Optical Cable (OCC) AI Stock Analysis

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Optical Cable

(NASDAQ:OCC)

Rating:53Neutral

Price Target:

$3.00

▲(3.45%Upside)

Optical Cable Corporation shows signs of improvement with positive trends in sales and gross profit, as highlighted in the recent earnings call. However, persistent net losses and negative valuation metrics weigh heavily on the stock. The technical analysis indicates neutral momentum, while the financial performance reflects ongoing challenges in profitability and cash flow consistency. Overall, the stock is moderately positioned, with the potential for improvement contingent on continued operational efficiency and market growth.

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

Market Cap

$23.78M

Dividend YieldN/A

Average Volume (3M)10.68K

Price to Earnings (P/E)―

Beta (1Y)0.97

Revenue Growth-1.72%

EPS Growth-1591.92%

CountryUS

Employees339

SectorTechnology

Sector Strength81

IndustryCommunication Equipment

Share Statistics

EPS (TTM)-0.14

Shares Outstanding8,198,577

10 Day Avg. Volume5,749

30 Day Avg. Volume10,676

Financial Highlights & Ratios

PEG Ratio-0.82

Price to Book (P/B)1.20

Price to Sales (P/S)0.00

P/FCF Ratio14.67

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price TargetN/A

Price Target UpsideN/A

Rating ConsensusN/A

Number of Analyst Covering0

Optical Cable Business Overview & Revenue Model

Company DescriptionOptical Cable Corporation, together with its subsidiaries, manufactures and sells fiber optic and copper data communications cabling and connectivity solutions primarily for the enterprise market in the United States and internationally. The company provides fiber optic and hybrid cables for high bandwidth transmission of data, video, and voice communications; and copper datacom cables, including unshielded and shielded twisted pair constructions. Its fiber optic connectivity products include fiber optic wall mounts, cabinet mount and rack mount enclosures, pre-terminated fiber optic enclosures, fiber optic connectors, splice trays, fiber optic jumpers, plug and play cassette modules, pre-terminated fiber optic cable assemblies, adapters, and accessories; and copper connectivity products comprising category compliant patch panels, jacks, plugs, patch cords, faceplates, surface mounted boxes, distribution and multi-media boxes, copper rack mount and wall mount enclosures, cable assemblies, cable organizers, and other wiring products for equipment rooms, telecommunications closets, data centers, and workstation applications. In addition, it offers network, data storage, and telecommunications management systems, such as data cabinets, wall mount enclosures, horizontal and vertical cable management systems, and open frame relay racks for enterprise and residential use; and datacom wiring products, including various enclosures, and modules and modular outlets for single dwelling and multiple dwelling residential uses. Further, the company provides specialty fiber optic connectors and connectivity components, copper datacom connectors, and related systems and solutions for military, other harsh environment, and special applications. It sells its products to distributors, original equipment manufacturers, value-added resellers, and end-users. Optical Cable Corporation was incorporated in 1983 and is headquartered in Roanoke, Virginia.

How the Company Makes MoneyOptical Cable Corporation makes money by designing, manufacturing, and selling a wide array of fiber optic and copper cabling products. Its revenue model primarily revolves around direct sales to end-users, distributors, and system integrators across various industries. The company generates revenue through the sale of its core products, which include fiber optic cables, copper cables, and connectivity components. In addition to direct sales, OCC may engage in strategic partnerships and collaborations to expand its market reach and product offerings, enhancing its revenue streams. The company's earnings are also supported by its focus on innovation and quality, enabling it to maintain a competitive edge and cater to the evolving needs of its customers.

Optical Cable Earnings Call Summary

Earnings Call Date:Mar 10, 2025

(Q1-2025)

% Change Since: -26.40%|

Next Earnings Date:Jun 16, 2025

Earnings Call Sentiment Positive

The earnings call highlighted a positive trajectory in net sales, gross profit, international sales, and a growing backlog, suggesting operational improvements and market recovery. However, challenges remain with increased SG&A expenses and ongoing net losses, albeit reduced compared to the previous year. The sentiment leans positive due to the significant improvements outweighing the challenges.

Q1-2025 Updates

Positive Updates

Growth in Net Sales and Gross Profit

Net sales increased 6% to $15.7 million, and gross profit increased 24.6% or $913,000 to $4.6 million in the first quarter of fiscal 2025 compared to the same period last year.

Increased Sales Order Backlog

Sales order backlog and forward load increased approximately 16% to $6.6 million compared to October 31, 2024.

Improvements in Military and Specialty Markets

The company saw improvements and strength in both enterprise and specialty markets, including the military sector.

International Sales Growth

Net sales to customers outside of the United States increased 21.3% in the first quarter of fiscal 2025 compared to the same period last year.

Negative Updates

Increased SG&A Expenses

SG&A expenses increased to $5.5 million from $5.1 million in the same period last year, primarily due to increases in employee and contracted sales personnel-related costs.

Net Loss Reduction but Continued Losses

OCC recorded a net loss of $1.1 million or $0.14 per share, though this was an improvement from a net loss of $1.4 million or $0.18 per share in the previous year.

Impact of Seasonality

The first quarter was impacted by typical seasonality factors, which may also affect the second quarter.

Company Guidance

During the first quarter of fiscal year 2025, Optical Cable Corporation reported growth in key metrics, notably a 6% increase in net sales to $15.7 million and a 24.6% increase in gross profit to $4.6 million compared to the same period last year. The company also experienced a rise in gross profit margin to 29.4%, up from 25% in the first quarter of fiscal 2024, benefiting from production efficiencies and operating leverage. Sales order backlog increased by approximately 16% to $6.6 million from October 31, 2024. Despite these positive trends, SG&A expenses rose to $5.5 million, contributing to a net loss of $1.1 million, or $0.14 per share, an improvement from the previous year's loss of $1.4 million, or $0.18 per share. The company remains optimistic about future growth, driven by improvements in both enterprise and specialty markets and its continued focus on executing growth strategies efficiently.

Optical Cable Financial Statement Overview

Summary

Optical Cable faces profitability challenges with persistent net losses and negative margins. While the balance sheet shows some improvement in leverage, the company's cash flow generation is inconsistent. Sustained revenue growth and improved operational efficiency are critical for future stability.

Income Statement

Neutral

The income statement shows a declining revenue trend with a negative net profit margin, indicating operational challenges. Gross profit margin is positive but insufficient to cover operating expenses, leading to negative EBIT and EBITDA margins. Recent TTM data shows a slight revenue increase, but profitability remains an issue.

Balance Sheet

Neutral

The balance sheet reflects moderate leverage with a decreasing debt-to-equity ratio, which is a positive sign. However, equity ratio is not optimal, and return on equity is negative due to consistent net losses. The company's asset base is shrinking, indicating potential long-term sustainability concerns.

Cash Flow

Neutral

Cash flow analysis indicates improvement in free cash flow, turning positive in the TTM period after negative figures in preceding years. However, the operating cash flow to net income ratio remains volatile, reflecting inconsistent cash generation relative to reported earnings.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
67.56M	66.67M	72.17M	69.08M	59.14M	55.28M
	Gross Profit
19.10M	18.20M	22.29M	20.51M	16.27M	14.09M
	EBIT
-2.82M	-3.38M	993.08K	473.00K	-1.97M	-5.53M
	EBITDA
-1.86M	-2.16M	4.31M	1.55M	-766.62K	-4.11M
	Net Income Common Stockholders
-3.89M	-4.21M	2.07M	-347.00K	6.61M	-6.12M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
128.31K	244.25K	1.47M	216.00K	132.00K	141.00K
	Total Assets
37.82M	40.36M	43.88M	40.56M	37.92M	36.56M
	Total Debt
8.27M	10.95M	11.00M	10.53M	8.32M	15.14M
	Net Debt
8.14M	10.71M	9.53M	10.31M	8.19M	14.99M
	Total Liabilities
18.08M	19.52M	19.16M	18.40M	15.71M	21.30M
	Stockholders Equity
19.74M	20.84M	24.72M	22.16M	22.21M	15.26M
Cash Flow		Free Cash Flow
1.72M	-1.23M	-918.52K	-1.89M	1.92M	-3.72M
	Operating Cash Flow
2.08M	-857.02K	-395.68K	-1.59M	2.12M	-3.55M
	Investing Cash Flow
-62.09K	-67.14K	1.43M	-292.46K	-192.87K	-168.46K
	Financing Cash Flow
-2.11M	-300.29K	219.80K	1.96M	-1.93M	3.33M

Optical Cable Technical Analysis

Technical Analysis Sentiment

Negative

Last Price2.90

Price Trends

50DMA

2.95

Negative

100DMA

3.69

Negative

200DMA

3.15

Negative

Market Momentum

MACD

-0.05

Positive

RSI

46.23

Neutral

STOCH

27.40

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For OCC, the sentiment is Negative. The current price of 2.9 is below the 20-day moving average (MA) of 3.02, below the 50-day MA of 2.95, and below the 200-day MA of 3.15, indicating a bearish trend. The MACD of -0.05 indicates Positive momentum. The RSI at 46.23 is Neutral, neither overbought nor oversold. The STOCH value of 27.40 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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
CPSH	68 Neutral	$41.40M	―	-18.07%	―	-13.83%	-476.23%
Sector *	61 Neutral	$11.56B	10.44	-6.88%	2.93%	7.49%	-8.97%
TRT	60 Neutral	$22.21M	37.80	0.06%	―	-14.64%	-97.84%
OCC	53 Neutral	$23.78M	―	-18.07%	―	-1.72%	-1591.92%
DAIO	52 Neutral	$25.69M	―	-14.35%	―	-18.88%	-534.79%
CXAI	51 Neutral	$20.65M	―	-86.92%	―	-9.33%	74.24%

* Technology Sector Average

Performance Comparison

OCC

Optical Cable

2.90

-0.01

-0.34%

DAIO

Data I/O

2.78

-0.11

-3.81%

TRT

Trio-Tech International

5.01

-1.51

-23.16%

CPSH

CPS Technologies

2.82

1.08

62.07%

CXAI

CXApp

1.01

-1.66

-62.17%

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

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.