Applied Optoelectronics (AAOI) and The Competition Critical Analysis

Applied Optoelectronics (NASDAQ:AAOI) is one of 110 publicly-traded companies in the “Communications Equipment” industry, but how does it compare to its peers? We will compare Applied Optoelectronics to related companies based on the strength of its earnings, risk, profitability, institutional ownership, dividends, valuation and analyst recommendations.

Volatility & Risk

Applied Optoelectronics has a beta of 3.85, indicating that its share price is 285% more volatile than the S&P 500. Comparatively, Applied Optoelectronics’ peers have a beta of 1.17, indicating that their average share price is 17% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Applied Optoelectronics and its peers, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Applied Optoelectronics	1	2	3	0	2.33
Applied Optoelectronics Competitors	1070	4013	7062	376	2.54

Applied Optoelectronics presently has a consensus target price of $143.00, suggesting a potential upside of 107.10%. As a group, “Communications Equipment” companies have a potential upside of 36.93%. Given Applied Optoelectronics’ higher probable upside, research analysts plainly believe Applied Optoelectronics is more favorable than its peers.

Valuation and Earnings

This table compares Applied Optoelectronics and its peers top-line revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Applied Optoelectronics	$455.71 million	-$38.23 million	-88.53
Applied Optoelectronics Competitors	$2.71 billion	$292.12 million	-2.42

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Applied Optoelectronics	-9.57%	-1.98%	-1.34%
Applied Optoelectronics Competitors	0.16%	-5.14%	2.95%

Insider & Institutional Ownership

61.7% of Applied Optoelectronics shares are owned by institutional investors. Comparatively, 44.4% of shares of all “Communications Equipment” companies are owned by institutional investors. 3.8% of Applied Optoelectronics shares are owned by company insiders. Comparatively, 18.4% of shares of all “Communications Equipment” companies are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Summary

Applied Optoelectronics peers beat Applied Optoelectronics on 9 of the 13 factors compared.

Applied Optoelectronics Company Profile

Applied Optoelectronics, Inc. designs, manufactures, and sells 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, distribution equipment, and amplifiers. The company sells its products to internet data center operators, cable television, telecom equipment manufacturers, fiber-to-the-home, and internet service providers through its direct and indirect sales channels. Applied Optoelectronics, Inc. was incorporated in 1997 and is headquartered in Sugar Land, Texas.