and balance sheet health. View on SEC EDGAR →
AAOI filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
AAOI filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
AAOI filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
AAOI filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
AAOI filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
AAOI filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
AAOI filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
AAOI filed annual report (10-K)
Annual filing with full-year financials. Our Altman Z-Score, Moat, and Fair Value models are derived from this data. View on SEC EDGAR →
AAOI missed EPS estimates by 14.3%
Reported EPS: $-0.02 vs estimate $-0.02. Our Fair Value of $163.40 may face downward pressure if the trend continues.
AAOI filed 8-K (material event)
8-K filings disclose material events — acquisitions, leadership changes, or guidance revisions that may affect valuation. View on SEC EDGAR →
Common questions about Applied Optoelectronics, Inc.
What is Applied Optoelectronics, Inc. stock price today?
Applied Optoelectronics, Inc. (AAOI) stock price is $99.26 as of the latest market close, traded on the NASDAQ exchange.
What does Applied Optoelectronics, Inc. do?
Applied Optoelectronics, Inc. engages in the design, manufacture, and sale of fiber-optic networking products in the United States, Taiwan, and China. It offers optical modules, optical filters, lasers, laser components, subassemblies, transmitters and transceivers, turn-key equipment, headend, node, and distribution equipment, as well as amplifiers.
What is Applied Optoelectronics, Inc. market cap?
Applied Optoelectronics, Inc. has a market capitalization of $8.43B, classifying it as a mid-cap stock in the Technology sector.
What sector and industry is AAOI in?
Applied Optoelectronics, Inc. operates in the Technology sector, specifically within the Communication Equipment industry. It trades on the NASDAQ under the ticker symbol AAOI.
Is AAOI stock overvalued or undervalued?
Based on our valuation model, Applied Optoelectronics, Inc. trades 39.2% below our fair value estimate — potentially undervalued.
- FairValueLabs Fair Value: $163.40
- Current Price: $99.26
- Valuation Zone: Watch — Analyst Anchor
What is AAOI stock forecast and analyst target price?
Based on 5 Wall Street analysts, the consensus price target for Applied Optoelectronics, Inc. is $163.40, implying upside of 64.6% from the current price.
- Analyst High Target: $220.00
- Analyst Low Target: $109.00
Note: Analyst targets are shown for reference and are not used in our valuation model.
Is Applied Optoelectronics, Inc. revenue and earnings growing?
Here are the analyst consensus growth estimates for Applied Optoelectronics, Inc.:
- Revenue growth (current year est.): 127.9%
- EPS growth (current year est.): 361.5%
- Revenue growth (next year est.): 156.5%
- EPS growth (next year est.): 576.8%
What are Applied Optoelectronics, Inc.'s key financial metrics?
| Metric | Latest | Trend |
|---|---|---|
| Revenue | $0.5B | Rising |
| Net Income | −$0.0B | Rising |
| Free Cash Flow | −$0.4B | Declining |
| Gross Margin | 30.0% | Rising |
What is AAOI's P/E ratio?
The price-to-earnings ratio measures how much investors pay per dollar of earnings:
- Forward P/E (next 12 months est.): 21.6x
How volatile is AAOI stock?
Applied Optoelectronics, Inc. has a beta of 3.78, meaning it is significantly more volatile than the broader market. A beta above 1.0 indicates higher price swings relative to the S&P 500, while below 1.0 suggests more stability.
How much cash and debt does Applied Optoelectronics, Inc. have?
Applied Optoelectronics, Inc.'s balance sheet shows:
- Total Cash: $499.7M
- Total Debt: $300.1M
- Net Cash Position: $199.6M
A positive net cash position means the company holds more cash than debt, reducing financial risk.
What is Applied Optoelectronics, Inc.'s free cash flow?
Applied Optoelectronics, Inc. generated $-887.1M in trailing twelve-month free cash flow (from $-131.8M in operating cash flow). Free cash flow represents the cash available for dividends, buybacks, and debt reduction after all capital expenditures.
Does Applied Optoelectronics, Inc. pay a dividend?
Applied Optoelectronics, Inc. does not currently pay a regular dividend to shareholders. The company may be reinvesting all profits back into growth, or it may have suspended its dividend.
Is Applied Optoelectronics, Inc. at risk of going bankrupt?
Applied Optoelectronics, Inc.'s Altman Z-Score is 11.75, placing it in the safe zone (above 3.0) — bankruptcy risk is low. The Z-Score uses five balance sheet ratios to predict bankruptcy probability within two years.
Does Applied Optoelectronics, Inc. have a durable competitive advantage?
Applied Optoelectronics, Inc. scores 2.9/5 stars (Narrow moat · eroding) in our moat analysis:
- ROIC Stability: 2/5
- Gross Margin Trend: 4/5
- Switching Costs: 3/5
A score above 3.5 suggests meaningful pricing power and a defensible market position.
What is AAOI's return on equity (ROE)?
Applied Optoelectronics, Inc.'s return on equity is -5.5%. ROE measures how efficiently a company generates profits from shareholder equity. An ROE above 15% is generally considered strong, while below 10% may signal inefficiency.
How do I buy AAOI stock?
AAOI shares can be purchased through any brokerage account that provides access to the NASDAQ. Common steps:
- Open an account with a broker (e.g., Fidelity, Schwab, Interactive Brokers)
- Search for ticker symbol AAOI
- Place a market or limit order for your desired number of shares
This is not investment advice. Always do your own research before buying any stock.
Is AAOI a value stock or speculative?
FairValueLabs classifies Applied Optoelectronics, Inc. as Value-Speculation. It has some value characteristics but carries elevated risk factors that make it speculative. Extra due diligence is recommended.
Who is the CEO of Applied Optoelectronics, Inc.?
The current CEO of Applied Optoelectronics, Inc. is Dr. Chih-Hsiang Lin Ph.D..
What is AAOI's earnings per share (EPS)?
Earnings per share measures the company's profit allocated to each outstanding share:
- Trailing EPS (last 12 months): $-0.79
- Forward EPS (next 12 months est.): $4.60
- Analyst consensus EPS (this year): $0.68
- Analyst consensus EPS (next year): $4.60
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FairValueLabs Disclaimer
All valuations, scores, ratings, and classifications on this page are produced by the FairValueLabs internal valuation system. They do not represent actual market value, guaranteed outcomes, or professional investment advice. These are analytical estimates for educational and research purposes only.
This is not financial advice. All data is sourced from SEC EDGAR public filings. Always consult a qualified financial advisor before making investment decisions.
Last updated: Sep 29, 2026. Data sources: SEC EDGAR (financial statements), Yahoo Finance (market data, analyst consensus). Data may not reflect the most recent quarter.
AAOI analysis methodology: How we calculate fair value, Z-Scores, and moat ratings