Shares of Fabrinet (NYSE:FN) tanked in early trading on Tuesday, even after the company reported upbeat fiscal third-quarter results.



Here are the key analyst insights:



<ul>
<li>Rosenblatt Securities analyst Mike Genovese maintained a Buy rating, while raising the price target from $715 to $750.</li>



<li>Needham analyst Ryan Koontz reaffirmed a Buy rating and price target of $800.</li>
</ul>



Check out other analyst stock ratings.



Rosenblatt Securities: Fabrinet's revenues grew 39% year-on-year to $1.21 billion. Earnings grew 47.4% to a record high of $3.72 per share. It beat the consensus estimate of $3.56 by 4.49%, according to Benzinga Pro data. 



Revenues were driven by Telecom sales, which grew 55% year-on-year to $628 million, he added.



NVIDIA Corp (NASDAQ:NVDA), or the Datacom segment, revenue contracted by 6% sequentially and grew by only 4% year-on-year to $260 million. Gross margins contracting by 30 basis points (bps) quarter-on-quarter, Genovese said. 



&#34;We are upbeat on FN’s Datacom sales even though we do not view NVIDIA as a growth driver,&#34; he added



Needham: While Fabrinet's revenue of $1.21 billion came in higher than consensus of $1.19 billion, non-GAAP gross margins of 12.1% missed expectations due to currency headwinds, Koontz said. Telecom revenues, which contribute more than 50% of the company's total revenues, grew 55% year-on-year and 13% sequentially to $628 million, driven by DCI's growth accelerating to 90%, he added.



Management guided to revenues of $1.25-$1.29 billion for the fourth quarter of fiscal 2026, representing 40% year-on-year growth and coming above consensus of $1.26 billion at the midpoint, while earnings guidance of $3.72 $3.87 per share was in-line with expectations, the analyst stated. Management noted several new design wins for Datacom, &#34;with most ramping over C26 and into C27,&#34; he further wrote.



FN Price Action: Shares of Fabrinet had declined by 5.88% to $675.97 at the time of publication on Tuesday.



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Fabrinet (NYSE:FN) reported a record Q3 with revenues up 39% to $1.21 billion, driven by Telecom sales. Despite beating earnings estimates, the stock fell 5.88% as analysts noted concerns over Datacom sales and gross margin misses. Rosenblatt Securities maintained a Buy rating, raising the price target to $750, while Needham reaffirmed a Buy with a target of $800. Management guided for Q4 revenues of $1.25-$1.29 billion, indicating strong growth ahead.

- Shares of Fabrinet (NYSE:FN) fell 5.88% despite reporting strong fiscal third-quarter results, with revenues increasing 39% year-on-year to $1.21 billion and earnings rising 47.4% to $3.72 per share.  
- Analysts from Rosenblatt Securities and Needham maintained Buy ratings, raising price targets to $750 and reaffirming $800, respectively, highlighting strong Telecom sales growth of 55% year-on-year.  
- Management's guidance for fourth-quarter revenues is between $1.25 and $1.29 billion, indicating a 40% year-on-year growth, exceeding analyst expectations.

Fabrinet Posts Record Q3, But Don't Thank Nvidia: Analyst