10-14-2017, 12:19 AM
What about risk?
- We have a company who lost most of its business of its largest customer, yet still managed to grow overall revenues by 25%+
- Even if it lost all business of that customer it would do little additional harm
- There is little to suggest this is a permanent loss, AAOI's products keep getting market validation and management argues it's a transitionary problem with Amazon due to technology migration
- The shares are fairly cheap.
I'm sure there are risks, but much of the Amazon risk has been priced in and there is little residual Amazon risk due to the fact that they are now only a $8M-$9M customer. There is also the "risk" that this recovers to more normal levels. The share price will be down until we get more clarity, but there is zero evidence that demand from other customers besides Amazon is slowing, quite the contrary.