Fabrinet Wows Wall Street, But Shares Slide On Mixed Outlook

Fabrinet (NYSE:FN) shares are trading lower on Tuesday after it reported third-quarter FY25 results on Monday.

Revenue was $871.8 million, beating the consensus of $856.62 million. Adjusted EPS of $2.52 exceeded the consensus of $2.49.

Fabrinet CEO Seamus Grady said, “We delivered another strong telecom performance with growth that more than offset an anticipated sequential decline in datacom revenue. Our team continued to execute very well, producing non-GAAP EPS that also exceeded our guidance.”

”Looking ahead, we remain optimistic and confident in our ability to deliver strong execution in the fourth quarter and into fiscal 2026.”

As of March 28, cash and cash equivalents stood at $306.9 million.

Outlook: Fabrinet expects fourth-quarter FY25 revenue of $860 million – $900 million, surpassing the street view of $888.62 million.

The company also projects fourth-quarter adjusted EPS of $2.50-$2.70 vs. the street view of $2.69.

Rosenblatt analyst Mike Genovese raised the price forecast from $230 to $250, while retaining a Buy rating.

The analyst says that Fabrinet’s outlook in the Telecom sector has become increasingly attractive, and expects Telecom revenue to continue its sequential growth trajectory as both Data Center Interconnect (DCI) and traditional Telecommunications markets rebound.

Also, Genovese writes that Fabrinet is poised to benefit from contract wins with major players like Cisco, Infinera, and Ciena. Simultaneously, investors might observe a less robust performance in the Datacom segment. That may not come as a significant surprise, adds the analyst.

The analyst revised EPS estimates to $10.15 (from $10.17) for 2025 and reiterated FY26 estimates at $11.20.

Investors can gain exposure to the stock via Janus Henderson Small/Mid Cap Growth Alpha ETF (NASDAQ:JSMD) and Principal U.S. Small-Cap ETF (NASDAQ:PSC).

Price Action: FN shares are down 7.18% at $205.03 at the last check on Tuesday.

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