Shares of Thailand-based Fabrinet (FN) gained 6.2% during Monday’s extended trade after the company reported strong financial results for the fiscal fourth quarter ended June 25. Fabrinet offers advanced optical packaging and precision optical, electronic manufacturing and electro-mechanical services.
Adjusted earnings per share (EPS) came in at $1.31, higher than $0.96 per share reported in the fourth quarter of Fiscal Year 2020 and the Street’s estimate of $1.21 per share. Revenue totaled $509.6 million, up from $405.1 million in the previous year, and exceeded analysts’ expectations of $486.88 million.
The CEO of Fabrinet, Seamus Grady, said, “We had a strong finish to a record year with revenue and profitability that exceeded our guidance ranges. Demand trends across our business continue to be healthy, with particular fourth-quarter strength from the telecom market.”
For the first quarter of Fiscal Year 2022, the company expects revenue to be in the range of $510 million to $530 million and adjusted EPS to lie between $1.29 and $1.36. (See Fabrinet stock chart on TipRanks)
Following the announcement of the results, Needham analyst Alex Henderson maintained a Buy rating on the stock with a price target of $125 (39.7% upside potential).
Last month, the analyst said, “Fabrinet is positioned to see strengthening results as the year progresses, we believe, driven by improving demand across the optical market, strong and strengthening demand in Auto driven by new projects, and the continuing ramp of Systems business from Infinera, Cisco and additional systems companies. Component constraints are still holding back near-term results, but we expect these constraints to ease in coming quarters helping growth accelerate. Further, the long-term picture is clear. Customer demand is driving Fabrinet to build more substantially more capacity sooner. This is a major positive to long-term growth visibility.”
Overall, the stock has a Moderate Buy consensus rating based on 1 Buy and 1 Hold. The average Fabrinet price target of $112.50 implies 25.7% upside potential to current levels. The company’s shares have gained 20.2% over the past year.
According to TipRanks’ Smart Score rating system, Fabrinet scores an 8 out of 10, suggesting that the stock is likely to outperform market averages.
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