What's the Risk of AAOI?

$Applied Optoelectronics(AAOI)$ risk to reward makes complete sense.

Here's why:

BULL CASE:

The bull case is a situation where management forecasts happen.

I.e. $471M/month in revenue by mid 2027 / $5.6B (likely more) in revenue by FY28.

$Lumentum(LITE)$ has a current sales multiple of 13x.

20% of $Applied Optoelectronics(AAOI)$ revenue is attributed to this segment so 20% * 13x = 2.6x sales.

Innolight and Eoptolink trade ~9x sales and this is where 80% of $Applied Optoelectronics(AAOI)$ revenue is likely to come from.

80% * 9x = 7.2x

Blended multiple = 9.8x sales

9.8x * $5.6B = $55B EV (5.5x from today).

And this excludes ELSFP potential revenue of $200M/month in FY28 onwards.

BEAR CASE:

Say management forecasts are way off. The projected ramp up is delayed and/or units per month is off by 50%.

Note 50% is a huge risking factor.

Let's take 50% of the potential $5.6B transceiver revenue meaning we have $2.8B in revenue (still 83% CAGR from FY25).

Let's also compress the 9.8x sales multiple I showed above by 50% to 4.9x (4.9x sales on 83% CAGR).

We then have an EV that will come out ~$13.7B.

That likely loses out to the market over the next 2-3 years but imo that seems like ab absolute base case and it's still higher than the EV today.

Fair?