Fabrinet (FN) AI Stock Analysis

• Market Cap: $20.99B
• Dividend Yield: N/A
• Average Volume (3M): 700.32K
• Price to Earnings (P/E): 56.2
• Beta (1Y): 2.11
• Revenue Growth: 19.71%
• EPS Growth: 14.83%
• Country: US
• Employees: 14,213
• Sector: Technology
• Sector Strength: 88
• Industry: Hardware, Equipment & Parts
• EPS (TTM): 3.36
• Shares Outstanding: 35,826,120
• 10 Day Avg. Volume: 493,640
• 30 Day Avg. Volume: 700,317
• PEG Ratio: 2.47
• Price to Book (P/B): 5.37
• Price to Sales (P/S): 3.11
• P/FCF Ratio: 51.55
• Enterprise Value/Market Cap: 1.04
• Enterprise Value/Revenue: 5.59
• Enterprise Value/Gross Profit: 46.53
• Enterprise Value/Ebitda: 47.50
• 1Y Price Target: $541.25
• Price Target Upside: -7.62% Downside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 9
• EPS Forecast (FY): 13.58
• Revenue Forecast (FY): $4.54B

• Rating: 79 Outperform
• Price Target: $660.00 ▲(12.65% Upside)
• Action: Reiterated Date: 02/25/26
• Date: Action: Reiterated 02/25/26

The score is driven by strong financial quality (growth, profitability, and an extremely low-leverage balance sheet) and a very upbeat earnings outlook with robust guidance. Technicals also support the thesis via a strong uptrend, though momentum looks somewhat stretched. The main constraint is valuation, with a high P/E and no dividend support, alongside cash-flow variability that bears monitoring.

Positive Factors

Extremely conservative balance sheet

Fabrinet's near-zero leverage and large equity base materially reduce financial risk and preserve flexibility. With ROE near 17.9%, the company can fund organic capacity builds, absorb macro shocks and pursue expansion without issuing debt, supporting durable stability over coming quarters.

Sustained revenue growth and healthy margins

A multi-year revenue ramp and consistent ~10% operating profitability show structural demand and margin resilience. That combination underpins repeatable cash generation and operational leverage, giving the business lasting earnings power if product mix and cost control remain steady.

Diversified end markets and HPC ramp

Revenue breadth across telecom, DCI and accelerating non-optical/HPC reduces reliance on any single market. The early HPC ramp demonstrates new, high-growth demand streams that can materially boost long-term top-line and improve portfolio resilience if management successfully scales production.

Negative Factors

Free cash flow volatility and weaker conversion

A near-50% drop in free cash flow and a decline in cash conversion rates indicate higher reinvestment or working-capital swings. Persistent FCF volatility can constrain self-funded investments, limit optionality for returns of capital, and raise sensitivity to capex and seasonal working-capital needs.

Component concentration constraining datacom shipments

Dependence on scarce, specialized components (eg, EML lasers) creates a structural production risk: supply shortages can cap revenue even with healthy demand, force qualification delays, and make near-term growth supply-driven rather than market-driven until multi-sourcing is deeply established.

HPC revenue is early-stage and lumpy

While HPC offers upside, its growth is concentrated and dependent on successful line qualification and repeatable manufacturing. That makes near-term revenue volatile and execution-sensitive; failure to scale cleanly could undermine margin improvement expectations tied to this segment.

Fabrinet Business Overview & Revenue Model

Company Description

Fabrinet provides optical packaging and precision optical, electro-mechanical, and electronic manufacturing services in North America, the Asia-Pacific, and Europe. The company offers a range of advanced optical and electro-mechanical capabilities in the manufacturing process, including process design and engineering, supply chain management, manufacturing, printed circuit board assembly, advanced packaging, integration, final assembly, and testing. Its products include switching products, including reconfigurable optical add-drop multiplexers, optical amplifiers, modulators, and other optical components and modules that enable network managers to route voice, video, and data communications traffic through fiber optic cables at various wavelengths, speeds, and over various distances. The company's products also comprise tunable lasers, transceivers, and transponders; and active optical cables, which provide high-speed interconnect capabilities for data centers and computing clusters, as well as Infiniband, Ethernet, fiber channel, and optical backplane connectivity. In addition, it provides solid state, diode-pumped, gas, and fiber lasers used in semiconductor processing, biotechnology and medical device, metrology, and material processing industries; and differential pressure, micro-gyro, fuel, and other sensors used in automobiles, as well as non-contact temperature measurement sensors for the medical industry. Further, the company designs and fabricates application-specific crystals, lenses, prisms, mirrors, laser components, and substrates; and other custom and standard borosilicate, clear fused quartz, and synthetic fused silica glass products. It serves original equipment manufacturers of optical communication components, modules and sub-systems, industrial lasers, automotive components, medical devices, and sensors. The company was incorporated in 1999 and is based in George Town, the Cayman Islands.

How the Company Makes Money

Fabrinet generates revenue through its contract manufacturing services, primarily by producing optical components and systems for various high-tech industries. The company operates on a business model that focuses on long-term partnerships with key clients, allowing for a stable revenue stream from recurring contracts. Key revenue streams include the manufacturing of optical components, assembly of electro-mechanical systems, and value-added services such as testing and logistics. Additionally, Fabrinet benefits from economies of scale and operational efficiencies, which enhance profitability. Significant partnerships with major companies in the telecommunications and data center sectors further contribute to its earnings, as these clients often require high-volume production and specialized manufacturing expertise.

Fabrinet Financial Statement Overview

Summary

Fundamentals are strong overall: solid revenue growth and ~10%+ operating profitability, plus an exceptionally conservative balance sheet with minimal debt. The main offset is cash-flow volatility, with a sharp recent decline in free cash flow and weaker cash conversion versus the prior year.

Income Statement

FN shows strong top-line momentum with revenue up 8.3% in TTM (Trailing-Twelve-Months) and a multi-year expansion from ~$1.88B (2021) to ~$3.89B (TTM). Profitability is solid and fairly consistent, with TTM operating margin ~10.5% and net margin ~9.7%. A key watch item is modest margin pressure versus 2023–2024 levels (gross and EBITDA margins have drifted down), suggesting a slightly less favorable mix or higher costs even as earnings remain strong.

Balance Sheet

The balance sheet is a clear strength: leverage is extremely low (TTM debt-to-equity ~0.003; total debt ~$4.9M against ~$2.18B equity). Equity and assets have grown meaningfully over time, supporting scale-up without relying on debt. Returns are attractive and stable, with return on equity ~17.9% in TTM (Trailing-Twelve-Months), indicating efficient capital use; the main limitation is not financial risk, but that returns will depend on sustaining operating performance rather than balance-sheet leverage.

Cash Flow

Cash generation is positive but more volatile. In TTM (Trailing-Twelve-Months), operating cash flow is ~$278M and free cash flow is ~$102M, but free cash flow fell sharply (about -49% growth) versus the prior annual period. Cash conversion is moderate, with free cash flow at ~58% of net income in TTM, down from stronger conversion in 2024 (free cash flow was ~88% of net income). The trend suggests higher reinvestment needs or working-capital swings, which bears monitoring even though profitability remains solid.

Breakdown	TTM	Jun 2025	Jun 2024	Jun 2023	Jun 2022	Jun 2021
Income Statement
Total Revenue	3.89B	3.42B	2.88B	2.65B	2.26B	1.88B
Gross Profit	467.60M	413.35M	356.12M	336.27M	278.59M	221.36M
EBITDA	458.04M	408.61M	360.50M	305.40M	246.14M	187.84M
Net Income	374.09M	332.53M	296.18M	247.91M	200.38M	148.34M
Balance Sheet
Total Assets	3.27B	2.83B	2.34B	1.98B	1.84B	1.62B
Cash, Cash Equivalents and Short-Term Investments	960.77M	934.24M	858.60M	550.47M	478.15M	547.93M
Total Debt	8.08M	9.15M	8.63M	13.42M	31.15M	45.96M
Total Liabilities	1.08B	849.62M	592.77M	510.99M	581.96M	503.60M
Stockholders Equity	2.18B	1.98B	1.75B	1.47B	1.25B	1.11B
Cash Flow
Free Cash Flow	101.79M	206.55M	365.62M	151.04M	33.66M	74.18M
Operating Cash Flow	278.11M	328.37M	413.15M	213.31M	124.25M	122.16M
Investing Cash Flow	-276.34M	-286.30M	-169.75M	-98.72M	-135.54M	-8.93M
Financing Cash Flow	-86.30M	-147.01M	-64.85M	-80.98M	-92.93M	-42.75M

Fabrinet Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 585.87
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FN, the sentiment is Positive. The current price of 585.87 is above the 20-day moving average (MA) of 495.98, above the 50-day MA of 481.87, and above the 200-day MA of 375.97, indicating a bullish trend. The MACD of 21.29 indicates Negative momentum. The RSI at 69.52 is Neutral, neither overbought nor oversold. The STOCH value of 91.08 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for FN.

Fabrinet Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
FN	79 Outperform	$20.99B	56.18	18.72%	―	19.71%	14.83%
PLXS	74 Outperform	$5.46B	31.72	12.63%	―	1.82%	56.52%
JBL	73 Outperform	$28.12B	40.64	47.87%	0.14%	13.18%	-38.37%
SANM	71 Outperform	$8.64B	37.84	9.74%	―	7.40%	13.79%
MKSI	69 Neutral	$16.89B	58.06	11.74%	0.54%	8.13%	780.20%
COHR	63 Neutral	$47.78B	252.24	3.63%	―	20.80%	―
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%

Fabrinet Corporate Events

Fabrinet Holds 2025 Annual Shareholder Meeting

On December 11, 2025, Fabrinet, a company involved in the manufacturing sector, held its 2025 Annual General Meeting of Shareholders. At the meeting, approximately 95% of the total shares entitled to vote were represented. The shareholders elected Dr. Homa Bahrami and Caroline Dowling as Class I directors for a three-year term. Additionally, the shareholders ratified the appointment of PricewaterhouseCoopers ABAS Ltd. as the independent auditors for the fiscal year ending June 26, 2026, and approved the compensation of Fabrinet’s named executive officers.

The most recent analyst rating on (FN) stock is a Buy with a $545.00 price target. To see the full list of analyst forecasts on Fabrinet stock, see the FN Stock Forecast page.