Fabrinet (NYSE:FN) stock fell 3.93% (As on December 16, 11:45:23 AM UTC-4, Source: Google Finance) after Susquehanna initiated coverage of the company with a Positive rating and $550 price target. Fabrinet has benefited from the inflection of transceivers in data centers and is set to further benefit from multiplying opportunities in optical networking, with an emerging story in high performance computing contract manufacturing for AI servers in addition, the firm tells investors in a research note.
The research firm cited Fabrinet ’s strong position in the optical networking market, particularly noting how the company has “tremendously benefitted from the inflection of transceivers in data centers.” Susquehanna expects Fabrinet to capitalize on expanding opportunities in optical networking, including transceivers, DCI (Data Center Interconnect), and CPO (Co-Packaged Optics) technologies.
The firm also highlighted Fabrinet’s “emerging story in HPC contract manufacturing for AI servers” as an additional growth driver for the company. The $550 price target represents a valuation of approximately 39.5 times Susquehanna’s estimated 2026 EV/NOPAT (Enterprise Value to Net Operating Profit After Tax) for Fabrinet.
In other recent news, Fabrinet reported strong financial results for the first quarter of 2026, with earnings per share reaching $2.92, surpassing analysts’ expectations of $2.75. The company’s revenue also exceeded forecasts, totaling $978 million compared to the anticipated $916.72 million. GAAP net income for the first quarter of fiscal year 2026 was $95.9 million, compared to $77.4 million for the first quarter of fiscal year 2025. These results highlight Fabrinet’s robust growth and financial performance in the recent quarter. Additionally, Fabrinet held its 2025 Annual General Meeting of Shareholders, where Dr. Homa Bahrami and Caroline Dowling were elected as Class I directors for three-year terms. The election saw significant shareholder participation, with approximately 95% of the company’s outstanding ordinary shares represented. Dr. Bahrami received 30,454,485 votes in favor, while Dowling received 33,202,989 votes. These developments reflect important milestones and positive momentum for Fabrinet.
Looking forward, Fabrinet expects second quarter revenue to be in the range of $1.05 billion to $1.10 billion. GAAP net income per diluted share is expected to be in the range of $2.91 to $3.06, based on approximately 36.2 million fully diluted shares outstanding. Non-GAAP net income per diluted share is expected to be in the range of $3.15 to $3.30, based on approximately 36.2 million fully diluted shares outstanding.