05-24-2017, 03:53 AM
We should have bought AAOI way sooner but kept eye off the ball writing, even on AAOI itself (see here, when it was a lot cheaper)
Shares of fiber-optic component supplier Applied Optoelectronics (AAOI) are up $5.85, or 9%, at $69.39, after Needham & Co.’s Alex Henderson this morning starts coverage of the stock with a Strong Buy rating, and an $85 price target, writing that the company may have “substantial upside” to Street estimates, as the data center field moves from 25-gigabit-per-second parts to 100-gigabit. “AAOI looks like the market share leader and lower cost supplier,” observes Henderson. "We expect very strong demand growth over the next several years as the Web 2.0 Big Data, Social Media and IaaS companies drive efficiencies through their current and new scaled-out Data Center footprints." Henderson’s own estimates are not wildly different from the Street consensus. His estimates for this year stand at $448.4 million in revenue and $4.60 per share in earnings. That compares to $444.8 million and $4.66 consensus, according to FactSet. For next year, he sees $527.8 million and $5.03 per share, compared to the average estimate for $523 million and $5.04.
Applied Opto Surges: Street Too ‘Timid’ About Them, Says Needham - Barron's