Applied Optoelectronics, Inc. — Earnings Quality Grade F
AAOI · Technology
Major red flags
Screening Summary
Management Signals
Source: SEC EDGAR 8-K Item 5.02, with exhibit links when available
Financial Trends
Revenue & Net Income ($B)
Margins (%)
18-Point Screening
Revenue Quality
DSO surged by 25 days (171 → 196)
AR outpaced revenue for 2 consecutive years
Revenue grew 82.8% but CFFO declined -150.9%
Expense Quality
Inventory growth 107.8% far exceeds COGS 70.0%, margin rising. Fraud signal
CapEx growth 308.8% is >2x revenue growth 82.8%
SG&A/Gross Profit = 77.4%, exceeds 70%
Gross margin swung +5.3pp (24.8% → 30.0%)
Cash Flow Quality
CFFO/NI = 4.56. Profits backed by cash
FCF is negative ($-0.4B)
Accruals ratio = 11.7%. Exceeds 10%
Cash $0.2B covers 83% of debt $0.2B
Balance Sheet Health
Goodwill+Intangibles $0.0B = 1% of equity. Manageable
Interest coverage = -14.2x (<2x). Financial stress
Other assets grew 599.3% vs revenue 82.8%
No write-off data
Acquisition Risk
FCF after acquisitions negative for 3 years
Goodwill+Intangibles change -1% YoY. Normal
Manipulation Score
M-Score = -0.59 (> -1.78). LIKELY MANIPULATOR
Beneish M-Score
Altman Z-Score
Generated from public financial data using forensic accounting frameworks. Not investment advice. Data: Yahoo Finance · 2026-04-25