Fabrinet Reports Strong Q2 Earnings but Shares Drop 15%
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jan 30 2026
0mins
Should l Buy FN?
Source: Fool
Fabrinet shares rose 8.82% as it crossed above the 5-day SMA, reflecting positive market conditions.
Despite reporting strong fiscal second quarter results that exceeded consensus estimates by 5% in revenue and $0.11 in EPS, Fabrinet's stock fell 15%, indicating market concerns about future growth prospects. The telecom segment saw a remarkable 59% year-over-year growth, driven by demand from clients like Ciena and Cisco, while Datacom revenue declined 7% year-over-year, highlighting supply constraints on 200G lasers impacting overall performance. Management expressed optimism for future growth as NVIDIA has approved a new EML supplier, which is expected to alleviate current supply constraints and drive sequential growth in Datacom revenue in upcoming quarters.
The strong earnings report showcases Fabrinet's robust performance in the semiconductor sector, but the significant drop in stock price suggests that investors are cautious about the company's future growth potential, particularly in light of the mixed performance across its segments.
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Analyst Views on FN
Wall Street analysts forecast FN stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for FN is 544.83 USD with a low forecast of 499.00 USD and a high forecast of 600.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
6 Analyst Rating
5 Buy
1 Hold
0 Sell
Strong Buy
Current: 442.700
Low
499.00
Averages
544.83
High
600.00
Current: 442.700
Low
499.00
Averages
544.83
High
600.00
About FN
Fabrinet is a 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 sub-systems, automotive components, industrial lasers, medical devices and sensors. The Company offers a range of advanced optical and electro-mechanical capabilities across the entire manufacturing process, including process design and engineering, supply chain management, manufacturing, complex printed circuit board assembly, advanced packaging, integration, final assembly and testing. It focuses primarily on low-volume production of a wide variety of high complexity products. It also designs and fabricates applications-specific crystals, lenses, prisms, mirrors, laser components, and substrates (customized optics) and other custom and standard borosilicate, clear fused quartz, and synthetic fused silica glass products (customized glass).
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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