Fundamental analysis AAOI (Applied Optoelectronics Inc)

Updated on 06/09/2026

We analyzed Applied Optoelectronics stock against the 10 quality criteria of Lubin Investment. The company gets a quality score of 5/10, meaning medium quality, and a P/FCF valuation multiple of 1056.1×.

Sector: Communication Equipment. Listing: US. Current price: 196.64 USD.

Lubin scoring methodology

Applied Optoelectronics Inc (AAOI)'s score is calculated automatically from 10 objective financial criteria, with no human intervention or opinion. Each criterion is validated (YES / PARTIAL / NO) based on thresholds drawn from the financial literature (Warren Buffett, Bettin-Mauboussin, Aswath Damodaran). The final score is the sum of validations.

The 10 quantitative criteria analyzed

1. Profitable: positive net margin
2. Growing revenue: revenue growing > 10%/year over 5 years
3. Growing earnings per share: FCF per share adjusted for stock-based compensation, > 10%/year over 5 years
4. Share count under control: stable or declining (net buybacks = value creation for shareholders)
5. Cash profitability: free cash flow margin > 10% of revenue
6. Expanding margins: operating margin widens over 5 years (operating leverage)
7. Return on invested capital: Bettin-Mauboussin Cash ROCE > 15% per year
8. Debt under control: net debt repayable in less than 3 years of free cash flow
9. Earnings converted to cash: free cash flow exceeds accounting net income
10. Net collection period: short or negative cash conversion cycle

Frequently asked questions

Is Applied Optoelectronics a quality stock?

Applied Optoelectronics gets a quality score of 5/10 (medium quality), calculated over the 10 Lubin Investment criteria: profitability, revenue and free cash flow growth, share buybacks, margins, debt and return on capital.

How is Applied Optoelectronics's score calculated?

The score is the total of validated criteria (YES / PARTIAL / NO) using thresholds drawn from the financial literature (Warren Buffett, Mauboussin, Aswath Damodaran), automatically and with no human opinion.

What is Applied Optoelectronics's P/FCF?

The price-to-free-cash-flow (P/FCF) multiple of Applied Optoelectronics stock is 1056.1×. At Lubin Investment, valuation is judged separately from quality.

Where to see Applied Optoelectronics's full analysis?

The full interactive analysis (10-criteria detail, history, P/FCF valuation, sector comparisons) is available at https://lubin-investment.com/analyse/AAOI?lng=en.

Other stocks in the Communication Equipment sector

• Ubiquiti (UI) — score 9/10, P/FCF 47.9×
• Motorola Solutions (MSI) — score 9/10, P/FCF 31.5×
• Digi International (DGII) — score 9/10, P/FCF 22.6×
• BK Technologies (BKTI) — score 9/10, P/FCF 14.3×
• Telefonaktiebolaget LM Ericsson (publ) (ERIC) — score 9/10, P/FCF 1.4×

Go further

👉 See the full interactive analysis of AAOI

Other resources : Detailed methodology · All stocks in the Communication Equipment sector · Stocks rated 10 out of 10 · Top quality companies · Lubin Investment pricing.