Fabrinet Shares Slide Despite Earnings Beat as Margins and Cash Flow Disappoint

Fabrinet (NYSE:FN) expects AI-driven optical demand to fuel growth, expanding capacity to support $9.8B revenue by March 2025. The company is diversifying its datacom customer base beyond NVIDIA, focusing on high-speed transceivers. Fabrinet remains a pure-play contract manufacturer, avoiding ODM to preserve customer relationships. It is also exploring opportunities in automotive, industrial, and optical switching markets. The company plans $250M in capex for fiscal 2027, aiming to stay ahead of

Fabrinet (FN) fell 20% after reporting Q4 revenue of $1.316B and EPS of $4.10, but Q1 guidance was lower. Marvell (MRVL) dropped 8%, Amphenol (APH) 7%, Coherent (COHR) 12%, and Lumentum (LITE) 10%. AI spending concerns and rising Treasury yields contributed to the sell-off.

Fabrinet (FN) reported Q4 revenue of $1.316B (+45% YoY) and EPS of $4.10, beating estimates. Q1 guidance was also above consensus. Shares fell 7% after hours despite strong results, trading at 43-46x fiscal 2026 EPS. Data-center revenue grew 68% to $669M. Management cited broad growth but warned of margin pressure. Hedge funds increased holdings. The decline may reflect high expectations post-AI rally.

Fabrinet (FN) shares fell 6% to ~$455 despite Q4 revenue of $1.32B and EPS of $4.10, beating guidance. Investors question valuation at a mid-30s P/E. Bulls highlight AI-driven growth, while bears cite customer concentration and cash flow concerns. Data Center revenue was $669M, 51% of total sales.

Fabrinet (FN) reported earnings per share of $4.10, beating estimates by 7.6%, and revenue of $1.32B, exceeding expectations. Despite the beat, the stock fell 19.4% to $482.59. This pattern of beating estimates and still declining has occurred four times in the past five quarters. The company's revenue growth is 35.7%, and its P/E ratio is 36.6x. Analysts suggest the market may have higher expectations than official estimates, and the stock is trading above its fair value of $456.81.

Fabrinet reported Q4 2026 revenue of $1.316 billion, up 45% YoY, driven by data center and communications demand. Data center revenue grew 68% YoY to $669 million. The company expects Q1 2027 revenue between $1.375B and $1.425B. Fabrinet is expanding capacity to reach $12.5B-$14B revenue potential. Management highlighted growth in DCI, HPC, and new transceiver programs.