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FN Jumps 25% in a Month: Is There More Room for the Stock to Grow?
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Key Takeaways
FN posted record fiscal Q2 2026 results with $1.13B revenues and $3.36 non-GAAP EPS, both beating estimates.
FN's HPC revenues hare expected to exceed $150M per quarter in the next couple of quarters.
FN guides Q3 FY26 revenues of $1.15B-$1.2B as DCI demand and datacom programs ramp.
Fabrinet (FN - Free Report) shares have jumped 24.9% in a month, driven by an accelerating Telecom and Datacenter Interconnect (DCI) revenues, easing datacom constraints and continued scaling in High-Performance Computing (HPC) business embedded in management’s fiscal third-quarter outlook.
The HPC program is scaling with added automation and credible execution, with optionality to gain share as a qualified second source. Fabrinet cites strong visibility, with sequential growth expected and catalysts ahead as DCI accelerates, next-gen 800ZR nears production and datacom constraints ease with second-source approvals.
In the second quarter of fiscal 2026, HPC contributed $85.6 million, and management expects the current program to exceed $150 million per quarter within the next couple of quarters, with double-digit sequential growth guided for the third quarter of fiscal 2026.
However, Fabrinet is facing stiff competition from the likes of Lumentum (LITE - Free Report) , Coherent (COHR - Free Report) and Jabil (JBL - Free Report) . In the trailing 12-month period, Fabrinet shares have jumped 179.5%, underperforming Lumentum’s and Coherent’s 919.4% and 288.5% increases, respectively. However, FN shares outperformed Jabil’s return of 77.7%.
FN Stock Performance
Image Source: Zacks Investment Research
Fabrinet Benefits From Strong Portfolio, Capacity Addition
Fabrinet’s record second-quarter fiscal 2026 revenues and earnings exceeded guidance on execution and leverage. FN delivered strong second-quarter fiscal 2026 non-GAAP earnings of $3.36 per share that beat the Zacks Consensus Estimate by 3.07%. Revenues of $1.13 billion surpassed the consensus mark by 5.03%. The figure jumped 36% year over year and 16% sequentially.
Third-quarter fiscal 2026 guidance indicates continued top-line growth (35% year-over-year growth at mid-point of $1.15-$1.2 billion range) with non-GAAP earnings between $3.45 per share and $3.60 per share (indicating 40% year-over-year growth at mid-point) despite headwind from forex. Fabrinet plans to offset most of the currency pressure through operating leverage and disciplined operating expenses, building on multi-quarter margin expansion.
Fabrinet’s pipeline adds multi-year optionality. In datacom, programs to build transceivers for hyperscalers directly and for merchant vendors are described as quarters away, not years, from meaningful revenues. In telecom/DCI, next-gen 800ZR has not yet ramped, preserving an additional catalyst as products move to production. Engagements in co-packaged optics with three customers and in optical circuit switching further extend the opportunity set, with timing explicitly tied to customer roadmaps. Coupled with a pure-play EMS model that avoids margin stacking and does not compete with customers' products, these developments should translate into new high-value programs that layer on top of fiscal 2026’s growth drivers.
FN ended the fiscal second quarter with about $961.5 million in cash and short-term investments and no debt, supporting expansion plans and financial flexibility.
The company also had $169 million remaining under its share repurchase authorization, providing an additional lever during periods of quarterly volatility.
However, Fabrinet’s P/E multiple is lower than Coherent’s 42.55X.
Fabrinet’s Valuation
Image Source: Zacks Investment Research
FN’s Earnings Estimate Revisions are Positive
The Zacks Consensus Estimate for the third quarter of fiscal 2026 earnings is currently pegged at $3.58 per share, up 3.5% over the past 30 days, and indicates 42.1% growth from the figure reported in the year-ago quarter.
The consensus mark for fiscal 2026 earnings is currently pegged at $13.58 per share, up 2.2% over the past 30 days, suggesting 33.5% growth from fiscal 2025’s reported figure.
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FN Jumps 25% in a Month: Is There More Room for the Stock to Grow?
Key Takeaways
Fabrinet (FN - Free Report) shares have jumped 24.9% in a month, driven by an accelerating Telecom and Datacenter Interconnect (DCI) revenues, easing datacom constraints and continued scaling in High-Performance Computing (HPC) business embedded in management’s fiscal third-quarter outlook.
The HPC program is scaling with added automation and credible execution, with optionality to gain share as a qualified second source. Fabrinet cites strong visibility, with sequential growth expected and catalysts ahead as DCI accelerates, next-gen 800ZR nears production and datacom constraints ease with second-source approvals.
In the second quarter of fiscal 2026, HPC contributed $85.6 million, and management expects the current program to exceed $150 million per quarter within the next couple of quarters, with double-digit sequential growth guided for the third quarter of fiscal 2026.
However, Fabrinet is facing stiff competition from the likes of Lumentum (LITE - Free Report) , Coherent (COHR - Free Report) and Jabil (JBL - Free Report) . In the trailing 12-month period, Fabrinet shares have jumped 179.5%, underperforming Lumentum’s and Coherent’s 919.4% and 288.5% increases, respectively. However, FN shares outperformed Jabil’s return of 77.7%.
FN Stock Performance
Image Source: Zacks Investment Research
Fabrinet Benefits From Strong Portfolio, Capacity Addition
Fabrinet’s record second-quarter fiscal 2026 revenues and earnings exceeded guidance on execution and leverage. FN delivered strong second-quarter fiscal 2026 non-GAAP earnings of $3.36 per share that beat the Zacks Consensus Estimate by 3.07%. Revenues of $1.13 billion surpassed the consensus mark by 5.03%. The figure jumped 36% year over year and 16% sequentially.
Third-quarter fiscal 2026 guidance indicates continued top-line growth (35% year-over-year growth at mid-point of $1.15-$1.2 billion range) with non-GAAP earnings between $3.45 per share and $3.60 per share (indicating 40% year-over-year growth at mid-point) despite headwind from forex. Fabrinet plans to offset most of the currency pressure through operating leverage and disciplined operating expenses, building on multi-quarter margin expansion.
Fabrinet’s pipeline adds multi-year optionality. In datacom, programs to build transceivers for hyperscalers directly and for merchant vendors are described as quarters away, not years, from meaningful revenues. In telecom/DCI, next-gen 800ZR has not yet ramped, preserving an additional catalyst as products move to production. Engagements in co-packaged optics with three customers and in optical circuit switching further extend the opportunity set, with timing explicitly tied to customer roadmaps. Coupled with a pure-play EMS model that avoids margin stacking and does not compete with customers' products, these developments should translate into new high-value programs that layer on top of fiscal 2026’s growth drivers.
Fabrinet Balance Sheet Strength Supports Flexibility
FN ended the fiscal second quarter with about $961.5 million in cash and short-term investments and no debt, supporting expansion plans and financial flexibility.
The company also had $169 million remaining under its share repurchase authorization, providing an additional lever during periods of quarterly volatility.
Fabrinet’s Strong Prospects Justify Premium Valuation
Fabrinet’s strong prospects, along with a debt-free balance sheet, justify a premium valuation, as suggested by the Value Score of F.
In terms of forward 12-month price/earnings (P/E), this Zacks Rank #2 (Buy) company is currently trading at 36.06X higher than the broader sector’s 24.58X and Jabil’s 20.32X. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
However, Fabrinet’s P/E multiple is lower than Coherent’s 42.55X.
Fabrinet’s Valuation
Image Source: Zacks Investment Research
FN’s Earnings Estimate Revisions are Positive
The Zacks Consensus Estimate for the third quarter of fiscal 2026 earnings is currently pegged at $3.58 per share, up 3.5% over the past 30 days, and indicates 42.1% growth from the figure reported in the year-ago quarter.
Fabrinet Price and Consensus
Fabrinet price-consensus-chart | Fabrinet Quote
The consensus mark for fiscal 2026 earnings is currently pegged at $13.58 per share, up 2.2% over the past 30 days, suggesting 33.5% growth from fiscal 2025’s reported figure.