FN Gears Up to Report Q4 Earnings: What's in Store for the Stock?

For the fourth quarter of fiscal 2026, the Zacks Consensus Estimate for earnings is pegged at $3.85 per share, up a couple of cents over the past 30 days, suggesting a year-over-year increase of 45.28%. 

The Zacks Consensus Estimate for fourth-quarter fiscal 2026 revenues is pegged at $1.28 billion, indicating a 40.93% year-over-year increase.

FN beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters, with the average surprise being 2.64%. 

Let us see how things have shaped up for the upcoming announcement.

Factors to Note

Fabrinet's fiscal fourth-quarter performance is expected to have benefited from robust demand across its core business segments, particularly in Optical Communications and high-performance compute (HPC) programs. The company anticipates revenue growth in all major product categories, even as it navigates ongoing supply constraints. 

The quarterly performance is likely to have been aided by continued strength in Telecom and data center interconnect (DCI). In the fiscal third quarter, Telecom revenues increased 55% year over year to $628 million, while DCI revenues surged 90% year over year and 38% sequentially to $197 million. DCI demand remains strong, with Fabrinet continuing to win business and ramp existing and new programs. The ongoing ramp of 800ZR products could provide additional support to Telecom growth in the to-be-reported quarter.

New Datacom opportunities are another growth driver for the fourth quarter of fiscal 2026. Fabrinet completed qualification and began shipping two 800G scale-out transceiver programs directly to a hyperscale customer, with the initial ramp starting in the fiscal fourth quarter and volumes expected to increase throughout fiscal 2027. The company is progressing with multiple merchant transceiver programs, which are expected to diversify its Datacom revenues and provide additional growth opportunities over time.

High-performance computing and broader non-optical communications growth are also expected to support the to-be-reported quarter. HPC revenues reached $107 million in the fiscal third quarter, up 25% sequentially, with continued growth expected as customers transition to newer product generations and add programs. Non-optical communications revenues increased 52% year over year, supported by HPC, new program wins and expanded manufacturing scope. Industrial Laser revenues increased 9% year over year and 7% sequentially, with additional growth opportunities and new business wins providing further support. 

However, component and material shortages, including constraints involving lasers, memory and certain ASICs, are expected to have persisted in the fiscal fourth quarter. Foreign exchange headwinds and new-program ramp inefficiencies might have dampened gross margins.

What Our Model Says About FN

According to the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that is not the exact case here.  

Fabrinet currently has an Earnings ESP of +1.39% and a Zacks Rank #4 (Sell). You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Stocks to Consider

Here are some companies worth considering, as our model shows that these have the right combination of elements to beat on earnings in their upcoming releases.

NVIDIA NVDA has an Earnings ESP of +0.52% and a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

NVIDIA shares have gained 20.8% in the year-to-date period. NVDA is set to report second-quarter fiscal 2027 results on Aug. 26. 

Analog Devices ADI has an Earnings ESP of +2.37% and a Zacks Rank #2 at present.

Analog Devices shares have gained 40.6% in the year-to-date period. ADI is scheduled to report its third-quarter fiscal 2026 results on Aug. 19.

OSI Systems OSIS has an Earnings ESP of +1.86% and a Zacks Rank #2.

Shares of OSI Systems have declined 10.4% in the year-to-date period. OSIS is set to report its fourth-quarter fiscal 2026 results on Aug. 20.

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This article originally published on Zacks Investment Research (zacks.com).

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