AAOI beats across the board, then reverses course and drops 26%
I’d just finished writing my AAOI earnings preview at 1 a.m. The levels I marked were a break below 45.97, with 40 next.
Then earnings came out, 45.97 broke, and 40 got pierced too. The low was 39.41.
It’s at 43.3 now, down 26.5% in 24 hours. Put simply, this stock couldn’t hold up on earnings night.
First, the numbers: the results themselves actually weren’t bad.
EPS was $0.17 versus expectations of $0.14, a 21% beat.
Revenue was $269.9 million versus expectations of $268.1 million, also a beat, and up 127.5% year over year.
That’s a sixth consecutive quarter of record revenue. It also swung to a GAAP profit, earning $6.3 million versus a $17.9 million loss in the same quarter last year.
Data center revenue was $155.6 million, up 254% year over year. That’s the real foundation of its AI optical transceiver business.
The bulls do have some solid cards in hand.
Q4 revenue guidance is $385 million to $420 million, up 43% to 56% from Q3. The midpoint of EPS guidance is $0.555, more than three times Q3’s figure.
Northland just set a $120 price target on November 3. At the current price of 43.3, the stock is still below 40% of that target.
Management has previously said that demand will continue to exceed capacity through mid-2027. Orders aren’t the problem.
But earnings-night rules mean looking only at the next quarter. No matter how good the past looks, it’s all in the rearview mirror.
The midpoint of Q4 revenue guidance is $402.5 million, while analyst consensus is $427 million—a shortfall of nearly 6%.
Non-GAAP gross margin was 28.7%, missing even the company’s own 29% to 30.5% guidance. The CFO admitted it was because lower-margin 400G products made up a larger share.
Optical stocks are getting crushed across the board: LITE -14.8%, COHR -14.9%, MRVL -11.4%. AAOI isn’t the only one having a bad day.
Add in the broader market: the Nasdaq 100 fell 6.4% last night. In that headwind, a small guidance miss got magnified into a 26% drop.
I think it’s reasonable to be on the short side of this stock today.
Revenue only beat by 0.27%. The 21% EPS beat sounds impressive, but on earnings night the market only cares about guidance. A 6% guidance shortfall isn’t something the past beats can make up for.
But I’m not chasing the short. It pierced 40 at 39.41 and then bounced a little. Shorting here means even a brief snapback could leave you reeling.
There are just two scenarios to watch.
If it gets back above 45.97, the support from my overnight post has turned into resistance. Getting back above it would mean admitting the call was wrong. Then watch 48.43, the volume-weighted average price, followed by 53.
If it breaks below 39.41, taking out today’s low, then 35 is the next stop.
I don’t own this stock. I won’t touch it until it gets back above 45.97, and I won’t chase a short if it breaks below 39.41 either.
Nonfarm payrolls are due at 21:30 tonight, and we don’t yet know how the broader market will react. I’ll wait for the earnings-night mess to sort itself out before deciding.
Will it get back above 45.97 and prove the bears wrong, or test 39.41 again on the way to 35?
I’m betting on the latter. What about you?
$AAOI $LITE $COHR
#财报 #optical modules
I’d just finished writing my AAOI earnings preview at 1 a.m. The levels I marked were a break below 45.97, with 40 next.
Then earnings came out, 45.97 broke, and 40 got pierced too. The low was 39.41.
It’s at 43.3 now, down 26.5% in 24 hours. Put simply, this stock couldn’t hold up on earnings night.
First, the numbers: the results themselves actually weren’t bad.
EPS was $0.17 versus expectations of $0.14, a 21% beat.
Revenue was $269.9 million versus expectations of $268.1 million, also a beat, and up 127.5% year over year.
That’s a sixth consecutive quarter of record revenue. It also swung to a GAAP profit, earning $6.3 million versus a $17.9 million loss in the same quarter last year.
Data center revenue was $155.6 million, up 254% year over year. That’s the real foundation of its AI optical transceiver business.
The bulls do have some solid cards in hand.
Q4 revenue guidance is $385 million to $420 million, up 43% to 56% from Q3. The midpoint of EPS guidance is $0.555, more than three times Q3’s figure.
Northland just set a $120 price target on November 3. At the current price of 43.3, the stock is still below 40% of that target.
Management has previously said that demand will continue to exceed capacity through mid-2027. Orders aren’t the problem.
But earnings-night rules mean looking only at the next quarter. No matter how good the past looks, it’s all in the rearview mirror.
The midpoint of Q4 revenue guidance is $402.5 million, while analyst consensus is $427 million—a shortfall of nearly 6%.
Non-GAAP gross margin was 28.7%, missing even the company’s own 29% to 30.5% guidance. The CFO admitted it was because lower-margin 400G products made up a larger share.
Optical stocks are getting crushed across the board: LITE -14.8%, COHR -14.9%, MRVL -11.4%. AAOI isn’t the only one having a bad day.
Add in the broader market: the Nasdaq 100 fell 6.4% last night. In that headwind, a small guidance miss got magnified into a 26% drop.
I think it’s reasonable to be on the short side of this stock today.
Revenue only beat by 0.27%. The 21% EPS beat sounds impressive, but on earnings night the market only cares about guidance. A 6% guidance shortfall isn’t something the past beats can make up for.
But I’m not chasing the short. It pierced 40 at 39.41 and then bounced a little. Shorting here means even a brief snapback could leave you reeling.
There are just two scenarios to watch.
If it gets back above 45.97, the support from my overnight post has turned into resistance. Getting back above it would mean admitting the call was wrong. Then watch 48.43, the volume-weighted average price, followed by 53.
If it breaks below 39.41, taking out today’s low, then 35 is the next stop.
I don’t own this stock. I won’t touch it until it gets back above 45.97, and I won’t chase a short if it breaks below 39.41 either.
Nonfarm payrolls are due at 21:30 tonight, and we don’t yet know how the broader market will react. I’ll wait for the earnings-night mess to sort itself out before deciding.
Will it get back above 45.97 and prove the bears wrong, or test 39.41 again on the way to 35?
I’m betting on the latter. What about you?
$AAOI $LITE $COHR
#财报 #optical modules
