Applied Optoelectronics Inc (AAOI) shares surged 5.60% in pre-market trading on Friday, following a mixed earnings report and a positive analyst action. The stock's movement comes despite reporting a wider-than-expected loss for the quarter ended June 30, highlighting investors' focus on the company's revenue growth and future prospects.
The company reported a quarterly adjusted loss of 16 cents per share, which was higher than the mean analyst expectation of a 7 cents per share loss. However, Applied Optoelectronics saw a significant revenue increase of 137.9% year-over-year, reaching $102.95 million, although slightly below the $105.80 million expected by analysts. This substantial revenue growth appears to have overshadowed the earnings miss in investors' eyes.
Adding to the positive sentiment, Raymond James raised its price target for Applied Optoelectronics from $18 to $25 on Friday morning, signaling confidence in the company's future performance. This upgrade, combined with the strong revenue growth, likely contributed to the stock's pre-market rally. The current average analyst rating on the shares is "buy," with a median 12-month price target of $31.00, suggesting potential upside from the last closing price of $22.33.
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