Piper Jaffray maintained an Overweight rating on Applied Optoelectronics (NASDAQ: AAOI), and cut the price target to $14.00 (from $21.00), following the company's 1Q earnings report. Revenues of $50.4M were inline with the company’s pre-announced guidance of $50 – 50.5M. Higher than expected opex resulted in operating margins of (0.9%) and translated into non-GAAP EPS of ($0.04).

Analyst Troy Jensen commented, "Applied Optoelectronics reported Q1 results that were in line with its pre-announcement, but guided Q2 revenues and EPS materially below the Street. Lower than expected CATV revenues were the primary driver to lower than expected Q1 results, but a delay in the availability of a crucial chipset that is a vital component for the overall optical transmission system has pushed out orders for its QSFP28 modules. We believe the delay was primarily driven by the company’s largest customer (Amazon), and as a result the company is not expecting QSFP28 to ramp until late 2H16. While extremely disappointed in the push out, we remain believers in the 100G Datacom upgrade cycle and believe AAOI is well positioned to see meaningful earnings growth once this next gen chip is broadly available. Given the significant pull back in shares in the after-market, we view this as an attractive buying opportunity."

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Shares of Applied Optoelectronics closed at $10.26 yesterday.