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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. Optical Cable Corporation's Q3 2025 Earnings: A Strong Performance

The company's Q3 2025 financial performance was robust, with net sales growing 22.8% QoQ and 12.8% YoY to $19.9 million. Gross margin expanded to 31.7% from 24.2% in Q3 2024, driven by higher volumes and operating leverage. Earnings per share (EPS) improved to $0.04 compared to a loss of $0.20 in Q3 2024. The actual EPS came out at $0.06 relative to estimates at $0.01.

Publication Date: Sep -13

📋 Highlights
  • Net Sales Growth: Increased by 22.8% YoY to $19.9M in Q3 2025, driven by robust demand in enterprise and specialty markets.
  • Gross Profit Expansion: Gross margin rose to 61.2% in Q3, up from 24.2% YoY, reflecting operational leverage and higher sales volumes.
  • Strategic Collaboration: Lightera invested 7.24% in OCC, enhancing product integration in enterprise/data center markets and boosting global market access.
  • Backlog & Capacity: $7.1M backlog as of July 31, with 50% capacity utilization and no immediate need for expansion due to flexible staffing.
  • Cost Efficiency: SG&A expenses decreased to 28.8% of sales (from 32.3% YoY), supporting net income of $0.04/share (vs. $0.20 loss in Q3 2024).

Financial Highlights

The company's gross profit expansion was a key highlight, with a 61.2% increase driven by higher sales and product mix. SG&A expenses were 28.8% of sales, down from 32.3% YoY, reflecting operational efficiency. The net income improvement was significant, driven by the strong top-line growth and margin expansion.

Valuation Metrics

With a P/E Ratio of -72.73, P/B Ratio of 3.83, and P/S Ratio of 1.11, the market seems to be pricing in a challenging growth trajectory. The EV/EBITDA ratio of 104.89 suggests a high enterprise value relative to earnings. The company's ROE and ROIC are negative, indicating potential operational challenges. The Net Debt / EBITDA ratio of 2.74 highlights the company's debt position relative to its earnings.

Operational Insights

The company's capacity utilization is around 50%, with management opting for flexible staffing rather than 24/7 operations. This strategic decision allows for cost management and adaptability to changing demand. The partnership with Lightera is expected to drive new production volume and market opportunities, leveraging their global expertise and OCC's Tier 2/3 data center focus.

Outlook and Strategy

Despite seasonal softness expected in Q1 and Q2, the company remains optimistic about its trajectory, driven by industry recovery and its strong position in data center activity and specialty markets. The strategic partnership with Lightera is a key growth driver, and the company is updating its website to better highlight data center products. Management is confident in current operations and partnerships, with a focus on disciplined execution and growth through partnerships.

3. NewsRoom

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Orthocell secures A$30 million placement to accelerate US rollout of Remplir

Oct -17

Source: proactiveinvestors.com

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Optical Cable Corporation (OCC) Q3 2025 Earnings Call Transcript

Sep -11

Source: seekingalpha.com

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OPTICAL CABLE CORPORATION REPORTS THIRD QUARTER OF FISCAL YEAR 2025 FINANCIAL RESULTS

Sep -11

Source: prnewswire.com

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Optical Cable Corporation: A Company-Changing Strategic Collaboration And New AI Beneficiary

Jul -11

Source: seekingalpha.com

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OPTICAL CABLE CORPORATION AND LIGHTERA, LLC ANNOUNCE STRATEGIC COLLABORATION

Jul -07

Source: prnewswire.com

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Optical Cable Corporation (OCC) Q2 2025 Earnings Call Transcript

Jun -06

Source: seekingalpha.com

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OCC Approves PSO's Acquisition of Green Country Plant, Powering Oklahoma's Energy Needs

Jun -05

Source: prnewswire.com

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OPTICAL CABLE CORPORATION SCHEDULES CONFERENCE CALL TO DISCUSS SECOND QUARTER OF FISCAL YEAR 2025 RESULTS

Jun -03

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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Quality: 8.1

Yield: 1.0

Momentum: 10.0

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A-Score: 3.9/10

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Minim

A-Score: 3.6/10

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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

8.05$

Current Price

8.05$

Potential

-0.00%

Expected Cash-Flows