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Optical Cable Corp. (OCC)
NASDAQ:OCC
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Optical Cable (OCC) AI Stock Analysis

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OCC

Optical Cable

(NASDAQ:OCC)

Rating:61Neutral
Price Target:
$5.50
▼(-13.25% Downside)
Optical Cable's overall stock score is driven by positive technical indicators and strategic corporate events, which are offset by financial challenges and valuation concerns. The earnings call provided a positive outlook with improvements in sales and profitability, but ongoing operational inefficiencies and high leverage remain significant risks.

Optical Cable (OCC) vs. SPDR S&P 500 ETF (SPY)

Optical Cable Business Overview & Revenue Model

Company DescriptionOptical Cable Corporation (OCC) is a leading manufacturer of fiber optic cable and connectivity solutions, primarily serving the telecommunications, data center, and enterprise markets. The company specializes in designing and producing high-performance optical fibers, cables, and connectors that meet the demands of modern data transmission and communication needs. OCC operates in multiple sectors, including telecommunications, military, and industrial applications, providing innovative products that enhance network reliability and speed.
How the Company Makes MoneyOCC generates revenue through the sale of its fiber optic cables, connectors, and related products to various sectors, including telecommunications and data centers. The company has established key revenue streams through direct sales to large telecommunications providers, government contracts, and partnerships with distributors and resellers. Additionally, OCC benefits from recurring revenue through maintenance contracts and service agreements for its products, ensuring ongoing support and upgrades for clients. Strategic partnerships with technology companies and expanding its product offerings to meet the evolving demands of high-speed internet and data transmission also contribute to its earnings.

Optical Cable Earnings Call Summary

Earnings Call Date:Jun 05, 2025
(Q2-2025)
|
% Change Since: |
Next Earnings Date:Sep 15, 2025
Earnings Call Sentiment Positive
The earnings call highlighted significant improvements in net sales, gross profit, and a reduction in net loss, reflecting strong operational performance and growth strategies. However, increased SG&A expenses and limited penetration in the data center market were noted as challenges. Overall, the sentiment is positive as the highlights significantly outweigh the lowlights.
Q2-2025 Updates
Positive Updates
Increased Net Sales
Consolidated net sales for the second quarter of fiscal 2025 increased 8.9% to $17.5 million compared to the same period last year. Sequentially, net sales increased 11.5% from the first quarter of fiscal 2025.
Growth in Gross Profit
Gross profit increased 32.1% to $5.3 million in the second quarter of fiscal 2025 compared to $4 million for the same period last year. The gross profit margin increased to 30.4% from 25.1% in the second quarter of fiscal 2024.
Reduced Net Loss
Net loss for the second quarter of fiscal 2025 was $698,000, a significant improvement from a net loss of $1.6 million in the second quarter of fiscal 2024.
Increased Sales Backlog
Sales order backlog and forward load increased to $7.2 million as of April 30, 2025, from $6.6 million as of January 31, 2025, and $5.7 million as of October 31, 2024.
Negative Updates
Increased SG&A Expenses
SG&A expenses increased to $5.7 million in the second quarter of fiscal year 2025 compared to $5.3 million for the same period last year, primarily due to increases in employee and contracted sales personnel-related costs and shipping costs.
Limited Growth in Data Center Market
The company has not significantly penetrated the hyperscale data center market and is primarily seeing opportunities in smaller Tier 2 and Tier 3 data centers.
Company Guidance
During the second quarter of fiscal year 2025, Optical Cable Corporation (OCC) achieved significant milestones in its financial performance. The company experienced an 8.9% year-over-year increase in consolidated net sales, reaching $17.5 million, and an 11.5% sequential increase from the first quarter. Gross profit grew by 32.1% to $5.3 million, resulting in a gross profit margin of 30.4%, up from 25.1% in the same period last year. The sales backlog and forward load increased to $7.2 million at the end of the quarter, compared to $6.6 million at the end of January 2025, indicating a positive trend in demand. Despite a net loss of $698,000 or $0.09 per share, this was an improvement from the net loss of $1.6 million or $0.21 per share in the second quarter of fiscal 2024. The company attributed its performance to strong execution, increased production volumes, and favorable industry trends, with a focus on growth strategies and operating efficiencies to drive shareholder value.

Optical Cable Financial Statement Overview

Summary
Optical Cable faces significant financial challenges, with ongoing losses and negative profitability margins. While there is modest revenue growth, operational inefficiencies and high leverage pose risks. The company needs to focus on improving operational efficiency and managing debt to enhance financial stability and shareholder returns.
Income Statement
35
Negative
The income statement shows a concerning trend, with negative net income and EBIT margins in the TTM period, indicating operational challenges. There was a slight revenue growth of 3.5% in TTM compared to the previous year, but it was not sufficient to overcome the decline in profitability. The gross profit margin stands at 29.6%, reflecting some strength in cost management, but the negative net profit margin of -4.3% highlights ongoing struggles with operating expenses and cost efficiency.
Balance Sheet
45
Neutral
The balance sheet reveals a moderate level of financial stability. The debt-to-equity ratio is relatively high at 0.48, suggesting a significant reliance on debt financing. However, the equity ratio of 48.9% indicates a balanced structure of liabilities and equity. Return on equity is negative due to net losses, highlighting inefficiencies in generating returns for shareholders.
Cash Flow
40
Negative
Cash flow analysis reveals mixed results. The company achieved a positive operating cash flow in the TTM period, reflecting some operational cash generation capability. However, the free cash flow growth rate is negative compared to the previous period, indicating challenges in maintaining free cash flow. The operating cash flow to net income ratio suggests some improvement in cash conversion efficiency.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue69.00M66.67M72.17M69.08M59.14M55.28M
Gross Profit20.41M18.20M22.29M20.51M16.27M14.09M
EBITDA-997.20K-2.16M4.31M1.55M-766.62K-4.11M
Net Income-2.99M-4.21M2.07M-347.00K6.61M-6.12M
Balance Sheet
Total Assets39.07M40.36M43.88M40.56M37.92M36.56M
Cash, Cash Equivalents and Short-Term Investments894.28K244.25K1.47M216.00K132.00K141.00K
Total Debt9.10M10.95M11.00M10.53M8.32M15.14M
Total Liabilities19.96M19.52M19.16M18.40M15.71M21.30M
Stockholders Equity19.12M20.84M24.72M22.16M22.21M15.26M
Cash Flow
Free Cash Flow1.57M-1.23M-918.52K-1.89M1.92M-3.72M
Operating Cash Flow1.85M-857.02K-395.68K-1.59M2.12M-3.55M
Investing Cash Flow-193.48K-67.14K1.43M-292.46K-192.87K-168.46K
Financing Cash Flow-1.85M-300.29K219.80K1.96M-1.93M3.33M

Optical Cable Technical Analysis

Technical Analysis Sentiment
Positive
Last Price6.34
Price Trends
50DMA
5.27
Positive
100DMA
4.09
Positive
200DMA
3.84
Positive
Market Momentum
MACD
0.37
Negative
RSI
59.03
Neutral
STOCH
56.68
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For OCC, the sentiment is Positive. The current price of 6.34 is above the 20-day moving average (MA) of 5.88, above the 50-day MA of 5.27, and above the 200-day MA of 3.84, indicating a bullish trend. The MACD of 0.37 indicates Negative momentum. The RSI at 59.03 is Neutral, neither overbought nor oversold. The STOCH value of 56.68 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for OCC.

Optical Cable Peers Comparison

Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
61
Neutral
$35.56B8.62-10.46%1.86%8.47%-8.26%
61
Neutral
$52.17M-14.60%5.77%29.54%
61
Neutral
$78.59M-30.53%58.04%21.09%
50
Neutral
$52.02M-21.97%6.84%49.74%
41
Neutral
$18.41M-112.88%-34.89%-579.83%
$48.43M-4.62%
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
OCC
Optical Cable
6.35
3.58
129.24%
AIRG
Airgain
4.31
-3.21
-42.69%
CMBM
Cambium Networks
0.66
-1.02
-60.71%
AMPG
AmpliTech Group
3.81
3.10
436.62%
FKWL
Franklin Wireless
4.11
-0.03
-0.72%

Optical Cable Corporate Events

Private Placements and FinancingBusiness Operations and Strategy
Optical Cable Secures $2M Investment from Lightera
Positive
Jul 10, 2025

On July 7, 2025, Optical Cable Corporation entered into a Stock Purchase Agreement with Lightera, LLC, under which Lightera invested $2 million to acquire a 7.24% stake in OCC. This strategic collaboration aims to expand product offerings, particularly in the data center and enterprise sectors, leveraging the strengths of both companies to deliver integrated cabling and connectivity solutions. The agreement includes Put and Call Rights for share repurchase, providing flexibility and liquidity for both parties. This partnership is expected to enhance OCC’s market presence and accelerate sales growth, creating significant value for shareholders.

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.Date of analysis: Aug 19, 2025