Bear Notes Follow Finisar's Soft Quarter

Most analysts are actually bullish on the Apple supplier

by Josh Selway

Published on Mar 9, 2018 at 10:23 AM
Updated on Jun 24, 2020 at 10:16 AM

Fiber optics stock Finisar Corporation (NASDAQ:FNSR) has slumped 11.2% out of the gate to trade at $17.95, after the company's fiscal third-quarter earnings report failed to meet expectations. Earnings and revenue for the period both missed estimates, and the company's current-quarter forecast was also lower than expected. As a result, a number of analysts are trimming their outlooks on FNSR shares.

At least four price-target cuts have come through this morning, with the lowest of $20 coming from Raymond James. Meanwhile, Morgan Stanley initiated coverage with an "equal weight" rating and $21 price target. Most analysts were bullish on Finisar coming into today, with eight of 11 saying it's a "buy," suggesting there's potential for more bear notes should the stock fail to recover from today's weakness.

There are plenty of bears surrounding FNSR, too. For instance, short interest represents 11% of the stock's float, and it would take short sellers a week to cover their positions, based on average daily volumes. Today, however, the stock is on the short-sale restricted list.

Given Finisar's long-term technical performance, the bearish bias seems to make more sense. The shares have been in a channel of lower highs and lows since early 2017, shedding almost half their value over the past year, with their 160-day and 200-day moving averages thwarting almost every breakout attempt along the way.


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