Fabrinet (NYSE:FN) Announces Earnings Results

Fabrinet (NYSE:FN) posted its quarterly earnings results on Monday. The technology company reported $4.10 earnings per share for the quarter, beating the consensus estimate of $3.81 by $0.29, FiscalAI reports. Fabrinet had a net margin of 9.94% and a return on equity of 19.83%. The firm had revenue of $1.32 billion during the quarter, compared to the consensus estimate of $1.28 billion. During the same period in the previous year, the firm posted $2.65 earnings per share. The business’s revenue was up 44.6% compared to the same quarter last year. Fabrinet updated its Q1 2027 guidance to 4.100-4.250 EPS.

Here are the key takeaways from Fabrinet’s conference call:

• Record Q4 performance: Revenue rose 45% year over year to $1.316 billion, exceeding guidance, while non-GAAP EPS reached a record $4.10. Full-year revenue increased 36% to $4.6 billion and non-GAAP EPS grew 39% to $14.09.
• Data center demand remained the primary growth engine. Data center revenue increased 68% year over year to $669 million, or 51% of total revenue, driven by DCI, HPC, and transceiver programs; management expects sequential growth in Q1 fiscal 2027.
• Management guided for continued momentum, forecasting Q1 fiscal 2027 revenue of $1.375 billion to $1.425 billion and EPS of $4.10 to $4.25. Executives also cited new program ramps, customer visibility into fiscal 2027 and beyond, and potential opportunities in NPO and optical cross-connect.
• Fabrinet is expanding capacity aggressively to support demand, with Building 10, the Navanakorn site, converted Pinehurst space, and a new Santa Clara campus underway or completed. Management estimates its potential capacity could rise from an approximately $5.3 billion revenue run rate to $12.5 billion–$14 billion over the coming years.
• Expansion is pressuring cash generation, with Q4 free cash flow of negative $37 million and full-year free cash flow of only $4 million as capital expenditures rose. The company also recorded a $57.4 million provision for Thailand’s OECD-related top-up tax, while component shortages remain a constraint even though management said supply risks were incorporated into guidance.

Fabrinet Stock Performance

Shares of FN stock opened at $480.36 on Wednesday. The firm has a market cap of $17.21 billion, a price-to-earnings ratio of 36.81 and a beta of 1.23. Fabrinet has a 52 week low of $272.49 and a 52 week high of $748.89. The firm’s 50-day simple moving average is $524.36 and its two-hundred day simple moving average is $569.25.

Analysts Set New Price Targets

FN has been the subject of a number of research analyst reports. Needham & Company LLC reaffirmed a “buy” rating and issued a $650.00 target price on shares of Fabrinet in a research report on Tuesday. Fox Advisors downgraded shares of Fabrinet from a “strong-buy” rating to an “equal weight” rating in a research report on Tuesday, May 5th. Barclays upped their price objective on shares of Fabrinet from $702.00 to $739.00 and gave the stock an “overweight” rating in a report on Tuesday. Weiss Ratings downgraded shares of Fabrinet from a “buy (b-)” rating to a “hold (c+)” rating in a research report on Wednesday, August 12th. Finally, Wall Street Zen cut shares of Fabrinet from a “buy” rating to a “hold” rating in a research report on Monday, July 20th. Five analysts have rated the stock with a Buy rating and five have given a Hold rating to the company’s stock. According to data from MarketBeat.com, Fabrinet currently has a consensus rating of “Moderate Buy” and an average price target of $649.50.

Insider Buying and Selling at Fabrinet

In other news, Director Homa Bahrami sold 2,500 shares of the firm’s stock in a transaction that occurred on Friday, May 22nd. The shares were sold at an average price of $711.91, for a total transaction of $1,779,775.00. Following the completion of the sale, the director owned 16,233 shares in the company, valued at $11,556,435.03. This trade represents a 13.35% decrease in their position. The sale was disclosed in a document filed with the SEC, which is available at this hyperlink. 0.24% of the stock is owned by corporate insiders.

Hedge Funds Weigh In On Fabrinet

Institutional investors and hedge funds have recently bought and sold shares of the company. Quarry LP raised its stake in shares of Fabrinet by 300.0% in the fourth quarter. Quarry LP now owns 72 shares of the technology company’s stock valued at $33,000 after buying an additional 54 shares during the period. Acumen Wealth Advisors LLC bought a new position in shares of Fabrinet during the 4th quarter worth $37,000. Kemnay Advisory Services Inc. bought a new position in shares of Fabrinet during the 4th quarter worth $42,000. Strive Financial Group LLC purchased a new stake in Fabrinet in the 4th quarter worth about $49,000. Finally, Larson Financial Group LLC increased its holdings in Fabrinet by 25.8% in the 3rd quarter. Larson Financial Group LLC now owns 161 shares of the technology company’s stock worth $59,000 after acquiring an additional 33 shares during the last quarter. 97.38% of the stock is owned by institutional investors.

Key Stories Impacting Fabrinet

Here are the key news stories impacting Fabrinet this week:

• Positive Sentiment: Record results and strong data-center demand: Fourth-quarter revenue rose 45% year over year to $1.316 billion, while non-GAAP EPS reached $4.10, exceeding analyst expectations. Data-center revenue reportedly increased 68%, with data-center interconnect sales surpassing a $1 billion annualized run rate. Fabrinet Q4 Earnings Beat Estimates on Strong Data Center Growth
• Positive Sentiment: Optimistic outlook: Management cited sustained data-center demand, new transceiver ramps and additional production capacity as drivers for fiscal 2027. First-quarter revenue guidance of $1.375 billion to $1.425 billion and non-GAAP EPS guidance of $4.10 to $4.25 were above consensus estimates. FN Q4 Earnings Call Highlights Data Center Growth and Capacity
• Positive Sentiment: Analyst support remains intact: Rosenblatt and Needham reaffirmed Buy ratings with price targets of $750 and $650, respectively, while JPMorgan raised its target to $695 but maintained a Neutral rating. These Analysts Increase Their Forecasts On Fabrinet After Q4 Results
• Neutral Sentiment: AI-sector pressure: Fabrinet’s results contributed to a broader selloff in optical and AI-infrastructure stocks, amid risk aversion, higher bond yields and concerns about potential softness in Nvidia-related datacom demand. Fabrinet Shares Nvidia Datacom Weakness Overshadows Telecom Strength
• Negative Sentiment: Profitability and cash-flow concerns: Investors appeared disappointed by softer first-quarter GAAP EPS guidance and concerns that heavy investment is reducing near-term cash generation. Fiscal 2026 free cash flow fell to roughly $4 million from $207 million, while capital expenditures and inventory increased substantially. Fabrinet Sinks as Investors Focus on Cash Flow, Inventory and Financing
• Negative Sentiment: High expectations reset: Despite record revenue and earnings, Fabrinet’s elevated valuation left the stock vulnerable to profit-taking. A new term loan to support capital spending and a large inventory build added to concerns about working-capital needs and execution risk.

Fabrinet Company Profile

Fabrinet is a global provider of advanced optical packaging and precision optical, electro?mechanical and electronic manufacturing services (CEM). The company specializes in complex manufacturing processes for original equipment manufacturers (OEMs) in communications, data center, industrial, instrumentation and medical markets. Key capabilities include high?precision fiber alignment, micro?assembly, testing and diagnostics, and integration of electro?optic subassemblies.

Incorporated in 2000, Fabrinet operates under a corporate structure headquartered in Singapore with additional regional offices and design centers in the Americas, Europe and Asia.