Fabrinet (FN)
NYSE:FN
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Fabrinet
(NYSE:FN)
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Rating:72Outperform
Price Target:
$781.00
▲(13.21% Upside)
Action:Reiterated
Date:05/09/26
The score is driven primarily by strong fundamentals—consistent growth, solid margins, and a very low-leverage balance sheet—tempered by the recent deterioration in free cash flow. The latest earnings call supports the outlook with strong guidance and program momentum, but near-term supply constraints and margin/cash-flow pressure add risk. Technically the stock is mixed (below the 20-day but above longer moving averages), while valuation is a headwind given the high P/E and no dividend yield provided.
Positive Factors
Revenue & Profitability Growth
Fabrinet has transformed into a significantly larger, profitable contract manufacturer: revenue expanded from $1.88B (2021) to $4.24B TTM, with durable ~10% EBIT and net margins and improving ROE (~19.6%). That scale and sustained profitability support reinvestment and customer retention over the medium term.
Negative Factors
Weakened Free Cash Flow
Free cash flow compression versus recent years reduces near-term financial optionality: conversion fell to ~0.18x net income TTM. While cash balances remain healthy, lower FCF limits organic capacity funding, buybacks, or buffers against longer supply or margin shocks over the next several quarters.
Read all positive and negative factors
Positive Factors
Negative Factors
Revenue & Profitability Growth
Fabrinet has transformed into a significantly larger, profitable contract manufacturer: revenue expanded from $1.88B (2021) to $4.24B TTM, with durable ~10% EBIT and net margins and improving ROE (~19.6%). That scale and sustained profitability support reinvestment and customer retention over the medium term.
Read all positive factors
Fabrinet Key Performance Indicators (KPIs)
Any
Revenue by Geography
Breaks down revenue by region, exposing where Fabrinet earns sales and how dependent it is on particular markets such as North America, Asia, or Europe. Geographic trends highlight demand shifts, supply‑chain and geopolitical risk, and currency exposure, and show whether the company’s manufacturing footprint supports customer proximity and growth in key markets. Useful for assessing revenue stability and where future expansion or vulnerability may lie.
Breaks down revenue by region, exposing where Fabrinet earns sales and how dependent it is on particular markets such as North America, Asia, or Europe. Geographic trends highlight demand shifts, supply‑chain and geopolitical risk, and currency exposure, and show whether the company’s manufacturing footprint supports customer proximity and growth in key markets. Useful for assessing revenue stability and where future expansion or vulnerability may lie.
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The Fly
The FlyFabrinet (FN) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$25.22B
Dividend YieldN/A
Average Volume (3M)805.50K
Price to Earnings (P/E)39.5
Beta (1Y)1.85
Revenue Growth29.79%
EPS Growth30.06%
CountryUS
Employees14,213
SectorTechnology
Sector Strength88
IndustryHardware, Equipment & Parts
Share Statistics
EPS (TTM)11.76
Shares Outstanding35,829,740
10 Day Avg. Volume860,088
30 Day Avg. Volume805,497
Financial Highlights & Ratios
PEG Ratio2.47
Price to Book (P/B)5.37
Price to Sales (P/S)3.11
P/FCF Ratio51.55
Enterprise Value/Market Cap0.99
Enterprise Value/Revenue5.87
Enterprise Value/Gross Profit49.11
Enterprise Value/Ebitda50.49
Forecast
1Y Price Target
$763.67Price Target Upside10.69% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering7
EPS Forecast (FY)13.62
Revenue Forecast (FY)$4.59B
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...
How the Company Makes Money
Fabrinet makes money by providing contract manufacturing services to OEM customers and recognizing revenue from the sale of manufactured products and assemblies it builds to customer specifications. Its core revenue stream is manufacturing and ass...
Fabrinet Earnings Call Summary
Earnings Call Date:May 04, 2026
(Q3-2026)
| % Change Since: |
Next Earnings Date:Aug 24, 2026
Earnings Call Sentiment Positive
The call was predominantly positive: management reported record revenue and EPS, very strong growth in DCI and non-Optical Communications (HPC), secured hyperscale and merchant datacom programs, and laid out substantial capacity expansion and strategic investments (Raytec, Navanakorn). The main negatives were supply-chain constraints that limited datacom shipments (datacom revenue +4% YoY but -6% QoQ), near-term gross margin pressure from FX and ramp inefficiencies, and a quarter with reduced operating cash flow and slight free cash flow outflow. Overall, the company emphasized strong demand, multiple new growth vectors, and capacity/capital plans to support continued expansion while acknowledging short-term supply and margin headwinds.Positive Updates
Record Revenue and Accelerating Growth
Revenue of $1.214 billion in Q3 FY2026, a record and above guidance, with year-over-year growth of 39% and sequential growth of ~7%.
Negative Updates
Datacom Revenue Moderation and Supply Constraints
Datacom revenue was $260 million, up only 4% year over year but down 6% sequentially; management said component and material supply shortages (lasers, memory, certain ASICs and other commodities) constrained shipments such that demand exceeded what could be shipped.
Read all updates
Q3-2026 Updates
Positive
Negative
Record Revenue and Accelerating Growth
Revenue of $1.214 billion in Q3 FY2026, a record and above guidance, with year-over-year growth of 39% and sequential growth of ~7%.
Read all positive updates
Company Guidance
Fabrinet guided fourth-quarter revenue of $1.25 billion to $1.29 billion (approx. 40% year‑over‑year growth at the midpoint) with gross‑margin dynamics similar to Q3 (Q3 non‑GAAP gross margin 12.1%) and non‑GAAP EPS of $3.72 to $3.87; management said revenue in all major product categories should rise in Q4 but datacom growth will be more measured due to ongoing component supply constraints, with the company expecting the new hyperscale and merchant datacom ramps to contribute more meaningfully in fiscal 2027. They reiterated operating leverage (Q3 operating margin 10.7%, OpEx ~1.4% of revenue) and a mid‑single‑digit effective GAAP tax rate for the year, noted Q3 cash and short‑term investments of $946 million, Q3 operating cash flow of $53 million, Q3 capex of $64 million and free cash flow outflow of $11 million, and disclosed near‑term capital moves to support growth including an $11 million Navanakorn purchase (Q4), a ~$32 million minority investment in Raytec, and about $169 million remaining on the share‑repurchase authorization.Fabrinet Financial Statement Overview
Summary
Income Statement
86
Very Positive
Balance Sheet
95
Very Positive
Cash Flow
64
Positive
| Breakdown | TTM | Jun 2025 | Jun 2024 | Jun 2023 | Jun 2022 | Jun 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 4.24B | 3.42B | 2.88B | 2.65B | 2.26B | 1.88B |
| Gross Profit | 506.35M | 413.35M | 356.12M | 336.27M | 278.59M | 221.36M |
| EBITDA | 492.50M | 408.61M | 360.50M | 305.40M | 246.14M | 187.84M |
| Net Income | 418.01M | 332.53M | 296.18M | 247.91M | 200.38M | 148.34M |
Balance Sheet | ||||||
| Total Assets | 3.51B | 2.83B | 2.34B | 1.98B | 1.84B | 1.62B |
| Cash, Cash Equivalents and Short-Term Investments | 945.24M | 934.24M | 858.60M | 550.47M | 478.15M | 547.93M |
| Total Debt | 4.42M | 9.15M | 8.63M | 13.42M | 31.15M | 45.96M |
| Total Liabilities | 1.20B | 849.62M | 592.77M | 510.99M | 581.96M | 503.60M |
| Stockholders Equity | 2.30B | 1.98B | 1.75B | 1.47B | 1.25B | 1.11B |
Cash Flow | ||||||
| Free Cash Flow | 45.58M | 206.55M | 365.62M | 151.04M | 33.66M | 74.18M |
| Operating Cash Flow | 256.85M | 328.37M | 413.15M | 213.31M | 124.25M | 122.16M |
| Investing Cash Flow | -152.99M | -286.30M | -169.75M | -98.72M | -135.54M | -8.93M |
| Financing Cash Flow | -52.23M | -147.01M | -64.85M | -80.98M | -92.93M | -42.75M |
Fabrinet Technical Analysis
Positive
689.89
Price Trends
630.08
Positive
564.84
Positive
482.69
Positive
Market Momentum
15.90
Positive
55.12
Neutral
58.91
Neutral
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 689.89 is above the 20-day moving average (MA) of 677.83, above the 50-day MA of 630.08, and above the 200-day MA of 482.69, indicating a bullish trend. The MACD of 15.90 indicates Positive momentum. The RSI at 55.12 is Neutral, neither overbought nor oversold. The STOCH value of 58.91 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for FN.
Fabrinet Risk Analysis
Fabrinet disclosed 41 risk factors in its most recent earnings report. Fabrinet reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Fabrinet Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $73.87B | 48.41 | 5.26% | ― | 18.00% | ― | |
73 Outperform | $7.11B | 27.85 | 12.83% | ― | 8.64% | 32.91% | |
72 Outperform | $25.22B | 39.46 | 19.60% | ― | 29.79% | 30.06% | |
70 Outperform | $13.21B | 18.96 | 10.88% | ― | 44.48% | 8.59% | |
69 Neutral | $38.44B | 31.64 | 58.99% | 0.14% | 19.00% | 78.70% | |
69 Neutral | $21.66B | 46.10 | 12.24% | 0.54% | 11.44% | 44.67% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% |
* Technology Sector Average
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Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.