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Fabrinet (FN) recently issued earnings guidance for the first fiscal quarter ending September 25, 2026, alongside reporting fourth quarter results. This gives investors fresh data points to reassess the stock after recent share price pressure. Fabrinet’s recent earnings beat and fresh revenue guidance have arrived after a sharp pullback, with the share price down 33.85% over 90 days and 3.78% over 30 days. However, the 1 year total shareholder return of 21.87% and 3 year total shareholder return of 169.15% indicate that longer term momentum remains strong even as short term sentiment cools. Spot opportunities that echo Fabrinet’s recent guidance shift by scanning our hand picked 55 AI infrastructure stocks for companies tied to the same data center and optical backbone themes. Bulls point to Fabrinet’s strong recent results and higher guidance, while bears flag the steep share price run up and recent pullback. Which side does the current valuation actually lean toward as you weigh the next move for this stock? The most followed narrative values Fabrinet at $732.44 per share, which sits well above the last close at $432.71. That gap is driving the current debate around the guidance update. Read the complete narrative. Want to see what justifies that higher fair value on Fabrinet? The narrative leans heavily on rapid top line expansion, rising margins, and a richer earnings multiple that assumes the business matures into a much larger and more profitable optical and data center manufacturer. Result: Fair Value of $732.44 (UNDERVALUED) Have a read of the narrative in full and understand what's behind the forecasts. However, Fabrinet’s heavy reliance on a handful of large customers and its rising capital spend for projects like Building 10 could quickly challenge this upbeat narrative if demand softens. Find out about the key risks to this Fabrinet narrative. The analyst narrative points to Fabrinet trading 40.9% below an estimated fair value of $732.44 per share. Our SWS DCF model tells a different story. On that cash flow based view, Fabrinet at $432.71 sits above an intrinsic value of $403.41, which implies the stock screens as overvalued rather than undervalued. Which framework do you find more convincing when real cash flows take center stage? To see how the cash flow assumptions stack up against the more optimistic earnings based narrative, it is worth going through the SWS DCF model step by step. Look into how the SWS DCF model arrives at its fair value. Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Fabrinet for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 46 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity. With mixed signals around Fabrinet’s valuation and outlook, it makes sense to check the underlying data and sentiment for yourself sooner rather than later. To weigh both sides of the story in one place, start with these 3 key rewards and 2 important warning signs. If Fabrinet has sharpened your focus, do not stop here. Use the Simply Wall Street Screener to spot other stocks that could strengthen your portfolio. Target steadier portfolio foundations by checking companies with resilient earnings and conservative leverage using our list of solid balance sheet and fundamentals (50 results). Hunt for potential value opportunities by scanning our 46 high quality undervalued stocks that combine quality fundamentals with appealing price tags. Put dependable income on your radar by reviewing our 12 dividend fortresses that focus on stronger yields and balance sheet support. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include FN. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Image source: The Motley Fool. Monday, Aug. 17, 2026 at 5:00 p.m. ET Chairman and Chief Executive Officer - Seamus Grady Chief Financial Officer - Csaba Sverha Vice President of Investor Relations - Garo Toomajanian Operator: Good afternoon. Welcome to Cybernet Financial Results Conference Call for the Fourth Quarter of Fiscal Year 26. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session and instructions on how to participate will be provided at that time. As a reminder, today's call is being recorded. I would now like to turn the call over to your host, Garo Toomajanian, vice president of investor relations. Garo Toomajanian: Thank you, operator, and good afternoon, everyone. Thank you for joining us on today's conference call to discuss Fabrinet's financial and operating results for the fourth quarter of fiscal year 26. Which ended June 26, 2026. With me on the call today are Seamus Grady, chairman and chief executive officer and Csaba Sverha, Chief Financial Officer. This call is being webcast, and a replay will be available on the Investors section of our website. Located at investor.fabrinet.com. During this call, we will present both GAAP and non GAAP financial measures. Please refer to the Investors section of our website for important information including our earnings press release and investor presentation, which include our GAAP to non-GAAP reconciliation, as well as additional details of our revenue breakdown. In addition, today's discussion will contain forward looking statements about the future financial performance of the company. Forward looking statements are subject to risks and uncertainties that could cause actual results to differ materially from management's current expectations. These statements reflect our opinions only as of the date of this presentation and we undertake no obligation to revise them in light of new information or future events except as required by law. For a description of the risk factors that may affect our results, please refer to our recent SEC filings in particular the section captioned Risk Factors in our Form 10 Q filed on 05/05/2026. We will begin the call with remarks from Seamus and Csaba Sverha, followed by time for questions. I would now like to turn the call over to Fabrinet's Chairman and CEO, Seamus Grady. Seamus? Seamus Grady: Thank you, Garo. Good afternoon, everyone, and thank you for joining our call today. We are delighted to report an outstanding fourth quarter that ended a remarkable year of accelerating year over year revenue growth. And we are enthusiastic that our momentum will extend in the first quarter and through fiscal year 27. Fourth quarter revenue of $1.316 billion increased 45% year over year. And exceeded the top end of our guidance range. This revenue upside flowed through to the bottom line, with non-GAAP EPS of $4.10 which was also above our guidance range. We were pleased to see success from multiple sustainable growth drivers simultaneously supporting our business, as we closed out fiscal 26. And we are excited to anticipate an even stronger fiscal 27. For all of fiscal 26, revenue was an impressive $4.6 billion increasing 36% from fiscal 25. And with strong execution, net income grew even faster than revenue. Producing non GAAP EPS of $14.09 for the year. what is most noticeable to us is that this performance did not come from any 1 product category or customer. But from increasing demand trends across numerous customers in multiple markets. Particularly evident at customers addressing the data center market as well as those serving the communications infrastructure market. Demand from these markets continues to increase. Which makes us optimistic about the long term durability of these trends. Before we get into the details of our results, I would like to highlight a change in the way we will be reporting our revenue breakdown going forward. As complex optical and electronic products become more and more prevalent inside, across, and between data centers, it is evident that hyperscalers and other data center service providers are the ultimate customers of many of the products we manufacture. Including some of those that have been characterized as telecom products in the past. At the same time, communications infrastructure continues to be an important part of our business. Driven by general purpose, longer reach products with broader applications that are not specific to data centers. Therefore, in order for our revenue breakdown to better reflect the end markets we ultimately serve, going forward, we will focus on 3 revenue categories. Number 1, data centers, Number 2, communications infrastructure. And number 3, automotive, industrial, and other revenue. In addition to being better aligned with the markets we ultimately serve, this also simplifies our reporting. We will continue to provide color on trends within all of these categories to extend our transparent revenue reporting practices. And to help investors better understand the underlying drivers of our business. I would now like to talk about capacity. As you know, we have been rapidly increasing our manufacturing footprint in order to stay ahead of rising demand. And we are excited to report a number of milestones. At Building 10 in our Chonburi campus, we remain on track to complete Building 10 by early 27. Which will add a total of 2 million square feet to our footprint. We have already qualified 250 thousand square feet on the 1st Floor of this facility and we expect a similar amount on the 3rd Floor to be qualified this quarter. At our Pinehurst campus, we have completed the conversion of 120 thousand square feet of office space into manufacturing space. We have also completed the acquisition of our new site in Navanacorn earlier in the fourth quarter. And we are happy to report that this building has just been commissioned adding another 200 thousand square feet of space. In addition to these capacity increases in Thailand, we have also been focused on expanding our footprint at Fabrinet West. Our Santa Clara operations are primarily focused on helping customers many of which are in the same neighborhood. Bring new products to market. Since Fabrinet West is an on ramp to Bangkok, success here is measured by how efficiently we transfer production of products to Thailand for higher volume low cost manufacturing at scale. To support increasing demand for these new product introduction and related services, we recently completed the acquisition of a campus at Great America Place in Santa Clara. Less than a mile away from our existing facility on Patrick Henry Drive. This campus consists of 2 office buildings and a large manufacturing space approximately 130 thousand square feet. That will more than double our Silicon Valley footprint and help support our long term growth. Looking back at fiscal 26, it was a remarkable year. With accelerating revenue growth and record profits. More importantly, we have set the stage for another incredible year in fiscal 27. As our strategy plays out. In addition to increasing demand across our existing business, we will see our growth bolstered by recent program wins as we continue to pursue further opportunities across our key markets. In summary, this is an incredible time at Fabrinet, we benefit from our focus on complex high growth markets. And we are proud to be winning more than our fair share of the opportunities. With accelerating year over year revenue growth, we are enthusiastic about the strong demand trends we are seeing and confident in our ability to extend our strong track record into the New Year. Now I would like to turn the call over to Csaba for more details on our fourth quarter results and our outlook for the first quarter of fiscal 27. Csaba? Csaba Sverha: Thank you, Seamus, and good afternoon, everyone. We delivered an excellent fourth quarter with year over year revenue growth accelerating to 45% and continued strong earnings growth. Revenue reached a record $1.316 billion above the high end of our guidance range. We also continue to generate operating leverage, resulting in record non-GAAP EPS of $4.10 which also exceeded our expectations. As Seamus described, we have updated revenue mix reporting to better reflect the end markets we serve and that our customers' products are ultimately deployed. The investor deck posted on our website provides a 12-quarter history under the new reporting structure along with the reconciliation of our Q4 results to the prior categories. This change is purely presentational and has no impact on total revenue in any period. Now turning to the details beginning with data center revenue. This category includes optical and interconnect products deployed within data centers, including data center networking with an expanded view of DCI high performance computing, and other AI infrastructure applications. Data center revenue was $669 million in the fourth quarter, representing growth of 68% from a year ago, and 13% from Q3. This is now our largest category, representing 51% of total revenue. PCI products were the largest contributor to data center growth in the fourth quarter. With an annualized revenue run rate exceeding $1 billion High performance computing, or HPC, also made a contribution to data center and its solid growth in the quarter. Looking ahead, we expect the momentum we saw in the fourth quarter to continue into fiscal 27. Supported further by the new transceiver wins we discussed last quarter. Moving to communications infrastructure. This category includes optical and networking products used in telecommunications and enterprise networks. Excluding products specific to data center applications. Revenue was $413 million an increase of 40% from a year ago and 1% from Q3, representing 31% of total revenue. Growth was broad based across customers and end markets. Including telecom systems, satellite communications, and telecom components. We remain optimistic about the long term growth outlook for this market and expect continued strength in fiscal 27. Turning now to automotive, industrial, and other category. Revenue was $234 million up 8% from a year ago and 9% from Q3. Representing 18% of total revenue. The improving sequential growth was primarily driven by EV charging infrastructure products with a smaller contribution from growth at certain LiDAR customers. Overall, we are extremely excited about the growth trajectory and the broad based trends in demand across the customers and end markets we serve. As I discussed the details of our P&L, all expense and profitability metrics will be presented on a non-GAAP basis unless otherwise noted. Gross margin in the fourth quarter was 12.2%, a 10 basis point improvement from Q3 and a 30 basis point decline from a year ago. We continue to demonstrate strong operating leverage operating expenses representing just 1.3% of revenue. This produced an operating margin of 10.9%, our highest level in 3 years. I will remind you that our growth model does not require significant incremental operating expense. And we therefore expect continued operating leverage as revenue grows. Interest income was $7 million and we saw a foreign exchange revaluation gain of $1 million in Q4. Income tax was CAD 3 million in the quarter. GAAP net income was $139 million or $3.83 per diluted share. Non GAAP net income was $149 million or $4.10 per diluted share. In calculating our Q4 non GAAP earnings, we excluded 2 items that we believe provide useful information to investors in assessing our results and comparability across periods. First, we recorded an approximately $56.7 million noncash gain from remeasuring our investment in Raytec. This was an accounting gain on an existing investment and did not generate cash for the business. We intend to apply the same treatment consistently to the future gains or losses from remeasurement of this investor. Second, we recorded $57.4 million provision related to Thailand's top up tax regime under the OSCE, the Global Minimum Tax Framework. The provision reflects the first year application of the new framework and is based on the rules in effect that our fiscal year end. No cash was paid in fiscal 26 in connection with this. Thailand's regulatory environment for this tax remains in transition as implementing regulations, guidance and related investment support measures continue to evolve. As a result, future tax expense and any related benefits could vary over time, and we intend to apply a consistent approach while the transition continues. For the full fiscal year, revenue was a record $4.6 billion up 36% from fiscal 25. Non GAAP EPS was $14.09, an increase of 39% from a year ago. In 2026, continue to diversify our customer base. With 4 customers representing 10% or more of total revenue. These were Cisco at 20% NVIDIA at 16%, Nokia at 11%, and Amazon at 11% of total revenue. Turning to our balance sheet. We ended the fourth quarter with cash and short term investments of $876 million down $70 million from the end of Q3. Operating cash flow for the quarter was $55 million capital expenditures increased to $92 million with ongoing construction of Building 10 in Chonburi and the purchase of our new campus in Navanakorn for $11 million. Free cash flow was an outflow of $37 million in the quarter. For the full year, operating cash flow was $257 million. Free cash flow was $4 million This reflects our disciplined capital allocation strategy and our continued investment in capacity to support long term growth. We believe reinvesting in the business remains 1 of the most attractive uses of our cash. Supporting continued growth by generating strong ROIC. In the fourth quarter, we did not repurchase a meaningful number of shares. However, our share repurchase program remains active. With approximately $169 million available at the end of the quarter under our current authorization. Turning to our fiscal Q1 27 guidance. As we look to the first quarter, we entered a new fiscal year with strong momentum across the business. In the data center market, we anticipate strong broad based growth across transceivers, DCI, and high performance computing products. We expect growth from both established programs and newer wins. Providing multiple growth engines for the company. In communications infrastructure, we also expect healthy growth supported by continued strong demand across a broad range of systems, components and other programs. We are also optimistic that we will see growth in automotive, industrial, and other. In total, we expect first quarter revenue to be between $1.375 and $1.425 billion representing year over year growth of 43% at the mid midpoint. While our usual first quarter expense seasonality will create a temporary margin headwind, we expect to continue generating operating leverage as revenue grows. As such, we anticipate EPS to be between $4.10 and $4.25. While we only guide 1 quarter at a time we think it is important to convey that we are more confident than ever in our longer term outlook Customers provide us with visibility that goes into fiscal 27 and beyond. While these longer term customer forecasts are not order commitments, they reinforce our confidence in the durability of the very strong demand trends we are seeing. In summary, our outstanding fourth quarter result kept a remarkable year for the company. With revenue increasing 36% and EPS growing 39%. We entered fiscal 27 with strong momentum driven by growing demand across existing programs, meaningful contributions from new program ramps, and additional capacity coming online to support continued growth. Operator, we are now ready to open the call for questions. Operator: Thank you so much. Press star 1 on your telephone and wait for your name to be announced. To remove yourself, press star 1 again. 1 moment for our first question. It comes from Christopher Rolland with Susquehanna. Please proceed. Christopher Rolland: Hi. This is Yasha on for Christopher Rolland. Thank you for taking my question. So I wanted to ask on datacom. It was down slightly sequentially in the quarter. So can you help us understand the dynamics there? How much of that was component supply versus any program transition or demand timing? And as we look into September and how should we think about the shape of Datacom recovery? Do the constraints ease in any way to frame, like, sequential or year over year growth? Csaba Sverha: Hi. This is Csaba. Let me let me take that question first. So we are transitioning to our new revenue categories, as we mentioned in our prepared remarks. So if you were to look at or to reconcile our Q4, our datacom was somewhat flat. Obviously, this is a combination of everything that you have mentioned. When we are looking at this category in our data center business in the future quarter, we do anticipate this to, be up sequentially in our Q1 guidance. So the demand environment remains pretty robust and accelerating. So we are very optimistic about this subcategory that we are now going to report inside our data center revenue category. Christopher Rolland: Thank you. And then my second question is on I think previously you had talked about a $150 million quarterly run rate for September. So is that still the expectation for next quarter or maybe has the timing there kind of shifted? And I think in your prepared remarks, you highlighted new transceiver wins with this customer. So any additional color there? Is this for 800 gig, 1.6T, or any other color on, like, applications? Seamus Grady: This is Seamus. Our HPC business continues to perform I would say, ahead of expectations. We demonstrated good sequential growth in the quarter. As you know, a number of programs with the major hyperscaler continues to ramp We are in the process of ramping the customer's next generation silicon platform and we are installing additional capacities to support both the technology transition as well as additional products and capacity. That we are adding additional products that we will be manufacturing. We remain on track with the customer, and we expect that business to continue to grow You mentioned the let's say, the transceiver business as well with that particular customer. So we are we are excited to be expanding our data center transceiver business with a number of new customers and programs We expect these programs to see we expect these programs to start ramping as soon as this quarter. With the hyperscaler direct program among the first to launch, the 1 you mentioned. We do expect 1 of the merchant programs to begin in the December quarter. And the others to get off the ground in early calendar 2027. This is all pretty consistent with our prior expectations for a meaningful ramp over the course of the fiscal year. Supporting our very strong growth trends. Operator: 1 moment for our next question, please. It comes from George Notter with Wolfe Research. Please proceed. George Notter: Hi, guys. Thanks very much. I wanted to ask about some of capacity additions in the business. Obviously, we are getting ready to wrap up Building 10 in the next few months. I am just curious on your thoughts around Building 11 I think, Seamus, if you go back in time, I think you admitted at 1 point that maybe you started Building 10 a little bit too late. I guess I am just wondering how you think about the triggers now for Building 11 and then longer term capacity additions? Seamus Grady: No. I think we started Building 10, as it turns out, at exactly the right time. Either by excellent planning or good luck or a combination of both. Yeah. We continue to expand our capacity ahead of the demand. And investing in capacity growth is very important use of the cash. And we are really rapidly expanding our manufacturing footprint to support the strong customer growth that we are seeing. And to make sure we have sufficient capacity for the new programs Just to kind of frame it a little bit, we ended fiscal 25. If you take Q4, revenue of $1.32 billion, multiply that by 4, you get about 5.3. So we are we are at a run rate of $5.3 billion, so a little bit ahead of what we had originally thought, you know, was the capacity. So 5.3 billion run rate as we exit Q4 And we have if you like, land capacity and plans in place to bring that capacity up to between 12.5 and 14 billion over the coming years. And let me just explain how we get from 5.3 to potentially 14. Again, we finished FY 2026 at a run rate of 5.3. With the space we converted in Pinehurst recently, that would take us up to about between 5.5 and 5.8. We converted some office space into manufacturing. That takes up to, you know, 5.5 to 5.8 Building 10 will add 3 to $3.5 billion of capacity. So that would take us to between 8.5 and 9.3. I know that is a pretty broad range. But it really does depend on the mix and the and the products that we are making for our customers. So, like I said, Building 10 will add about 3 to 3.5, taking us up to between 8.5 and 9.3. We have already started to produce in some of just started, you know, to produce in some of Building 10. But, you know, the vast bulk of that capacity add is in front of us. The Navanakorn factory that we recently purchased that will start contributing from Q1 onwards and at full capacity that building has capacity for about another 200 to $250 million. Santa Clara, the new campus, again, it is very much mix dependent, but if you just take the kind of the average revenue per square foot and apply it that Santa Clara campus without a about 200 to $250 million of additional capacity. And then we have room to build 2 more factories in Chonburi each of about 1.2 million square feet. With revenue capacity of about $1.8 billion to $2.1 billion. Dollars So if you add up all of that and you take the run rate exiting Q4, and then you add the low and the high of each of those additions, you get between $12.5 billion and $14 billion And we continue to look for more land to expand. So we have been very fortunate. We have been able to keep expanding ahead of the demand and we plan to continue to do that. We are going to be expanding and will continue to expand aggressively. Over the next few years. George Notter: Got it. Super. And then I think last quarter would you discussed this, I think you kind of circulated or centered on a an $11.5 billion revenue run rate. If I have that correct. These numbers are obviously higher. Is it just the difference is a piece of this, I think, is Nava, but are there-- Csaba would be another piece. Are there other components in this also or no? Seamus Grady: Yeah. I think it is it is a combination of we are adding more, you know, more space. More square footage, of course, between Nava and the other the other capacity additions we talked on Santa Clara, of course. But also, you know, our revenue per square foot is increasing. We are actually increasing our revenue per square foot. We are doing we are doing more with less. We find we seem to always find ways to make sure we never we never turn away revenue. We do not we do not disappoint the customer. So we always find ways to get the you know, the product out. So our revenue per square foot has been increasing as well as our square footage has been increasing. So both have been increasing. Thank you. Operator: Thank you, George. Thank you. 1 moment for our next question. It comes from Joseph Lima Cardoso with JPMorgan. Please proceed. Joseph Cardoso: Hey, good afternoon, and thanks for the question. Maybe just 1 on discussion in recent weeks around CTO and MPO. and maybe more specifically about the NPO opportunity. You know, it seems like it is materializing a bit sooner than what maybe the industry or at least maybe investors had been thinking about. And I am just curious, just given the combination of the recent relationship that you have with Raytec, how are you thinking about Fabrinet's ability to address these type of opportunities? I guess, CPO and NPO, but I am just curious if NPO is looking like it is something that maybe is happening earlier for you guys and maybe to a greater magnitude than what was thought of quarter or 2 ago? And then I have a quick follow-up. Seamus Grady: Sure. Thanks, Joe. Yeah. So, you know, NPO technology sits somewhere between pluggables pluggable modules and CPO. As you know, we have built tens of millions of pluggable modules over the years, so we have clearly demonstrated that expertise. We are working on you know, CPO today with a handful of customers, and we are already building devices all albeit not yet at full scale volumes. And you know, since NPO, as you said, NPO combines elements of both, we feel we are very well positioned to be the leader in manufacturing and packaging. And your package optics devices. As NPO scales to 6.4T, 12.8T terabit and beyond, the manufacturing complex complexity and yield becomes increasingly important. It becomes critical. And, you know, for decades, our core strength has been transforming advanced photonics components into reliable high volume systems. So that is really what we do. that is our that is our sweet spot. it is probably too early to talk about let's say, revenues and margins from those opportunities and customers as they depend on program specifics, but rest assured, we are very much involved in all of the technologies you mentioned. And NPO, I think, probably represents a more near term opportunity than CPO from what we have seen with our customers. Our partnership with Raytec, we think, will be very important for us and will really be instrumental in allowing us to unlock the potential of the demand we are seeing Raytec will be adding capacity in Thailand in our campus So we really feel it is important for us to have all of the packaging capabilities that are required to produce these products of the future under our roof. Either in our own production lines or in partnership with Raytec. So we are we are pretty excited about those opportunities, Joe. Joseph Cardoso: No. No. Thank you. Very interesting. And then maybe just as my follow-up, you know, you listed as a 10% customer, which maybe for me was a bit of surprise. I thought maybe Sienna would be on that list. But maybe just speaking to Nokia, how much of this is a function of the Infinera business that you have had as a large customer, at least historical, versus maybe additional business that you have subsequently won as a function of the, you know, the combination of those 2 companies together. Just curious if you are actually seeing the business, you now winning bigger or more opportunities from the combined entity or if it is more just a function of what you would done historically with Infinera in a kind of rising-tide situation? Thanks. Seamus Grady: it is a little bit of both. You know? I mean, I do not wanna go into too much details on any 1 specific customer, but I think I can I can safely say, you know, our first objective, and it is something we do not necessarily control, was to make sure that we do everything possible that when Nokia acquired Infinera that the Infinera business you know, stays robust and sometimes in these situations when the when the big company acquires a smaller company, there can be product rationalizations and things like that? And through no fault of your own, you can end up losing business. That did not happen in this case. You know, the Infinera products, I think, are instrumental, seem to have very strong demand. So the Infinera business has been rising. And then, of course, the Nokia business is going very strong as well, our relationship with Nokia is very good. We historically have done a little bit of business with them, but they were not a big customer for us historically. So really, that reputation that we had and that we continue to have with the Infinera folks has really stood us in good stead, and we feel we are well positioned and starting to, as you say, to make some breakthroughs in winning business with Nokia. So we are we are pretty excited about that relationship. Yeah. There rose to be more than a 10% customer. And we are really just we feel getting started with Nokia, we feel there is a huge amount of potential there to continue to grow that relationship. Got it. Appreciate all the color. Operator: Thank you, Joe. You are welcome. Thank you. Our next question comes from Timothy Long with Barclays. Please proceed. Analyst: Thank you. Yes. 2, if I could. You are to hit some of this again. Seamus, I know you do not wanna talk too much about customers, but, obviously, NVIDIA's a reported 1 with 10% and pretty decline in the year, understanding there is a lot of you know, component issues that have plagued that business. Just curious of, you know, kind of current update on competitive landscape there, particularly as you know, the newer programs that you guys tend to lead are a little bit more mature now. So just curious how I appreciate that business should overall go up a little up next quarter. But curious about the how you view the competitive landscape particularly as, you know, some of the nodes have matured? And then I have a follow-up after that. Seamus Grady: Yeah. I mean, we are we are obviously not gonna get into too much specifics on any 1 customer, but I will say that, you know, we are very pleased with our data center performance in Q4 and we are optimistic that we would see sequential growth in the first quarter, both with long standing customers, like the 1 you mentioned, and newer customers. Contributing to that growth. You know, with respect to any specific parts or components, I do not want to speak on behalf of our customer or our suppliers. In these kind of 3 way relationships, especially for some of these high profile components. But our supply chain team has been doing an excellent job managing these relationships. And, you know, we have continued to get our share of the components we need Demand, yeah, demand for certain components is higher than the available supply and you know, we are working very hard to mitigate that and make sure we get what we need. And as always, we have taken any potential gaps in supply into account in our guidance. And you know, expectations for growth in all in all 3 major revenue categories, including the data center business. Okay. Great. And then, you know, maybe back to the HPC. You mentioned some kind of newer opportunities there as well. I was wondering if you could just you know, give us a little bit more color on types of products, or and any color you can give us or scale of what that could do to the business. It seems like, got off to a pretty good start, and the ramp has been pretty good through 4 quarters. Just curious what, you know, other programs could be added to that to keep that business growing? Yeah. I mean, the products we are we are we are talking about are really follow on products from previous generation products, and we have also won some additional products That relationship is going very well. it is well ahead of our expectations and on track to continue to grow for some time to come. You know, that is HPC is now included in our data center category. We will not be breaking out HPC as a separate category in future, but it is part of our data center category along with you know, the datacom products and also DCI and HPC. Those products are really what drives the data center revenue for us. But back to your question on HPC, know, with AWS, this is going very well. We are very happy with the relationship. We believe the customer is too, and we just continue to focus on doing a great job for them, and that is that is the best way for us to win new business is to do an excellent job with the with the business that we have for that is our focus. Okay. Thank you very much. Operator: Thank you, Timothy. Thank you. Our next question is from Steven Fox with Fox Advisory. Steven Fox: Hi. Thanks, and good afternoon. Hi. I was wondering. I was wondering if you could talk a little bit about the system integration business doing full system with some of the telecom networking OEMs and how that is going. I believe you had talked about 1 major program and maybe there were others in the works, but any update there would be appreciated. And then I have a follow-up. Seamus Grady: Yeah. I mean, we have we have a number of products that we make for our customers where we do the complete network system. The sweet spot for us, Steven, is where we do a lot of the component content maybe first and then work our way up through you know, start off with components, then do the let's say, PCBAs, and then subsystems and subassemblies all the way up to complete network systems. So it is for us and for our customers, it is very important that we have sufficient component content that we are making in order for it to be attractive for the customer and also sticky from our point of view that we are doing a lot for the customer more than just assembling systems. So that is really been our focus. that is how we have had some success with that with a number of our customers. Probably the first foray into that business for us was with the Infinera, now Nokia business, when Infinera acquired Coriant several years ago, We have also brought on significant Cisco complete network system business and we are working on 1 or 2 others. They take time. They take a long time to come to fruition. And we usually start with the components and work our way up from there. So we are working very diligently on that, and you know, we hope to have 1 or 2 to add in the in the coming quarters. Steven Fox: that is helpful. And then just on your comments about us being able to improve revenue, per square foot, it sounds like there is some interesting details. I do not know. Maybe you wanna share or do not. But beyond mix, like, can you give us an idea of how you are sort of getting more out the door than maybe we would have expected 90 days ago? Seamus Grady: Well, I mean, if you look at, you know, the nature of the products and the business that is growing for us, You know, DCI, of course, has been really good for us. And, you know, DCI products are generally physically small in form factor, and revenue dense. So, you know, as we have shipped more as we have been shipping more complex products to our customers, that revenue per square foot metric And that is not to be all and end all. it is a function of better mix but also improved efficiencies and better utilization of space. So there is a number of factors that go into it. Not any 1 factor, but in broad sense, it is a combination of more, you know, more complex products and, therefore, more revenue dense products. And also better space utilization and efficiency improvements for pretty relentless about finding savings and finding you know, better ways to utilize space and save on space because space is at a premium. So it is a it is a combination of both. So Great. that is very helpful. Thank you. Operator: Thank you. Our next question comes from the line of Ryan Kuntz with Needham and Company. Please proceed. Ryan Koontz: Great. Thanks. I wanted to ask about the telecom and DCI business, which continues to put up really, really strong numbers. Do you think you are seeing yet impact from scale-across projects, number 1? And number 2, when do you think you will see some impact from the new multi rail amplifier densification? Is that a new market opportunity for you? Thanks. Seamus Grady: Thanks, Ryan. Yeah. We believe we are seeing both scale out and scale across in our business. Again, bear in mind, our customers do not necessarily share with us their plans for where all of the products we make for them are going to end up. But we believe, yes, we are we are participating in both you know, scale up, scale out, and scale across, but specific to DCI, scale out and scale across. For the you asked about the multi rail product. You know, multi-rail architectures that they package and manage fiber pairs as a as a highly integrated optical system creating really more photonics integration and manufacturing complexity Per deployment. So they are they are quite complex and difficult. These platforms are they are highly manufacturing intensive. there is a lot of value add and complexity that goes into producing these products. You have dense fiber routing and management, high volume fusion splice and connectorization, and a whole array of precision optical manufacturing technologies and assembly processes that we are really very good at. We are actively engaged with customers on programs that leverage our strengths in these areas. Especially in photonics integration and packaging. And, you know, we see multi rail programs as a really good fit for us. They are right in our sweet spot. They are complex. They are difficult to make. They require many process steps, which are which these process steps are really our secret sauce, if you like. So we are we are we are heavily engaged on a number of multi rail programs with our customers. Again, not really our place to announce them, but rest assured, we are heavily engaged with a number of customers on these programs. And we are we are very excited about them. Thanks, Seamus. Ryan Koontz: And then maybe just a question on your recasting of the segment here. You say telecom is kinda gonna stay in communication infrastructure, that is everything it is really rack based. Should we think of it that way? So it is line systems and rack based transponders. As opposed to, you know, DCI, which I assume is all pluggable stuff that the split that we are gonna see here? Csaba Sverha: Yeah. Hi, Ryan. This is Csaba. So let me clarify what is going into the communication infrastructure. So I think the best way to think about it is where our products or our customers' products are being deployed So that is the number 1 distinction. Whenever we see a product that goes and end up in a data center or a hyperscale infrastructure, we would categorize them under data center. And then the rest of the business that traditionally has been telecom, most of them would be, network systems, but also some of them, the common longer term, long reach products will be also falling into this category. So it is not a 1-fit-all but the number 1 thumb rule is that wherever the product's getting deployed if it is a data center or hyperscale, then it goes in the data center. Everything else goes into the communication infrastructure that is supporting that. Understood. Thanks, Adam. Operator: You are welcome. Thanks, Ryan. Our next question comes from Karl Ackerman with BNP Paribas. Thank you. Karl Ackerman: Hi, Seamus. On Datacom, have you seen have you seen higher interest from hyperscale customers seeking to diversify away from Chinese transceiver suppliers? And as you address that question, do you have the laser supply commitments needed to support the upcoming 1.6T server transceiver ramp in the next few months? And I have a follow-up, please. Seamus Grady: Yeah. I mean, the component supply, as I said in the earlier comments, it is it is factored into our guidance. We are not going to go into specifics beyond that. You know, the proposed ban on new transceivers from China, I guess, it is not yet a done deal. It remains to be seen what will happen. We do not manufacture for any Chinese providers and are we are, of course, more focused on Western providers. So, you know, in theory, that could be a positive as long as materials and components are available. It could be a positive should be a positive for us, but I think it is early days. Like I said, it is not a done deal, and so it is a lot. there is a lot to be unpacked before that actually comes to fruition. You know? A lot of the transceivers that go into these data centers are coming from China. So if you just put a you know, a block on a ban on transceivers coming from China, the whole goes to a halt. He decides whether it is good or bad for Fabrinet. So I think it is by no means a done deal, and we will see we will see what happens. Yep. Well, thank you for that. Karl Ackerman: Within comms infrastructure, how are you thinking about the opportunity to address LEO satellites today? Could you discuss your visibility there visibility there relative to your, earlier view this year? Thank you. Seamus Grady: Yeah. We include that in our in our telecom infrastructure category. Have a number of customers we are engaged with there. Know, primarily the 2, I would say, major players in that space, and there is 1 or 2 others who are looking to get into that space that we also do business with. But, you know, for us, it is a it is a really good fit. Because the technology is right in our sweet spot. We have the customers today, so if that business ramps we feel we are very well positioned to work. You know, we are making these products. We have been making them for a number of years. For 1 customer in particular. Particular and now a couple of other customers. So and they are, again, they are right in our sweet spot. They are very straightforward, if you like, for us to make these products. They really fit well with our capabilities. So know, we feel good about our position there. We have the 2 big players and as I say, there is 1 or 2 smaller ones who were we are also working with. We think it is a lot of potential for us. Thank you. Operator: Thank you, Karl. Thank you. Our next question comes from the line of Mike Genovese with Rosenblatt Securities. Mike Genovese: Hi. This is Amol stepping in for Mike. I was wondering if you can touch on the progress and mainly the timing for 1.16 driving revenue from your largest datacom customer. Seamus Grady: Yeah. that is not something we are going to update the markets on this call. This is a this is a Fabrinet call. You have to talk to NVIDIA about the NVIDIA product launches. that is not something we would be disclosing to that level of detail. Mike Genovese: Got it. Got it. Understood. And then just a Just with the inventory jump, I am assuming it is relative to supply constraints in the upcoming ramp. Is there anything else there? Csaba Sverha: it is mainly regarding the Well, I think the inventory jump has to do, obviously, with the revenue growth. So if you look at from other perspective, we are position positioning material, continue to support our customers. The material constraints are something that we have been used to in the past several years, so those would not be a meaningful increase in our inventory. So the inventory increase has to do with our growth and then the positioning for future ramps. With the customers. Got it. Thank you. Operator: You are welcome. Thank you. 1 moment for our last question. It comes from the line of Timothy Savageaux with Northland Capital Markets. Timothy Savageaux: Hey. Good afternoon. And congrats on the results. And also congrats on growing mid-30s, with NVIDIA down 20%-plus for the year. I think that is rest of the business up nearly 60% on that basis. So, that is quite impressive. Just to cut just a couple of quick questions. First, on as you look for Q1 27 guidance, I imagine data centers the primary driver, but within the 3 drivers that you mentioned, DCI, transceivers, high performance compute, and noting that you had a really huge quarter with Cisco and DCI, and that was evident in their results. Can you kind of give us a sense of among those categories, I imagine it is transceivers that is going to drive the majority of the growth, but I would love to get your any color on that. Seamus Grady: Well, really, first of all, thanks, Timothy. I think you hit the nail on the head. You know, we finished if you like, a 10 year spell from up to 2024, 17% compound annual growth, and then we had 19% compound annual growth in FY 2025 and then 36% in FY 2026 with 45% year on year growth in Q4. So we are we are pretty happy with the with the growth trajectory that we are on. Also, you know, if you look at our performance over the last while, we have had 12 consecutive quarters of record revenues. And, 6 consecutive quarters of accelerating year over year growth. So it is been a we have been on a very nice trajectory for the last while. Within the data center business, and, you know, we think it makes sense to categorize these particular products into data center because you know, DCI the transceivers, of course, are inside the data centers. And then high performance compute is also essentially a data center product and DCI. Are between the data centers. You know, the growth in all 3, we think, is robust. HPC continues to grow. We will not be breaking them out individually going forward. But, you know, HPC continues to be very strong for us. We are we are doing very well. And we have a number of other customers that we are focused on that are not in the revenue yet, but we are we are working on The transceiver business, a combination of our main customer, but also success we are getting with hyperscale direct and also merchant business. That is just beginning to get going as well. And we feel very good about that. And, of course, DCI, you know, DCI has been a real success story for us. I think, Csaba, did we say in our prepared remarks run rate on DCI is about a billion dollars? Csaba Sverha: Thank you, Seamus. Yeah. So, actually, our DCI business reached the close to $1 billion run rate. And if you look at our Q4 numbers, our DCI business was equivalent to our historical datacom business. So that is that is a meaningful growth and continues to grow. Seamus Grady: And if you look at each of those categories, I suppose, especially, you know, DCI and the transceiver, demand is just insatiable. it is extremely robust. And the demand is coming to us and coming at us from several directions. You know? Our DCI, of course, we have we have really all the main players in DCI. Transceiver business, you know, historically, we have had our main customer, but now we have these other growth factors to layer on top of that, both merchant and hyperscale direct. And then high performance compute just continues to go from strength to strength, so you know, we feel very good, Timothy, about our overall position in the data center business. And what is interesting is the customers are giving us visibility well out into know, the end of 2027 and beyond. That does not mean they are giving us firm orders, but they are giving us visibility. And there looks to be, you know, no end in sight to the demand from the customers. We feel we feel very good about that. Timothy Savageaux: Well, that is a perfect segue to my next question, which is you have mentioned accelerating growth several times, including in response to that quick question. Although I would note at the middle of the range, that might break your streak, but I imagine you are not heading for the middle of the range. Still in the high 4 or still in the forties, in terms of year over year growth. But given that lengthy list, of demand drivers and the capacity additions, is it within the bounds of reasonableness to, to think about annual growth in fiscal 27 accelerating from what you saw in 2026, especially maybe given the lack of that headwind from your largest customer? Seamus Grady: Yeah. I think, that is a that is a good point and a good question. I think, of course, you know, the standard answer, Timothy, we guide 1 quarter at a time. However, based on the picture we have right now, it is not beyond the bounds of possibility. And that is that is, you know, that is not something we would ever say. I suppose we always we guide 1 quarter of time, that is what we are going to continue to do, but based on the demand we are seeing, certainly, the demand is there you know, that we could see another year of accelerating growth. it is just a it is just a staggering demand picture we are seeing from our customers, and the thing that is particularly satisfying for us is the trust that the customers are placed And obviously, the revenue is great. Do not get me wrong. but it is really the trust the customers are placing us there. You know, they are trusting us with their most important products, their leading edge products, and we are, you know, we are we are on a ramp with several of these customers. That is just amazing. So yeah, I think it is not beyond the bounds of possibility, Timothy, to answer to answer your question. Timothy Savageaux: Great. And let me close by adding maybe 1 other growth driver that I do not know that is been discussed, and that is optical cross-connects, OCS. And, you know, we heard last week, you know, big ramp there from the industry leader, but also, you know, I think plans to move from strictly internal to working with contract manufacturers I wonder if you might be able to give us an update on you know, what you think the timing might be there for you or the opportunity And does that lie in fiscal 27 as well? Seamus Grady: Yeah. I mean, you know, obviously, OCS remains a great opportunity for us. it is right in our wheelhouse. it is you know, the manufacturing technology is very similar products that we are already making for our customers. So we already feel like we have a bit of a head start. So no real change in our optimism on OCS you know, to but they there are incremental opportunities for us and that, you know, for us, OCS is quite small today. We are shipping some product, but it is quite small. So I think the big ramp that maybe has been in has been talked about, we are pretty confident we will participate in that. So we feel very good about OCS, and I think it could be a bigger, much bigger and more meaningful category for us in the future. The specifics of our customers' ramp, we leave that to them to talk about. But I think we are well positioned. Got it. Thanks. Operator: Thank you. And this will conclude our Q and A session for today. I will pass it back to Seamus Grady for closing. Seamus Grady: Thank you. Thank you for joining our call today, and we delivered an outstanding performance in Q4 with continued top line acceleration that ended a tremendous year for the company. We are entering fiscal 27 better positioned than at any other point in our history. To continue delivering strong growth in response to the increase in demand that we are experiencing across our business. With our deep domain expertise and increasing capacity, we expect to extend our manufacturing leadership as a trusted partner for our customers' most complex products. We look forward to sharing more excellent results with you in the future and to seeing those of you who will be attending the Rosenblatt conference tomorrow and the Wolf conference in September. Thanks again. Goodbye. Operator: And thank you all for participating, and you may now disconnect. Before you buy stock in Fabrinet, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Fabrinet wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $429,223!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,317,883!* That performance is why people listen. With a track record of beating the S&P 500 by nearly 5x, Stock Advisor offers a distinct advantage. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built for the long haul. See the 10 stocks » *Stock Advisor returns as of August 24, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Fabrinet (FN) Q4 2026 Earnings Call Transcript was originally published by The Motley Fool

Shares of chip and optical packaging giant Fabrinet (NYSE: FN) sank 23.4% this week, according to data from S&P Global Market Intelligence. Fabrinet released its fiscal fourth quarter earnings report on Monday. While the numbers handily beat Wall Street analyst estimates and management guided ahead of consensus, the results apparently weren't enough for investors looking for an even bigger beat. Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue » Like many AI-related stocks, Fabrinet has already posted strong gains over the past year and trades at an expensive-looking valuation. Furthermore, other macroeconomic factors appeared to weigh on AI-related semiconductor stocks this week. In its fiscal fourth quarter, Fabrinet's revenue surged 45% to $1.32 billion, while adjusted (non-GAAP) earnings per share rallied 54.7% to $4.10. Both figures beat analyst expectations. Management also guided revenue for the current quarter to $1.38 billion to $1.43 billion, with adjusted EPS between $4.10 and $4.25, both of which beat analyst consensus estimates. Still, that wasn't enough for buy-side investors who were apparently looking for more after the stock had surged this year. Even after this week's drop, Fabrinet is up 57% over the past year, and its stock trades at 33.5 times earnings. That's actually not wildly expensive for a stock growing this fast, but investors may be skeptical regarding the sustainability of growth. Furthermore, Fabrinet doesn't design semiconductors, nor is it a chip fabrication company. Rather, it packages chips into complex systems and makes them all work together. That's a valuable service, and Fabrinet is clearly executing very well; however, the company operates on relatively low gross margins. Furthermore, Fabrinet's gross margins actually declined year-over-year, from 12.5% a year ago to 12.2% last quarter. That said, adjusted operating margins expanded from 10.7% to 10.9% as gross profit growth outpaced operating expense growth. In addition, other factors appeared to weigh on AI-related semiconductors this week. This included rising long-term interest rates, investor concerns about the War in Iran, and a growing backlash against data center construction in the U.S. While there are some valid investor concerns, this investor would lean more toward viewing Fabrinet's pullback as an opportunity to buy the dip. While the company operates on a low margin, the business is fairly capital-light, and it earned a very high return on invested capital of over 38% in each of the past two years. While investors probably shouldn't expect 45% growth every year, Fabrinet should continue to benefit from its expertise in co-packaged optics, as AI data centers transition from copper interconnects to optical interconnects in the years ahead. Before you buy stock in Fabrinet, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Fabrinet wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $432,189!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,330,956!* Now, it’s worth noting Stock Advisor’s total average return is 967% — a market-crushing outperformance compared to 212% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of August 21, 2026. Billy Duberstein and/or his clients have no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Why Fabrinet Shed Nearly A Quarter of Its Value This Week was originally published by The Motley Fool

Fabrinet (NYSE:FN) delivered record fiscal fourth-quarter revenue of $1.316 billion, up 45% from a year earlier, and non-GAAP EPS of $4.10. Both topped consensus estimates of approximately $1.27 billion and $3.81, respectively. Fabrinet (NYSE:FN) then guided fiscal first-quarter revenue to $1.375 billion to $1.425 billion and non-GAAP EPS to $4.10 to $4.25, also above consensus. Yet shares reversed a 5% regular-session gain and fell 6.9% after hours to $557.14. This was not an earnings miss. The results marked another record quarter, while guidance was comfortably above consensus. The selloff suggests the market’s hurdle had moved well beyond published estimates after an AI-driven rally. At the $598.58 regular-session close, the stock traded at approximately 46 times newly reported fiscal 2026 GAAP EPS, falling to roughly 43 times at the after-hours price. Management said growth at Fabrinet (NYSE:FN) did not come from any one product category or customer. Data-center revenue increased 68% to $669 million and became its largest category at 51% of sales. Communications-infrastructure revenue rose 40% to $413 million, while automotive, industrial and other revenue increased 8% to $234 million. A technical stock market chart. Photo by Energepic from Pexels Fabrinet (NYSE:FN) remains one of the clearest manufacturing beneficiaries of AI data-center spending. Data-center interconnect products exited the quarter at an annualized revenue run rate above $1 billion, while management expects new transceiver programs to begin ramping during fiscal 2027. The breadth across transceivers, interconnect products, and high-performance computing reduces dependence on one AI product cycle. Fabrinet (NYSE:FN) is also producing operating leverage despite the softer gross margin. Non-GAAP operating margin reached 10.9%, its highest level in three years, because operating expenses represented only 1.3% of revenue. At the midpoint, first-quarter guidance implies approximately 43% revenue growth, hardly evidence that demand is fading. Fabrinet (NYSE:FN) reported a 12.2% non-GAAP gross margin, down 30 basis points from a year earlier, and warned that normal first-quarter expense seasonality would create a temporary margin headwind. The pressure is modest, but it matters when investors are paying roughly 43 to 46 times fiscal 2026 GAAP earnings for a contract manufacturer with thin gross margins. The spending needed to support growth adds another test. Fabrinet (NYSE:FN) reported negative $36.9 million of company-defined non-GAAP free cash flow, calculated as operating cash flow less purchases of property, plant and equipment, as quarterly capital expenditures reached $92 million. Those investments could unlock substantial future capacity, but investors now need evidence that higher revenue will translate into durable cash generation. The filings available so far reflect positions held before Fabrinet (NYSE:FN) released its fourth-quarter results and fiscal 2027 outlook. Insider Monkey’s first-quarter database showed 56 hedge funds holding Fabrinet (NYSE:FN) at the end of March 2026, up from 42 funds three months earlier. The 7% after-hours decline in Fabrinet (NYSE:FN) looks more like an expectations reset than evidence of an emerging demand problem. The quarter supported the AI growth story, while the operating-margin record weakens the argument that profitability is already unraveling. Still, revenue growth alone may no longer expand the valuation. Investors now want gross-margin stability, stronger free cash flow, and proof that exceptional growth can persist as the revenue base gets larger. While we acknowledge the potential of FN as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: ConocoPhillips (COP): Wall Street Sees More Upside Despite Leadership Shakeup and Here is Why Chevron (CVX) is a Favorite Among Hedge Funds Disclosure: None. This article is originally published at Insider Monkey.

Fabrinet recently reported record fiscal fourth-quarter 2026 results, with revenue rising to US$1.32 billion and GAAP diluted EPS reaching US$3.83, and issued first-quarter 2027 guidance calling for US$1.38 billion–US$1.43 billion in revenue and US$3.39–US$3.54 in GAAP EPS. Management’s emphasis on surging data center interconnect demand, capacity expansion toward long-term multibillion-dollar revenue potential, and the free-cash-flow impact of heavy capital spending gives fresh context to both its growth ambitions and execution risks. We’ll now examine how Fabrinet’s record data center-driven quarter and capacity expansion plans may reshape the company’s existing investment narrative. Invest in the nuclear renaissance through our list of 93 elite nuclear energy infrastructure plays powering the global AI revolution. To own Fabrinet, you need to believe that demand for high speed optical manufacturing, especially for AI driven data centers, will stay strong enough to support its large capacity build out and justify recent heavy capital spending. The recent record quarter and Q1 fiscal 2027 guidance reinforce that data center demand remains the key near term catalyst, while margin pressure and negative free cash flow from accelerated expansion look like the most immediate risk rather than a thesis changing event. In that context, Fabrinet’s August 17, 2026 earnings release is especially important, because it ties the surge in data center interconnect revenue to a much larger long term capacity ambition of US$12.5 billion to US$14.0 billion. That same update also highlighted weaker margins and cash outflows linked to new facilities, directly connecting today’s standout growth driver with the same capital intensity that could weigh on returns if demand or customer orders were to slow. Yet behind the record quarter, investors should still recognize how rising capital intensity and margin pressure could eventually affect free cash flow and returns... Read the full narrative on Fabrinet (it's free!) Fabrinet's narrative projects $8.0 billion revenue and $845.5 million earnings by 2029. This requires 23.8% yearly revenue growth and an earnings increase of about $424.5 million from $421.0 million today. Uncover how Fabrinet's forecasts yield a $732.44 fair value, a 52% upside to its current price. Before this quarter, the most optimistic analysts were already modeling Fabrinet’s revenue climbing toward about US$8.6 billion and earnings near US$910 million, yet the latest results and guidance could either reinforce that upbeat view or highlight how sharply it contrasts with concerns around long term capacity risk and customer dependence, so it is worth comparing these very different narratives yourself. Explore 8 other fair value estimates on Fabrinet - why the stock might be worth as much as 76% more than the current price! Don't just follow the ticker - dig into the data and build a conviction that's truly your own. A great starting point for your Fabrinet research is our analysis highlighting 3 key rewards and 3 important warning signs that could impact your investment decision. Our free Fabrinet research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Fabrinet's overall financial health at a glance. Early movers are already taking notice. See the stocks they're targeting before they've flown the coop: Find 50 companies with promising cash flow potential yet trading below their fair value. The best AI stocks today may lie beyond giants like Nvidia and Microsoft. Find the next big opportunity with these 17 smaller AI-focused companies with strong growth potential through early-stage innovation in machine learning, automation, and data intelligence that could fund your retirement. We've uncovered the 11 dividend fortresses yielding 5%+ that don't just survive market storms, but thrive in them. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include FN. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Fabrinet FN used its fiscal fourth-quarter earnings call to emphasize that data center demand, new transceiver programs and capacity expansion are setting up another strong growth year. CEO and chairman Seamus Grady said customer visibility extends through fiscal 2027 and beyond, though forecasts are not firm orders. The company reported quarterly earnings of $4.1 per share, which beat the Zacks Consensus Estimate of $3.85. Revenues came in at $1.32 billion, topping the $1.28 billion estimate. The call focused more on sustaining momentum as new programs and manufacturing space come online. Fabrinet price-consensus-eps-surprise-chart | Fabrinet Quote Executive vice president and CFO Csaba Sverha said data center revenues reached $669 million, up 68% year over year and 13% sequentially. The category represented 51% of total revenues. Sverha said DCI was the biggest contributor, with its annualized revenue run rate exceeding $1 billion. High-performance computing also posted solid sequential growth. CEO Grady emphasized that growth was not tied to one customer or product. He cited rising demand across data center and communications infrastructure customers. Grady said Building 10 in Chonburi remains on track for completion in early 2027 and will add 2 million square feet. A Wolfe Research analyst asked about longer-term capacity. Grady said Fabrinet exited fiscal 2026 at about a $5.3 billion annualized revenue run rate and has plans and land capacity to support $12.5 billion to $14 billion over coming years. Grady said Building 10 alone should add $3 billion to $3.5 billion of revenue capacity. He also said DCI product mix, space utilization and efficiency are raising revenue per square foot. A Susquehanna analyst asked about HPC and new transceiver wins. Grady said HPC was running ahead of expectations as a major hyperscaler ramps its next-generation silicon platform. Grady said a hyperscaler-direct transceiver program should start ramping up in the first quarter of fiscal 2027. One merchant program is expected in the December quarter, with others beginning in early calendar 2027. Sverha guided fiscal first-quarter revenues to $1.375 billion to $1.425 billion, or 43% year-over-year growth at the midpoint. Non-GAAP earnings are expected at $4.10 to $4.25 per share, with growth anticipated across all three revenue categories. A JPMorgan analyst pressed management on near-package optics, or NPO, and co-packaged optics. Grady said NPO is a more near-term opportunity than CPO based on customer activity, while Fabrinet is already building CPO devices at subscale volumes. Grady said the Raytek partnership should add packaging capability in Thailand. He said it is too early to frame revenue or margin contributions. A Needham analyst asked about multi-rail architectures. Grady said Fabrinet is heavily engaged with multiple customers on programs requiring dense fiber routing, fusion splicing, connectorization and other precision optical processes. A Barclays analyst asked about supply constraints. Grady said demand for certain components exceeds available supply, but Fabrinet has secured its share and incorporated potential gaps into guidance. A BNP Paribas analyst asked about a proposed restriction on Chinese transceivers. Grady said the proposal is not final and, while it could benefit Fabrinet's Western-focused customer base, an abrupt restriction could disrupt industry supply. A Rosenblatt analyst asked about higher inventory. Sverha said the increase reflects revenue growth and material positioning for future customer ramp-up, not a meaningful increase from supply constraints. A Northland Capital Markets analyst asked whether fiscal 2027 growth could accelerate from fiscal 2026. Grady said that outcome is within the range of possibilities based on current demand while reiterating one-quarter-at-a-time guidance. Grady centered Fabrinet's outlook on customer demand, new program ramp-up and capacity investment. He also stressed that forecasts extending into 2027 and beyond provide visibility rather than firm orders. FN carries a Zacks Rank #4 (Sell). Its Value, Growth and VGM Scores are D, while its Momentum Score is B. Under the Zacks framework, the Rank is the primary signal, so a weaker Rank outweighs a favorable individual Style Score. The Momentum Score of B is the strongest part of FN's style profile, while the D grades are weaker under the A-to-F hierarchy. The Zacks Rank can change as earnings estimates are revised after the just-reported results, so the current rating is not fixed. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Fabrinet (FN) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Fabrinet crashed 20% on decelerating Q1 guidance after running up 25% pre-earnings, dragging Marvell down 8% and Amphenol 7%. Coherent fell 12% and Lumentum dropped 10% despite posting datacenter revenue growth of 59% and 109% last quarter. Anthropic's $65 billion ARR missing $80 billion expectations and the 30-year Treasury hitting a 19-year high amplified selling across AI hardware. Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and Marvell Technology didn't make the cut. Grab the names FREE today. Shares of Fabrinet (NYSE:FN) are down roughly 20% at midday Tuesday, trading near $476 after the optical manufacturer posted a fiscal Q4 beat but disappointed a market already primed to sell AI infrastructure names. The move is dragging the whole optical and connectivity complex lower. Marvell Technology (NASDAQ:MRVL) is off nearly 8%, Amphenol (NYSE:APH) is down about 7%, Coherent (NYSE:COHR) is off about 12%, Lumentum (NASDAQ:LITE) has dropped roughly 10%, and Corning is down nearly 8%. After Monday's close, Fabrinet reported record Q4 revenue of $1.316 billion, up 45% year over year and above guidance. Non-GAAP EPS came in at $4.10 versus $2.65, an all-time high. Full-year revenue reached $4.64 billion, up 36%. CEO Seamus Grady called the quarter "exceptional, capping off a remarkable year of accelerating growth and strong momentum." View the 8-K filing here. The problem is positioning. FN ran up roughly 14% in the week and 25% in the month heading into the earnings report, and Q1 guidance of $1.375 billion to $1.425 billion implies a far more modest sequential step-up than the 45% YoY quarter just delivered. Add a disclosed $56.7 million loss on non-marketable equity securities and heavy capex that pushed Q4 free cash flow to negative $36.9 million, and a beat-and-raise turned into a "good but decelerating" setup. This is Fabrinet's largest earnings-day drop in the last six quarters, roughly 2.2x the typical post-earnings selloff. Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and Marvell Technology didn't make the cut. Grab the names FREE today. Fabrinet lit the fuse. Macro caught it. Over the weekend, Anthropic told investors ARR hit $65 billion at the end of July, huge growth but below the $80 billion-plus figures Gavin Baker had cited on The All In Podcast. Reuters then reported Anthropic's own 2028 revenue estimate of $190 billion to $200 billion, again below what some investors were modeling. The Wall Street Journal capped it, reporting that nine top tech companies carry roughly $3 trillion of off-balance-sheet commitments mostly related to AI, growing faster than traditional capex. The 30-Year Treasury hit a 19-year high today, and with the 10-year yield at 4.7%, near a 12-month high, long-duration AI hardware names are the natural fade. The Marvell and Amphenol declines reflect more than one contract manufacturer's guidance. Marvell just guided Q2 to $2.7 billion, implying 35% YoY growth, with CEO Matt Murphy citing "exceptional AI-related bookings." Coherent's fiscal Q4 datacenter revenue was up 59% YoY. Lumentum's Q4 revenue grew 109%. This is a positioning and sentiment reset landing on a red-hot cohort of optics, connectivity, and infrastructure suppliers behind the AI buildout (we profiled seven of these picks-and-shovels names, from power to cooling to networking, in a free report here: 7 Stocks Powering the AI Boom). Lumentum is still up roughly 736% over the past year, and Coherent 276%. Elevated expectations were the fuel; today they are the risk. Watch whether analyst targets Fabrinet, currently at a consensus $732, get trimmed into the close. NVIDIA reports next week, and its data center commentary will decide whether today is a shakeout or the start of something larger. Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and Marvell Technology didn't make the cut. Grab the names FREE today. Contact [email protected] for any questions or corrections.

Fabrinet FN reported fourth-quarter fiscal 2026 non-GAAP earnings of $4.10 per share, which rose 54.7% year over year and beat the Zacks Consensus Estimate by 6.49%. Revenues rose 44.6% to $1.316 billion and beat the consensus mark by 2.64%. Growth was broad-based across data center and communications infrastructure demand. Data center revenues became the largest category at 51% of sales, while data center interconnect (DCI) exited the quarter at an annualized revenue run rate above $1 billion. Data center revenues totaled $669 million, climbing 68% year over year and 13% sequentially. DCI was the largest contributor to the category's growth, while high-performance computing (HPC) also made a substantial contribution.Management expects the momentum to continue into fiscal 2027. A hyperscaler-direct transceiver program is expected to begin ramping in the first quarter, one merchant program is expected to start in the December quarter, and other programs are expected to begin in early calendar 2027. Fabrinet is ramping a major customer's next-generation silicon platform and adding capacity for additional HPC products. Fabrinet price-consensus-eps-surprise-chart | Fabrinet Quote Communications infrastructure revenues were $413 million, up 40% year over year and 1% sequentially, and represented 31% of quarterly revenues. Growth was broad-based across telecom systems, satellite communications and telecom components.Automotive, industrial and other revenues reached $234 million, increasing 8% year over year and 9% from the prior quarter. The category accounted for 18% of revenues. Management said the sequential improvement was driven mainly by EV charging infrastructure products, with a smaller contribution from certain LiDAR customers. Non-GAAP gross profit totaled $160.8 million, up from $113.9 million in the prior-year quarter. Non-GAAP gross margin was 12.2%, down 30 basis points year over year but up 10 basis points sequentially. Operating expenses were 1.3% of revenues. Selling, general and administrative expenses as a percentage of revenues declined 60 basis points year over year to 1.8% in the reported quarter. Non-GAAP operating margin reached 10.9%, up 20 basis points year over year and the highest level in three years. As of June 26, 2026, cash and cash equivalents were $346.71 million compared with $306.43 million as of June 27, 2025. Short-term investments were $528.34 million compared with $627.82 million.Net cash provided by operating activities was $256.73 million in fiscal 2026 compared with $328.37 million in fiscal 2025. Free cash flow decreased 98.0% year over year to $4.22 million from $207.29 million. Building 10 at the Chonburi campus remains on track for completion by early 2027 and will add 2 million square feet. Fabrinet has already qualified 250,000 square feet on the first floor, while its recently commissioned Nava Nakorn site adds another 200,000 square feet. The new Santa Clara campus provides roughly 130,000 square feet and more than doubles the company's Silicon Valley footprint.Management estimates that Building 10 can add $3-$3.5 billion of revenue capacity, taking capacity to roughly $8.5-$9.3 billion depending on product mix. Including additional planned factories in Chonburi and other capacity additions, Fabrinet sees a path to $12.5-$14 billion of annual revenue capacity over the coming years. For the first quarter of fiscal 2027, Fabrinet expects revenues of $1.375-$1.425 billion. The midpoint implies 43% year-over-year growth. Non-GAAP earnings are projected in the range of $4.10-$4.25 per share.Management expects broad-based growth across transceivers, DCI and HPC in data centers, alongside healthy communications infrastructure growth and improvement in automotive, industrial and other revenues. Usual first-quarter expense seasonality is expected to create a temporary margin headwind. Customer forecasts provide visibility into fiscal 2027 and beyond, although those forecasts are not firm order commitments. Currently, Fabrinet carries a Zacks Rank #4 (Sell). NVIDIA NVDA, KLA KLAC and Synopsys SNPS are stocks worth considering in the broader Zacks Computer and Technology sector, all of which carry a Zacks Rank #2 (Buy), at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. The long-term earnings growth rates for NVIDIA, KLA and Synopsys are pegged at 104.76%, 15.74% and 17.23%, respectively. Shares of NVIDIA and KLA have appreciated 40.6% and 69.3%, respectively, while Synopsys shares have declined 12%. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Fabrinet (FN) : Free Stock Analysis Report NVIDIA Corporation (NVDA) : Free Stock Analysis Report KLA Corporation (KLAC) : Free Stock Analysis Report Synopsys, Inc. (SNPS) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Record Fourth Quarter Revenue Exceeds Guidance Range Record Fiscal Year 2026 Revenue Increases 36% Year-over-year BANGKOK, Aug. 17, 2026 (GLOBE NEWSWIRE) -- Fabrinet (NYSE: FN), a leading provider of advanced optical packaging and precision optical, electro-mechanical and electronic manufacturing services to original equipment manufacturers of complex products, today announced its financial results for its fourth quarter and fiscal year ended June 26, 2026. Seamus Grady, Chief Executive Officer of Fabrinet, said, “Our fourth quarter was exceptional, capping off a remarkable year of accelerating growth and strong momentum. We achieved record quarterly revenue of $1.316 billion, exceeding our guidance range, and increasing 45% from a year ago. Through excellent execution, our non-GAAP EPS grew even faster, and also reached a new all-time high. For the full fiscal year, revenue increased 36% to $4.6 billion. As we look to fiscal year 2027, we remain very optimistic about the strength of our business and durability in the growth trends we are seeing, as multiple, significant growth drivers across our business contribute to our success.” Fourth Quarter Fiscal Year 2026 Financial Highlights GAAP Results Revenue for the fourth quarter of fiscal year 2026 was $1,315.8 million, compared to $909.7 million for the fourth quarter of fiscal year 2025. GAAP net income for the fourth quarter of fiscal year 2026 was $139.3 million, compared to $87.2 million for the fourth quarter of fiscal year 2025. GAAP net income per diluted share for the fourth quarter of fiscal year 2026 was $3.83, compared to $2.42 for the fourth quarter of fiscal year 2025. Non-GAAP Results Non-GAAP net income for the fourth quarter of fiscal year 2026 was $149.1 million, compared to $95.6 million for the fourth quarter of fiscal year 2025. Non-GAAP net income per diluted share for the fourth quarter of fiscal year 2026 was $4.10, compared to $2.65 for the fourth quarter of fiscal year 2025. Fiscal Year 2026 Financial Highlights GAAP Results Revenue for fiscal year 2026 was $4.64 billion, compared to $3.42 billion for fiscal year 2025. GAAP net income for fiscal year 2026 was $473.0 million, compared to $332.5 million for fiscal year 2025. GAAP net income per diluted share for fiscal year 2026 was $13.05, compared to $9.17 for fiscal year 2025. Non-GAAP Results Non-GAAP net income for fiscal year 2026 was $510.9 million, compared to $368.8 million for fiscal year 2025. Non-GAAP net income per diluted share for fiscal year 2026 was $14.09, compared to $10.17 for fiscal year 2025. Business Outlook Based on information available as of August 17, 2026, Fabrinet is issuing guidance for its first fiscal quarter ending September 25, 2026, as follows: Fabrinet expects first quarter revenue to be in the range of $1.375 billion to $1.425 billion. GAAP net income per diluted share is expected to be in the range of $3.39 to $3.54, based on approximately 36.3 million fully diluted shares outstanding. Non-GAAP net income per diluted share is expected to be in the range of $4.10 to $4.25, based on approximately 36.3 million fully diluted shares outstanding. Guidance for non-GAAP net income per diluted share excludes share-based compensation expenses and certain non-recurring items. A reconciliation of non-GAAP net income per diluted share to the corresponding GAAP measure is available at the end of this press release. Conference Call Information A recorded version of this webcast will be available approximately two hours after the call and accessible at http://investor.fabrinet.com. The webcast will be archived on Fabrinet’s website for a period of one year. About Fabrinet Fabrinet is a leading provider of advanced optical packaging and precision optical, electro-mechanical, and electronic manufacturing services to original equipment manufacturers of complex products, such as optical communication components, modules and subsystems, automotive components, medical devices, industrial lasers and sensors. Fabrinet offers a broad range of advanced optical and electro-mechanical capabilities across the entire manufacturing process, including process design and engineering, supply chain management, manufacturing, advanced packaging, integration, final assembly and testing. Fabrinet focuses on production of high complexity products in any mix and any volume. Fabrinet maintains engineering and manufacturing resources and facilities in Thailand, the United States of America, the People’s Republic of China, and Israel. For more information visit: www.fabrinet.com. Forward-Looking Statements This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include (1) our optimism about the strength of our business and durability in the growth trends we are seeing, and (2) all of the statements under the “Business Outlook” section regarding our expected revenue, GAAP and non-GAAP net income per share, and fully diluted shares outstanding for the first quarter of fiscal year 2027. These forward-looking statements involve risks and uncertainties, and actual results could vary materially from these forward-looking statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to: changes in general economic conditions, either globally or in our markets, and the risk of recession or an economic downturn; disruption to our supply chain, which could increase our costs and affect our ability to procure parts and materials; less customer demand for our products and services than forecasted; less growth in the data center, communications infrastructure, and automotive, industrial and other markets than we forecast; difficulties expanding into additional markets, such as the semiconductor processing, biotechnology, metrology and materials processing markets; increased competition in the optical manufacturing services markets; difficulties in delivering products and services that compete effectively from a price and performance perspective; our reliance on a small number of customers and suppliers; difficulties in managing our operating costs; difficulties in managing and operating our business across multiple countries (including Thailand, the People’s Republic of China, Israel and the U.S.); and other important factors as described in reports and documents we file from time to time with the Securities and Exchange Commission (SEC), including the factors described under the section captioned “Risk Factors” in our Quarterly Report on Form 10-Q filed with the SEC on May 4, 2026. We disclaim any obligation to update information contained in these forward-looking statements whether as a result of new information, future events, or otherwise. Non-GAAP Financial Measures In addition to reporting financial results in accordance with GAAP, we provide investors with certain non-GAAP financial measures. These non-GAAP financial measures are in addition to, and not a substitute for or superior to, measures of financial performance prepared in accordance with GAAP. We believe these non-GAAP financial measures provide investors with useful supplemental information to: (1) measure company performance against historical results, (2) facilitate comparisons to our competitors’ operating results, and (3) allow greater transparency with respect to information used by management in making financial and operational decisions. In addition, we use some of these non-GAAP financial measures to measure company performance for the purposes of determining employee incentive plan compensation. Non-GAAP gross profit, non-GAAP operating profit, non-GAAP net income and non-GAAP net income per diluted share exclude: share-based compensation expenses; severance payment and others; restructuring and other related costs; legal and litigation costs; non-marketable equity securities revaluation; and charges arising from the implementation or application of the OECD Pillar Two global minimum tax framework, including charges resulting from changes in implementing regulations, administrative guidance or related governmental measures. We have excluded these items in order to enhance investors’ understanding of our underlying operations. Non-GAAP free cash flow is net cash provided by (used in) operating activities, minus capital expenditures (purchase of property, plant and equipment). We use free cash flow to measure our ability to generate additional cash from our business operations. There are a number of limitations related to the use of these non-GAAP financial measures versus their nearest GAAP equivalents. For example, other companies may calculate non-GAAP financial measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our non-GAAP financial measures as tools for comparison. We urge you to review the reconciliations of our non-GAAP financial measures to the most directly comparable GAAP financial measures, and not to rely on any single financial measure to evaluate our business. Investor Contact:Garo [email protected]

Fabrinet (FN) came out with quarterly earnings of $4.1 per share, beating the Zacks Consensus Estimate of $3.85 per share. This compares to earnings of $2.65 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +6.49%. A quarter ago, it was expected that this company that assembles optical, electro-mechanical and electronic devices for other companies would post earnings of $3.58 per share when it actually produced earnings of $3.72, delivering a surprise of +3.91%. Over the last four quarters, the company has surpassed consensus EPS estimates four times. Fabrinet, which belongs to the Zacks Electronics - Miscellaneous Components industry, posted revenues of $1.32 billion for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 2.64%. This compares to year-ago revenues of $909.69 million. The company has topped consensus revenue estimates four times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Fabrinet shares have added about 25.3% since the beginning of the year versus the S&P 500's gain of 13.7%. While Fabrinet has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Fabrinet was unfavorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #4 (Sell) for the stock. So, the shares are expected to underperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $4.02 on $1.34 billion in revenues for the coming quarter and $17.46 on $5.79 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Electronics - Miscellaneous Components is currently in the top 18% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. One other stock from the same industry, OSI Systems (OSIS), is yet to report results for the quarter ended June 2026. The results are expected to be released on August 20. This airport security and full-body scanner manufacturer is expected to post quarterly earnings of $3.76 per share in its upcoming report, which represents a year-over-year change of +16.1%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. OSI Systems' revenues are expected to be $528.34 million, up 4.6% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Fabrinet (FN) : Free Stock Analysis Report OSI Systems, Inc. (OSIS) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Interested in Fabrinet? Here are five stocks we like better. Record fiscal 2026 performance: Fabrinet’s fourth-quarter revenue rose 45% year over year to $1.316 billion, while non-GAAP EPS reached $4.10. Full-year revenue increased 36% to $4.6 billion and non-GAAP EPS climbed 39% to $14.09. Data centers drove growth: Data center revenue increased 68% to $669 million, accounting for 51% of quarterly revenue, led by data center interconnect and high-performance computing products. Growth was also broad-based across communications infrastructure and automotive, industrial and other markets. Strong outlook with major capacity expansion: Fabrinet expects fiscal first-quarter revenue of $1.375 billion to $1.425 billion and non-GAAP EPS of $4.10 to $4.25. Thailand and California expansions are intended to support potential long-term revenue capacity of $12.5 billion to $14 billion. MarketBeat Week in Review – 08/10 - 08/14 Fabrinet (NYSE:FN) reported record fourth-quarter results for fiscal 2026, with revenue rising 45% year over year to $1.316 billion and non-GAAP earnings per share reaching $4.10, above the company’s guidance range. The fiscal fourth quarter ended June 26, 2026. For the full fiscal year, revenue increased 36% to $4.6 billion, while non-GAAP EPS rose 39% to $14.09. Chairman and Chief Executive Officer Seamus Grady said the results reflected demand across multiple customers and markets rather than dependence on a single product category or customer. → Applied Materials Beat Everything but Wall Street’s Expectations for Margins Franco-Nevada Earnings: Gold Is Rallying, But Does the Stock Even Care? “This performance did not come from any one product category or customer, but from increasing demand trends across numerous customers in multiple markets,” Grady said, highlighting data center and communications infrastructure demand. Fabrinet said it has changed its revenue reporting structure to better reflect the end markets where customers’ products are deployed. The company will now report revenue in three categories: data centers; communications infrastructure; and automotive, industrial and other revenue. → Texas Roadhouse and Brinker International Have the Recipe Rivals Are Missing 3 Quiet AI Revenue Accelerators With Sales Growth Outpacing Peers Chief Financial Officer Csaba Sverha said the change is presentational and does not affect total revenue for any period. Under the revised structure, data center revenue was Fabrinet’s largest category during the fourth quarter. Data center revenue: $669 million, up 68% year over year and 13% sequentially, representing 51% of total revenue. Communications infrastructure revenue: $413 million, up 40% year over year and 1% sequentially, representing 31% of total revenue. Automotive, industrial and other revenue: $234 million, up 8% year over year and 9% sequentially, representing 18% of total revenue. Within data centers, data center interconnect, or DCI, products were the largest contributor to quarterly growth, with an annualized revenue run rate exceeding $1 billion, Sverha said. High-performance computing also made a substantial contribution. The company expects growth in data center revenue during the fiscal first quarter, supported by transceivers, DCI and HPC products. → AirJoule Technologies: Short Squeeze Setup Amid Rising Risks Communications infrastructure growth was broad-based across telecom systems, satellite communications and telecom components. The automotive, industrial and other segment benefited primarily from EV charging infrastructure products, with a smaller contribution from certain LiDAR customers. On a non-GAAP basis, fourth-quarter gross margin was 12.2%, up 10 basis points sequentially but down 30 basis points from a year earlier. Operating expenses were 1.3% of revenue, resulting in a 10.9% non-GAAP operating margin, the company’s highest level in three years. GAAP net income totaled $139 million, or $3.83 per diluted share. Non-GAAP net income was $149 million, or $4.10 per diluted share. Sverha said the company excluded two items from non-GAAP earnings: an approximately $56.7 million non-cash gain related to the remeasurement of its investment in Raytek, and a $57.4 million provision connected with Thailand’s top-up tax regime under the OECD global minimum tax framework. No cash was paid during fiscal 2026 related to the tax provision, he said. Fabrinet ended the quarter with $876 million in cash and short-term investments, down $70 million from the prior quarter. Operating cash flow was $55 million, while capital expenditures were $92 million, producing free cash flow outflow of $37 million. For the full year, operating cash flow was $257 million and free cash flow was $4 million as the company continued investing in manufacturing capacity. Four customers represented at least 10% of fiscal 2026 revenue: Cisco at 20%, Nvidia at 16%, Nokia at 11% and Amazon at 11%. Fabrinet is expanding manufacturing capacity in Thailand and California to support customer demand and new program ramps. Building 10 at its Chonburi campus remains on track for completion by early 2027 and is expected to add 2 million square feet. The company has already qualified 250,000 square feet on the first floor and expects to qualify a similar amount on the third floor during the current quarter. The company also converted 120,000 square feet of office space at its Pinehurst campus into manufacturing space and commissioned a newly acquired Navanakorn site that adds 200,000 square feet. In Santa Clara, Fabrinet acquired a campus near its existing Fabrinet West facility, including approximately 130,000 square feet of manufacturing space that will more than double its Silicon Valley footprint. Grady said Fabrinet exited fiscal 2026 at an annualized revenue run rate of about $5.3 billion. He estimated that current and planned additions could ultimately support between $12.5 billion and $14 billion of revenue capacity over the coming years, depending on product mix. The company expects Building 10 to add roughly $3 billion to $3.5 billion of capacity, while the Navanakorn and Santa Clara additions could each contribute approximately $200 million to $250 million at full capacity. For the first quarter of fiscal 2027, Fabrinet forecast revenue of $1.375 billion to $1.425 billion, representing 43% year-over-year growth at the midpoint. The company projected non-GAAP EPS of $4.10 to $4.25. Sverha said normal first-quarter expense seasonality is expected to create a temporary margin headwind, though the company still expects operating leverage as revenue expands. Management said customer forecasts extend into fiscal 2027 and beyond, though those forecasts are not order commitments. During the question-and-answer session, Grady said Fabrinet expects new data center transceiver programs to begin ramping as early as the current quarter. A merchant transceiver program is expected to begin in the December quarter, while other programs are expected to begin in early calendar 2027. Grady also said the company sees near-term potential in near-packaged optics, or NPO, and is working on co-packaged optics with several customers. He said Fabrinet’s partnership with Raytek, which is expected to add capacity at Fabrinet’s Thailand campus, could help provide packaging capabilities for future optical products. Management said it remains optimistic about opportunities in DCI, optical circuit switching, satellite communications and complete network systems, while continuing to emphasize that it provides formal guidance only one quarter at a time. 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. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Fabrinet Q4 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.