Report
Valens Research

FN - Embedded Expectations Analysis - 2019 02 28

Fabrinet (FN:USA) currently trades below corporate averages relative to UAFRS-based (Uniform) Earnings, with a 12.7x Uniform P/E. At these levels, the market has bearish expectations for the firm, and management has concerns about construction plans, free cash flows, and Israeli operations

Specifically, management may be concerned about their Chonburi building construction and optical system synergies. Additionally, management may be concerned about their ability to sustain free cash flows, manage compensation and amortization expenses, and initiate share buybacks. Finally, management may be concerned about weakness in some of their product lines and may be exaggerating their progress in expanding Israeli operations
Underlying
Fabrinet

Provider
Valens Research
Valens Research

In 2009, just as the dust was settling from the last major equity and credit market crises, we launched a boutique research firm with the intention of breaking Wall Street’s biases and broken incentives:

  • GAAP and IFRS have failed to provide rules for reliable financial statement reporting
  • Stock analyst recommendations are not grounded in disciplined financial analysis
  • Credit agencies have been set up to grossly fail in their responsibilities to investors and the public markets
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We sought to provide investors and company analysts with a source of information that changed all that.
Many years later, our business model remains because little has changed on Wall Street.

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