Applied Optoelectronics (NASDAQ: AAOI) is one of 67 publicly-traded companies in the “Communications & Networking” industry, but how does it weigh in compared to its competitors? We will compare Applied Optoelectronics to similar companies based on the strength of its dividends, analyst recommendations, valuation, earnings, profitability, institutional ownership and risk.

Insider and Institutional Ownership

81.6% of Applied Optoelectronics shares are owned by institutional investors. Comparatively, 64.0% of shares of all “Communications & Networking” companies are owned by institutional investors. 8.2% of Applied Optoelectronics shares are owned by company insiders. Comparatively, 12.5% of shares of all “Communications & Networking” companies are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Risk & Volatility

Applied Optoelectronics has a beta of 3.06, meaning that its stock price is 206% more volatile than the S&P 500. Comparatively, Applied Optoelectronics’ competitors have a beta of 1.17, meaning that their average stock price is 17% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings for Applied Optoelectronics and its competitors, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Applied Optoelectronics 3 0 6 1 2.50
Applied Optoelectronics Competitors 481 2712 4083 195 2.53

Applied Optoelectronics currently has a consensus target price of $81.50, indicating a potential upside of 32.03%. As a group, “Communications & Networking” companies have a potential upside of 22.13%. Given Applied Optoelectronics’ higher probable upside, research analysts plainly believe Applied Optoelectronics is more favorable than its competitors.

Profitability

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

Net Margins Return on Equity Return on Assets
Applied Optoelectronics 21.92% 31.31% 21.96%
Applied Optoelectronics Competitors -1.71% -6.54% 0.52%

Earnings & Valuation

This table compares Applied Optoelectronics and its competitors revenue, earnings per share and valuation.

Gross Revenue EBITDA Price/Earnings Ratio
Applied Optoelectronics $368.63 million $98.06 million 14.80
Applied Optoelectronics Competitors $2.41 billion $618.33 million 26.76

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

Summary

Applied Optoelectronics beats its competitors on 8 of the 13 factors compared.

Applied Optoelectronics Company Profile

Applied Optoelectronics, Inc. is a vertically integrated provider of fiber-optic networking products, primarily for networking end markets, such as Internet data center, cable television (CATV), fiber-to-the-home (FTTH) and telecommunications (telecom). The Company designs and manufactures a range of optical communications products at varying levels of integration, from components, subassemblies and modules to turnkey equipment. To Internet-based data center operators, it supplies optical transceivers that plug into switches and servers within the data center and allow these network devices to send and receive data over fiber optic cables. The Company supplies a range of products, including lasers, transmitters and transceivers, and turnkey equipment, to the CATV market. The Company designs, manufactures and integrates its own analog and digital lasers using a combination of Metal Organic Chemical Vapor Deposition (MOCVD) and its Molecular Beam Epitaxy (MBE) fabrication process.

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