Why Applied Optoelectronics, Inc. (AAOI) shares are suddenly plunging -3.44% today

What just happened? Applied Optoelectronics, Inc. (NASDAQ:AAOI) stock value has plummeted by nearly -3.44% or (-0.36 points) to $9.95 from its previous close of $10.31. Does this decline mean it the best stock to buy right now? The shares seem to have an active trading volume day with a reported 462035 contracts so far this session. AAOI shares had a relatively better volume day versus average trading capacity of 658.96 thousand shares, but with a 18.75 million float and a 2.79% run over a week, it’s definitely worth keeping an eye on. The one year price forecast for AAOI stock indicates that the average analyst price target is $10.08 per share. This means the stock has a potential increase of 1.31% from where the AAOI share price has been trading recently which is between $10.18 and $11.095. There are some brokerage firms that offer lower targets than the average, with one of them, even setting their price target at $6.5.

The shorts are running away from Applied Optoelectronics, Inc. (AAOI) stock. The latest set of short interest data was released on 28 June 2019, and the numbers show a drop in short interest in AAOI shares. While short interest still represents only 42.92% of AAOI’s float, the number of shares shorted have fallen by -46181. The number of shares shorted fell to 8000811 shares, down from 8046992 shares during the preceding fortnight. With average daily trading volumes at 802898 shares, days to cover decreased to about 18.93049 days. The most recent news story about the stock that appeared in Yahoo Finance‘s news section was titled “Why Optical Networking Stocks Soared Today” and dated July 09, 2019.

During the recent trading session for Applied Optoelectronics, Inc. (NASDAQ:AAOI), the company witnessed their stock rise $0.1 over a week and surge $0.93 from the price 20 days ago. When compared to their established 52-week high of $50.3, the high they recorded in their recent session happens to be lower. Their established 52-week high was attained by the company on 07/13/18. The recent low of $8.56 stood for a -80.21% since 06/14/19, a data which is good for most investors who are looking to take advantage of the stock’s recent rise. A beta of 2.21 is also allocated to the stock. Since the beta is greater than one, it implies that the stock is more volatile than the market, a data that traders are keeping close attention to.

Looking at the current readings for Applied Optoelectronics, Inc., the two-week RSI stands at 52.12. This figure suggests that AAOI stock, for now, is neutral, meaning that the shares are stable in terms of price movement. The stochastic readings, on the other hand, based on the current AAOI readings is similarly very revealing as it has a stochastic reading of 60.66% at this stage. This figure means that AAOI share price today is being neutral.

Technical chart claims that Applied Optoelectronics, Inc. (AAOI) would settle between $10.88/share to $11.44/share level. However, if the stock price goes below the $9.96 mark, then the market for Applied Optoelectronics, Inc. becomes much weaker. If that happens, the stock price might even plunge as low as $9.61 for its downside target. The stock is currently in the green zone of MACD, with the indicator reading 0.27. Traders are always alerted for the move of a stock above or below the zero line due to the fact that the reading is an indicator of the position of the short-term average relative to the long-term average. If the MACD is above the zero line, then the short-term average relative is above that of the long-term average, thus implying an upward momentum. Vice versa is the case if the MACD is below the zero line.

Analysts at Rosenblatt raised their recommendation on shares of AAOI from Sell to Neutral in their opinion released on June 27. Raymond James analysts have lowered their rating of Applied Optoelectronics, Inc. (NASDAQ:AAOI) stock from Outperform to Mkt Perform in a separate flash note issued to investors on February 22. Analysts at Needham lowered the stock to a Hold call from its previous Buy recommendation, in a research note that dated back to February 22.

AAOI equity has an average rating of 3.12, with the figure leaning towards a bullish end. 8 analysts who tracked the company were contacted by Reuters. Amongst them, 5 rated the stock as a hold while the remaining 3 were split even though not equally. Some analysts rate the stock as a buy or a strong buy while others rated it as a sell. 1 analysts rated Applied Optoelectronics, Inc. (NASDAQ:AAOI) as a buy or a strong buy while 2 advised that investors should desist from purchasing the stock or sell them if they already own the company’s stock.

Moving on, AAOI stock price is currently trading at 0X forward 12-month Consensus EPS estimates, and its P/S ratio is 3.05 while for the average stock in the same group, the multiple is 1.61. Applied Optoelectronics, Inc. current P/E ratio of 13.83 means it is trading at a discount against its industry’s 18.23. In the past 5 years, this ratio for the stock has been fluctuating between 13.29 and 39.78.

Applied Optoelectronics, Inc. (AAOI)’s current-quarter revenues are projected to climb by nearly -51.09% to hit $42.95 million, based on current Zacks Consensus Estimate. The firm’s full-year revenues are expected to expand by over -25.03% from $267460 to a noteworthy $200520. At the other end of the current quarter income statement, Applied Optoelectronics, Inc. is expected to see its adjusted earnings surge by roughly -157.81% to hit $-0.37 per share. For the fiscal year, AAOI’s earnings are projected to climb by roughly -202.83% to hit $-1.09 per share.