Fabrinet (FN) AI Stock Analysis

• Market Cap: $17.14B
• Dividend Yield: N/A
• Average Volume (3M): 653.26K
• Price to Earnings (P/E): 49.3
• Beta (1Y): 2.18
• Revenue Growth: 19.71%
• EPS Growth: 14.83%
• Country: US
• Employees: 14,213
• Sector: Technology
• Sector Strength: 88
• Industry: Hardware, Equipment & Parts
• EPS (TTM): 2.92
• Shares Outstanding: 35,827,210
• 10 Day Avg. Volume: 486,651
• 30 Day Avg. Volume: 653,256
• 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: 0.70
• Enterprise Value/Revenue: 3.34
• Enterprise Value/Gross Profit: 27.84
• Enterprise Value/Ebitda: 27.80
• 1Y Price Target: $533.80
• Price Target Upside: 11.57% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 5
• EPS Forecast (FY): 13.2
• Revenue Forecast (FY): $4.37B

• Rating: 78 Outperform
• Price Target: $545.00 ▲(13.91% Upside)

Fabrinet's strong financial performance and positive earnings call are the most significant factors driving the score. The technical analysis suggests a strong upward trend, though caution is advised due to potential overbought conditions. The high P/E ratio indicates overvaluation, which is a concern. The recent board appointment is a positive corporate event, but its impact is limited in the short term.

Positive Factors

Revenue Growth

Strong revenue growth indicates robust demand and effective market penetration, supporting long-term business expansion.

Telecom Revenue Surge

The surge in telecom revenue highlights Fabrinet's competitive edge in a key growth sector, ensuring sustained future earnings.

Balance Sheet Health

A strong balance sheet with minimal debt enhances financial stability and flexibility, supporting long-term strategic initiatives.

Negative Factors

Decline in Free Cash Flow Growth

Declining free cash flow growth could limit investment capacity and impact liquidity if the trend persists.

Datacom Revenue Decline

A decline in datacom revenue may signal challenges in maintaining competitiveness in this segment, affecting overall growth.

Gross Margin Decline

A decline in gross margin can pressure profitability, potentially affecting long-term financial performance if not addressed.

Fabrinet Business Overview & Revenue Model

Company Description

Fabrinet (FN) is a leading provider of advanced manufacturing services for the optical communications and electro-mechanical industries. The company specializes in the production of complex optical and electro-mechanical components, primarily serving customers in the telecommunications, data communications, and industrial markets. Fabrinet's core offerings include precision assembly, optical packaging, and supply chain management services, with a focus on delivering high-quality products and innovative solutions to meet the evolving needs of its clients.

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

Fabrinet demonstrates strong financial health with consistent revenue growth and robust profitability margins. The balance sheet is stable with minimal leverage, although there is a slight decline in free cash flow growth. Overall, the company is well-managed with a positive outlook.

Income Statement

Fabrinet's income statement shows strong performance with a consistent revenue growth rate of 5.09% TTM, indicating a positive trajectory. The company maintains healthy margins, with a gross profit margin of 12.09% and a net profit margin of 9.72% TTM, reflecting efficient cost management and profitability. The EBIT and EBITDA margins are also robust at 10.39% and 11.95% TTM, respectively, showcasing operational efficiency.

Balance Sheet

Fabrinet's balance sheet is solid, characterized by a very low debt-to-equity ratio of 0.0028 TTM, indicating minimal leverage and financial risk. The return on equity is strong at 17.60% TTM, demonstrating effective use of shareholder funds to generate profits. The equity ratio of 68.51% TTM highlights a stable financial structure with a significant portion of assets financed by equity.

Cash Flow

The cash flow statement reveals a slight decline in free cash flow growth at -2.72% TTM, which could be a concern if it persists. However, the operating cash flow to net income ratio of 0.99 TTM and free cash flow to net income ratio of 0.63 TTM indicate that the company is generating sufficient cash to cover its net income, ensuring liquidity and operational stability.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	3.59B	3.42B	2.88B	2.65B	2.26B	1.88B
Gross Profit	430.76M	413.35M	356.12M	336.27M	278.59M	221.36M
EBITDA	431.39M	408.61M	360.50M	305.40M	246.14M	187.84M
Net Income	348.10M	332.53M	296.18M	247.91M	200.38M	148.34M
Balance Sheet
Total Assets	3.01B	2.83B	2.34B	1.98B	1.84B	1.62B
Cash, Cash Equivalents and Short-Term Investments	968.77M	934.24M	858.60M	550.47M	478.15M	547.93M
Total Debt	5.16M	5.47M	4.99M	13.42M	31.15M	45.96M
Total Liabilities	947.60M	849.62M	592.77M	510.99M	581.96M	503.60M
Stockholders Equity	2.06B	1.98B	1.75B	1.47B	1.25B	1.11B
Cash Flow
Free Cash Flow	201.15M	206.55M	365.62M	151.04M	33.66M	74.18M
Operating Cash Flow	347.75M	328.37M	413.15M	213.31M	124.25M	122.16M
Investing Cash Flow	-295.26M	-286.30M	-169.75M	-98.72M	-135.54M	-8.93M
Financing Cash Flow	-149.75M	-147.01M	-64.85M	-80.98M	-92.93M	-42.75M

Fabrinet Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 478.45
• 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 478.45 is above the 20-day moving average (MA) of 434.62, above the 50-day MA of 416.55, and above the 200-day MA of 301.21, indicating a bullish trend. The MACD of 11.83 indicates Negative momentum. The RSI at 63.19 is Neutral, neither overbought nor oversold. The STOCH value of 90.96 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
SANM	79 Outperform	$8.63B	35.48	10.81%	―	7.40%	13.79%
FN	78 Outperform	$17.14B	49.32	18.06%	―	19.71%	14.83%
PLXS	75 Outperform	$4.03B	23.99	12.44%	―	1.82%	56.52%
MKSI	75 Outperform	$10.94B	39.63	11.12%	0.54%	8.13%	780.20%
COHR	67 Neutral	$28.57B	261.98	3.08%	―	20.80%	―
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
JBL	61 Neutral	$23.51B	37.15	40.43%	0.15%	3.18%	-46.01%

Fabrinet Corporate Events

Fabrinet Founder David Mitchell Retires as Chairman

On October 13, 2025, David T. Mitchell, the founder and Chairman of Fabrinet, announced his retirement from the Board after 25 years of leadership. Under his guidance, Fabrinet evolved from a startup to a global manufacturing leader with a revenue exceeding $3.4 billion in fiscal year 2025. The Board appointed CEO Seamus Grady as the new Chairman, ensuring continuity in leadership. Mitchell’s tenure was marked by a commitment to innovation and customer service, which positioned Fabrinet as a trusted partner to leading OEMs worldwide.

Fabrinet Appoints Caroline Dowling to Board

On October 13, 2025, Fabrinet appointed Caroline Dowling to its Board of Directors as a Class I director. Ms. Dowling brings extensive experience in the technology sector, having spent over 20 years at Flex, where she led various divisions and managed complex supply chains. Her appointment is expected to enhance Fabrinet’s board with her demonstrated leadership in manufacturing and supply chain management, potentially driving long-term value for stakeholders.