While quarterly revenue growth looked good in Q2 2019, NeoPhotonics (NPTN) could not convince B. Riley (RILY), which decided to diminish the stock. We agree with the investment bank. In our view, the company’s lack of profitability is a big issue. Other competitors report significant EBITDA figures. Besides, we see that Sino-US trade negotiations could destroy the company’s relationship with its major client, Huawei. The company seems to be a sell.
Business Model
Founded in 1996, NeoPhotonics manufactures and markets optoelectronic products for communication networks.
Source: Company Website
Thanks to the company’s Advanced