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1. Company Snapshot

1.a. Company Description

Optical Cable Corporation, together with its subsidiaries, manufactures and sells fiber optic and copper data communications cabling and connectivity solutions primarily for the enterprise market in the United States and internationally.The company provides fiber optic and hybrid cables for high bandwidth transmission of data, video, and voice communications; and copper datacom cables, including unshielded and shielded twisted pair constructions.Its fiber optic connectivity products include fiber optic wall mounts, cabinet mount and rack mount enclosures, pre-terminated fiber optic enclosures, fiber optic connectors, splice trays, fiber optic jumpers, plug and play cassette modules, pre-terminated fiber optic cable assemblies, adapters, and accessories; and copper connectivity products comprising category compliant patch panels, jacks, plugs, patch cords, faceplates, surface mounted boxes, distribution and multi-media boxes, copper rack mount and wall mount enclosures, cable assemblies, cable organizers, and other wiring products for equipment rooms, telecommunications closets, data centers, and workstation applications.


In addition, it offers network, data storage, and telecommunications management systems, such as data cabinets, wall mount enclosures, horizontal and vertical cable management systems, and open frame relay racks for enterprise and residential use; and datacom wiring products, including various enclosures, and modules and modular outlets for single dwelling and multiple dwelling residential uses.Further, the company provides specialty fiber optic connectors and connectivity components, copper datacom connectors, and related systems and solutions for military, other harsh environment, and special applications.It sells its products to distributors, original equipment manufacturers, value-added resellers, and end-users.


Optical Cable Corporation was incorporated in 1983 and is headquartered in Roanoke, Virginia.

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1.b. Last Insights on OCC

Optical Cable Corporation's recent performance was negatively impacted by the termination of its 2021 loss mitigation consent order by the Office of the Comptroller of the Currency (OCC). This development may have created uncertainty and potential regulatory scrutiny for the company. Additionally, the lack of significant new product launches or acquisitions in the past quarter may have contributed to a lack of momentum in the company's growth. Furthermore, the company's first quarter fiscal year 2025 financial results, while showing an increase in net sales and gross profit, may not have been sufficient to offset these negative factors.

1.c. Company Highlights

2. OCC's Fiscal Year 2025: A Year of Solid Growth and Strategic Collaboration

Optical Cable Corporation's (OCC) fiscal year 2025 was marked by a 9.5% increase in consolidated net sales to $73 million, driven by growth in both enterprise and specialty markets. Gross profit grew 24.1% to $22.6 million, and gross profit margin expanded to 30.9% from 27.3% in fiscal year 2024. The company reported a net loss of $1.5 million or $0.18 per basic and diluted share for fiscal year 2025, an improvement from the net loss of $4.2 million or $0.54 per basic and diluted share in fiscal year 2024. In the fourth quarter, OCC recorded a net loss, with a gross profit margin of 31.9%, slightly lower than the 33.5% in the same period last year. Actual EPS for the year was -$0.18, significantly worse than estimates, but the company is optimistic about growth opportunities in fiscal year 2026.

Publication Date: Dec -23

📋 Highlights
  • Net Sales Growth: FY2025 consolidated net sales rose 9.5% to $73M, driven by enterprise and specialty market expansion.
  • Gross Profit Margin Expansion: Increased to 30.9% (from 27.3%), with gross profit up 24.1% to $22.6M.
  • Strategic Collaboration Impact: Partnership with Lightera, now holding 7.24% ownership, targets FY2026 top-line growth.
  • Net Loss Improvement: Fiscal 2025 net loss narrowed to $1.5M ($0.18/share) vs. $4.2M ($0.54/share) in FY2024.

Operational Highlights and Future Prospects

OCC's manufacturing operating leverage and SG&A operating leverage are expected to positively impact efficiency and profitability as net sales increase. The company's strategic collaboration with Lightera, established in July, is progressing well and is expected to drive top-line growth in fiscal year 2026 and beyond. According to Neil Wilkin, OCC's capacity to capture growth opportunities in fiscal year 2026 is not a concern, with the company having hired personnel, mostly in manufacturing, to support growth without a significant increase in operating expenses.

Valuation and Growth Expectations

OCC's current valuation metrics indicate a 'P/E Ratio' of -28.3, a 'P/S Ratio' of 0.51, and an 'EV/EBITDA' of 209.83, suggesting that the market is pricing in significant growth expectations. With the company's strategic collaboration with Lightera and its focus on the data center market, OCC is poised for growth in fiscal year 2026. Analysts' estimates for next year's revenue growth are not available, but the company's guidance suggests a positive outlook.

Seasonality and Market Trends

OCC typically experiences growth in the second half of the year, with 54% of total sales in the second half of fiscal year 2025, consistent with the previous year. The company did not experience significant project delays or pushouts impacting the fourth quarter. The collaboration with Lightera is expected to positively impact OCC's top line in 2026, although specifics on timing or revenue contribution are limited due to the proprietary nature of the plans.

3. NewsRoom

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Clearstead Advisors LLC Decreases Stake in Optical Cable Corporation $OCC

Mar -01

Source: defenseworld.net

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Optical Cable (NASDAQ:OCC) Stock Price Crosses Below Two Hundred Day Moving Average – Time to Sell?

Jan -20

Source: defenseworld.net

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Huntington Secures OCC Regulatory Green Light for Cadence Merger

Dec -23

Source: zacks.com

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OCC Lifts Oversight on Citigroup: Catalyst for Transformation Drive?

Dec -22

Source: zacks.com

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OCC Reduces Regulatory Mandate Covering Citi's Risk Management Systems

Dec -18

Source: pymnts.com

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Optical Cable Corporation (OCC) Q4 2025 Earnings Call Transcript

Dec -18

Source: seekingalpha.com

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BitGo Bank & Trust Powers Trusted Digital Asset Solutions Across All 50 States with OCC License

Dec -18

Source: businesswire.com

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OPTICAL CABLE CORPORATION REPORTS FOURTH QUARTER AND FISCAL YEAR 2025 FINANCIAL RESULTS

Dec -18

Source: prnewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (10.30%)

6. Segments

Fiber Optic and Copper Data Communication Cabling and Connectivity Solutions

Expected Growth: 10.3%

Growing demand for high-speed data transmission, increasing adoption of fiber optic cables in 5G networks, and rising need for reliable connectivity in data centers and cloud infrastructure are driving the growth of the fiber optic and copper data communication cabling market.

7. Detailed Products

Fiber Optic Cables

Optical Cable Corporation's fiber optic cables are designed for high-speed data transmission and are used in various applications such as telecommunications, data centers, and cable television.

Composite Cables

Composite cables combine fiber optic and copper cables in a single cable, providing a hybrid solution for power and data transmission.

Fiber Optic Connectors

Optical Cable Corporation's fiber optic connectors are designed for easy installation and provide a secure connection for fiber optic cables.

Cable Assemblies

Cable assemblies are custom-built cables designed for specific applications, providing a complete solution for data transmission and power distribution.

Fiber Optic Splices

Fiber optic splices are used to join two fiber optic cables together, providing a strong and reliable connection.

Fiber Optic Test Equipment

Optical Cable Corporation's fiber optic test equipment is designed for testing and troubleshooting fiber optic cables and networks.

8. Optical Cable Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Optical Cable Corporation is medium because while there are some alternatives to fiber optic cables, they are not yet widely adopted and are often more expensive.

Bargaining Power Of Customers

The bargaining power of customers for Optical Cable Corporation is low because the company has a diverse customer base and no single customer accounts for a large percentage of revenue.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Optical Cable Corporation is medium because while there are some suppliers of raw materials that have significant market power, the company has diversified its supply chain to mitigate this risk.

Threat Of New Entrants

The threat of new entrants for Optical Cable Corporation is low because the company has significant barriers to entry, including high capital costs and regulatory hurdles.

Intensity Of Rivalry

The intensity of rivalry for Optical Cable Corporation is high because the company operates in a highly competitive industry with several established players.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 30.79%
Debt Cost 6.41%
Equity Weight 69.21%
Equity Cost 6.41%
WACC 6.41%
Leverage 44.49%

11. Quality Control: Optical Cable Corporation passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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BK Technologies

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Value: 3.3

Growth: 7.9

Quality: 8.2

Yield: 1.0

Momentum: 10.0

Volatility: 1.3

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Optical Cable

A-Score: 4.4/10

Value: 6.7

Growth: 4.3

Quality: 4.7

Yield: 0.0

Momentum: 10.0

Volatility: 0.7

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A-Score: 4.2/10

Value: 6.2

Growth: 2.9

Quality: 4.3

Yield: 0.0

Momentum: 10.0

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Value: 7.2

Growth: 4.1

Quality: 2.2

Yield: 0.0

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Volatility: 5.0

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A-Score: 4.0/10

Value: 1.1

Growth: 3.9

Quality: 4.8

Yield: 0.0

Momentum: 9.5

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Airgain

A-Score: 3.1/10

Value: 8.7

Growth: 2.3

Quality: 4.5

Yield: 0.0

Momentum: 0.5

Volatility: 2.7

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

6.24$

Current Price

6.25$

Potential

-0.00%

Expected Cash-Flows