On August 18, Fabrinet declined 14.01% in regular trading, trading at approximately $510.885/share, with turnover of $192 million. Despite a strong Q4 earnings report and above-consensus guidance, the stock reversed sharply as elevated valuation and outsized prior gains triggered aggressive profit-taking.

Fabrinet reported fiscal Q4 revenue of $1.316 billion, up 45% year-over-year, surpassing the consensus estimate of approximately $1.275 billion and marking a 12th consecutive quarter of record revenue. Adjusted EPS came in at $4.10, a 54.72% increase from the prior year and well above the $3.82 analyst estimate. For fiscal Q1, the company guided revenue of $1.38 billion to $1.43 billion, with a midpoint of $1.405 billion exceeding the Street expectation of $1.32 billion. Data center revenue surpassed 50% of total sales for the first time.

However, the stock had surged approximately 81.5% over the trailing 12 months, with gains exceeding 30% in August alone, pushing the P/E ratio to 51.35x. The lofty valuation combined with aggressive prior appreciation overwhelmed the positive earnings surprise, sparking broad selling across the optical communications sector.

(The above content is based on publicly available market information, generated by a program or algorithm, and is intended solely as a stock movement alert. It does not constitute investment advice or a basis for trading decisions.)