Shares of Fabrinet (NYSE:FN) tanked in early trading on Tuesday, after the company reported its fiscal fourth-quarter results.
Here are the key analyst takeaways:
- Rosenblatt Securities analyst Mike Genovese reaffirmed a Buy rating and price target of $750.
- Needham analyst Ryan Koontz reiterated a Buy rating and price target of $650.
- BNP Paribas analyst Karl Ackerman maintained an Outperform rating and price target of $750.
Check out other analyst stock ratings.
Rosenblatt Securities: Fabrinet revenue grew 45% year-on-year and 8% sequentially to $1.32 billion. It beat expectations by 4%.
According to Genovese, “strength across Telecom/DCI, Auto, and Industrial” drove the upside. Datacom revenues contracted by 1% sequentially due to a decline in sales to Nvidia Corp (NASDAQ:NVDA). Contributions from two new Datacom customers, Amazon.com Inc (NASDAQ:AMZN) and a merchant transceiver vendor, largely offset this.
Another merchant transceiver customer is expected to begin contributing in the current quarter, the analyst stated. The midpoint of management’s revenue guidance for the first quarter of fiscal 2027, at $1.4 billion, represents 43% year-over-year growth, “coming in ~$100 mn or 8% above our prior forecast,” he noted.
Annualizing management’s guidance implies an initial baseline revenue of around $5.6 billion, Genovese said. Completion of Building 10 in early 2027 “significantly expands capacity,” he added. It also raises the company’s revenue potential to around $9.8 billion.
“Assuming underlying demand trends hold, this trajectory gives FN a clear path toward ~$14B in total annual revenue capacity over the next 3–4 years at relatively low incremental CapEx,” the analyst further wrote.
Needham: Fabrinet reported revenue of $1.316 billion and non-GAAP earnings of $4.10 per share. It topped consensus estimates of $1.276 billion and $3.81 per share, respectively.
The Telecom business remained strong, Koontz said. Growth accelerated to 70% year-on-year. However, the decline in Datacom suggests that the Thailand-based company is losing share at Nvidia “likely to Chinese competition,” he added.
Management is “re-segmenting its products yet again, becoming much more opaque which we do not think investors will appreciate,” the analyst wrote. Fabrinet also indicated that a new tax legislation in Thailand that is related to OECD (Organisation for Economic Co-operation and Development) is likely to increase its rates to high-single-digits, with short term volatility, he further stated.
BNP Paribas: Despite Fabrinet delivering a strong beat-and-raise quarter, the stock came under pressure in Monday’s after-hours trading, likely due to investors focusing on declining sales at Nvidia and a slower ramp of HPC (high-performance computing) sales, Ackerman said.
“Fabrinet’s conviction that ’27 growth could accelerate from ’26 is the most important takeaway, we argue, supported by broadening customer and program engagements across data center and comms infrastructure,” the analyst wrote.
Management guided to September quarter revenues and earnings of $1.40 billion and $4.18 per share, topping expectations, he added.
“To us, Fabrinet wouldn’t be aggressively expanding capacity if it didn’t have strong, multi-year demand visibility across its portfolio,” Ackerman further stated.
FN Price Action: Shares of Fabrinet had declined by 20.11% to $478.63 at the time of publication on Tuesday.
