Market Pulse50Neutral

Applied Optoelectronics, Inc.Opportunity Rank #293(AAOI) Intrinsic Value & DCF Analysis (2026)

Sector: Technology

Current Price

$106.19

Last updated: Mar 13, 2026

Price vs Intrinsic Value

$106.19
Price
-$1.57
Intrinsic Value
Overvalued by 101%MOS: -$1.26

Fundamental Score

12/100
Bearish

Weighted across 6 signals

Narrative Score

74/100
Strong

No change vs previous

The intrinsic value of Applied Optoelectronics, Inc. (AAOI) is estimated at $-1.57 per share based on a 10-year discounted cash flow (DCF) analysis. At the current price of $106.19, the stock appears overvalued relative to its projected cash flow fundamentals. This estimate assumes a -46.90% long-term growth rate and an 11.94% discount rate, reflecting expected future free cash flow and cost of capital.

The intrinsic value of Applied Optoelectronics, Inc. (AAOI) is estimated at $-1.57 per share based on a 10-year discounted cash flow (DCF) analysis. At the current price of $106.19, the stock appears overvalued relative to its projected cash flow fundamentals. This estimate assumes a -46.90% long-term growth rate and an 11.94% discount rate, reflecting expected future free cash flow and cost of capital.

Valuation Details

-$1.57
▼ -101.48% downside
20% margin of safety: -$1.26
Years: 10Growth Rate: -46.90%
Want to create your own valuation? Create a free account.

Capital Efficiency

Average Quarterly ROIC
-1.51%
Cost of Capital (estimated)8%
Value StatusUnderperforming Capital

The company is earning below its required return. This may indicate inefficient use of capital or excess cash that isn't being reinvested.

Complete historical ROIC is available with
.

Fundamental Details

12/100
BearishWeighted across 6 signals
DCF Discount
101.5% premium to price
0
FCF Yield
-2.2% trailing FCF yield
0
ROIC vs WACC
ROIC -1.5% vs WACC 8.0% (-0.2x)
0
Net Debt / FCF
0.3x net debt to FCF
94
Buybacks
Share count growing
30
FCF CAGR (5Y)
-63.3% 5Y FCF CAGR (adjusted)
0
Strengths: Net Debt / FCF. Concerns: DCF Discount, FCF Yield.

Narrative Details

74/100
Strong
Vs 6-Month Baseline:Low (14th pct)Weighted across 6 recent drivers
Trend: StableConfidence: 87%Updated: 1d ago
Sources: 54 (48 News · 6 Analyst)
Drivers(last 30 days)
42 news sentiment+1.9
2 upgrade headlines+0.3
Earnings beat+0.1
Analyst upgrades+0.1
3 regulatory scrutiny-0.0
5 analyst reiterations0.0

Investment Coach

Updating... 1d ago
AVOIDConfidence: 81%
Thesis
Applied Optoelectronics, Inc. is significantly overvalued with an estimated fair value more than 100% below its current price, supported by a weak fundamental profile and negative returns relative to its cost of capital. Despite a stable but weak narrative score, the company's financial health and valuation metrics suggest avoiding the stock at this time.
Key Risk
The primary risk is that the company's fundamentals and returns fail to improve, potentially leading to further declines in valuation and investor confidence.
Signals To Watch
  • Price moves to at least a mid-teens discount to fair value
  • Sustained improvement in ROIC versus WACC spread
  • Meaningful shifts in the narrative score direction
Ask the Coach - Available with
Historical Growth Rates
Free Cash Flow- - -Trend CAGR (Adjusted): -46.90%5 Year CAGR (Adjusted): -64.37%

Free Cash Flow (in millions)

TTM2025202420232022202120202019201820172016201520142013201220112010
-$174$5-$26$2-$10-$1-$24$30$91$155$107$42$52$3$3-$20$

How Intrinziq Estimates Fair Value

Intrinziq estimates Applied Optoelectronics, Inc.'s intrinsic value using a discounted cash flow (DCF) model based on free cash flow trends and a market-based discount rate. The model projects future cash flows over ten years and discounts them using a market return assumption to estimate fair value.

Applied Optoelectronics, Inc.Technology

Applied Optoelectronics, Inc. designs, manufactures, and sells various fiber-optic networking products worldwide. It offers optical modules, lasers, subassemblies, transmitters and transceivers, and turn-key equipment, as well as headend, node, and distribution equipment. The company sells its products to internet data center operators, cable television and telecom equipment manufacturers, and internet service providers through its direct and indirect sales channels. Applied Optoelectronics, Inc. was incorporated in 1997 and is headquartered in Sugar Land, Texas.