FN · Technology(telephone & telegraph apparatus) · 10 years of annual accounts filed with the SEC · latest fiscal year ended 2026-06-26
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Fabrinet reported revenue of $4.6 billion in fiscal 2026, after growing 14.5% a year over the previous 9 years. Its operating margin widened from 6.8% in 2018 to 10.0%. Of the $1.9 billion its operations generated over 10 years, 37.6% went back into the business and 19.3% to buybacks; the share count fell 4.7%. On the accounting screens, it passes 4 of 8 Piotroski tests, its Altman Z'' of 7.65 is in the safe zone and its Beneish M-score is above the -1.78 line; 2 of the six cross-checks between its statements fire.
Revenue, fiscal 20264.6B+14.5% a year over 9 years
Operating margin10.0%gross margin 12.0%
Return on invested capital—15.6% on average over 3 years
Free cash flow after stock pay-30.4M-0.7% of revenue
Net debt ÷ EBITDA—net debt —
Piotroski F-score4/8tests of improvement passed
Is it growing?
Revenue and the operating income it turns into. Growth that does not reach operating income is growth bought with margin.
RevenueOperating income
02.0B4.0B6.0B
2018Revenue 1.4BOperating income 93.8M
2018
2019Revenue 1.6BOperating income 122.6M
2020Revenue 1.6BOperating income 117.4M
2021Revenue 1.9BOperating income 150.8M
2022Revenue 2.3BOperating income 204.5M
2023Revenue 2.6BOperating income 251.7M
2024Revenue 2.9BOperating income 277.6M
2025Revenue 3.4BOperating income 324.4M
2026Revenue 4.6BOperating income 462.9M
2018201820192020202120222023202420252026
Compound growth a year
3 yrs
5 yrs
9 yrs
Revenue
+20.6%
+19.8%
+14.5%
Operating income
+22.5%
+25.2%
+19.4%
Net income
+24.0%
+26.1%
+21.1%
Earnings per share
+24.7%
+27.0%
+21.8%
Free cash flow per share
-69.5%
-43.5%
-29.6%
Shares
-0.5%
-0.7%
-0.5%
Falling shares are buybacks: each remaining share owns more of the company.
Does it earn more than its capital costs?
Margins say how much of each sale is kept; return on invested capital says how much the business earns on the money it needs to operate. Growth only creates value when that return is above the cost of the capital.
Needs a cost of capital, which comes from the valuation below.
Return on equity
19.3%
Return on assets
12.1%
Asset turnover
1.19×
Overheads (SG&A)
2.0% of revenue
Is the profit cash, and where does the cash go?
Net income is an accounting opinion; free cash flow is what was left in the bank after investing. Stock-based pay does not leave the bank — shareholders pay it through dilution — so it is shown taken off as well.
Net incomeFree cash flowAfter stock-based pay
-200.0M0200.0M400.0M600.0M
2018Net income 84.2MFree cash flow 104.3MAfter stock-based pay 81.7M
2018
2019Net income 121.0MFree cash flow 128.7MAfter stock-based pay 111.6M
2020Net income 113.5MFree cash flow 108.3MAfter stock-based pay 86.1M
2021Net income 148.3MFree cash flow 76.1MAfter stock-based pay 50.6M
2022Net income 200.4MFree cash flow 34.7MAfter stock-based pay 6.6M
2023Net income 247.9MFree cash flow 151.9MAfter stock-based pay 123.8M
2024Net income 296.2MFree cash flow 365.6MAfter stock-based pay 337.2M
2025Net income 332.5MFree cash flow 207.3MAfter stock-based pay 174.3M
2026Net income 473.0MFree cash flow 4.2MAfter stock-based pay -30.4M
2018201820192020202120222023202420252026
Where 10 years of operating cash went, 2018–2026
1.9B generated by the business. Each band is its share of that total.
Reinvested in the business 38%712.9M
Acquisitions 0%0
Dividends 0%0
Share buybacks 19%365.3M
Kept, or used to pay down debt 43%815.9M
Over the same years it paid 239.6M in stock. The share count fell 4.7%. 125.7M of the buybacks went beyond offsetting that dilution.
Per share
Earnings per shareFree cash flow per shareDividend per share
$0.00$5.00$10.00$15.00
2018Earnings per share $2.21Free cash flow per share $2.74
2018
2019Earnings per share $3.23Free cash flow per share $3.44
2020Earnings per share $3.01Free cash flow per share $2.88
2021Earnings per share $3.95Free cash flow per share $2.03
2022Earnings per share $5.36Free cash flow per share $0.93
2023Earnings per share $6.73Free cash flow per share $4.12
2024Earnings per share $8.10Free cash flow per share $10.00
2025Earnings per share $9.17Free cash flow per share $5.72
2026Earnings per share $13.05Free cash flow per share $0.12
2018201820192020202120222023202420252026
Shares outstanding
Diluted shares
36.0M36.5M37.0M37.5M38.0M38.5M
2018Diluted shares 38.0M
2018
2019Diluted shares 37.4M
2020Diluted shares 37.7M
2021Diluted shares 37.6M
2022Diluted shares 37.4M
2023Diluted shares 36.9M
2024Diluted shares 36.6M
2025Diluted shares 36.3M
2026Diluted shares 36.3M
2018201820192020202120222023202420252026
How strong is the balance sheet?
Debt is not bad in itself; debt the business cannot service in a bad year is. Net debt is debt minus cash, and below zero the company holds more cash than it owes.
Net debt
-600.0M-400.0M-200.0M0
2018Net debt -154.9M
2018
2019Net debt -119.9M
2020Net debt -173.8M
2021Net debt -263.5M
2022Net debt -170.6M
2023Net debt -219.2M
2024Net debt -410.0M
2025
2026
2018201820192020202120222023202420252026
Net debt ÷ EBITDA
—
Interest coverage
5511× operating income ÷ interest
Current ratio
2.25 current assets ÷ current liabilities
Cash conversion cycle
— collects in 80d
Three classic screens of the accounts
Each asks a different question of the same statements — is it improving, does it look like a company heading for distress, do the accounts resemble ones that were manipulated. None is a verdict; each shows what moves it.
Piotroski F-score
Is the business improving? Nine yes-or-no tests, this year against last.
4of 8 tests passed
✓ProfitableReturn on assets above zeropassed
✓Cash from operationsOperating cash flow above zeropassed
✓Profitability improvedReturn on assets higher than a year beforepassed
✕Profit backed by cashOperating cash flow above net income (low accruals)failed
–Less long-term debtLong-term debt as a share of assets fell — not reportedno data
✕More liquidCurrent ratio higher than a year beforefailed
✓No new sharesShare count did not growpassed
✕Better gross marginGross margin higher than a year beforefailed
✕Sells more per assetAsset turnover higher than a year beforefailed
Where it misleads: it measures change, not level. An excellent business that stood still for a year scores low; a poor one recovering from a disaster scores high.
Altman Z''-score
Does the balance sheet look like those of companies that went bankrupt?
7.65safe zone
1.12.6
Working capital ÷ assets 0.45 × 6.56+2.95
Retained earnings ÷ assets 0.66 × 3.26+2.14
Operating income ÷ assets 0.12 × 6.72+0.80
Equity ÷ liabilities 1.68 × 1.05+1.77
Where it misleads: buybacks. A company that returns so much cash that its equity turns small or negative sinks the last two ratios without being anywhere near bankruptcy. Banks and insurers do not fit the model at all.
Beneish M-score
Do the accounts resemble those of companies that manipulated their earnings?
-0.52above the -1.78 line
-1.78
Receivables vs sales 0.99+0.91
Gross margin slipping 1.01+0.53
Soft assets 4.49+1.81
Sales growth 1.36+1.21
Slower depreciation 1.23+0.14
Overheads vs sales 0.79-0.14
Profit not in cash 0.06+0.26
Leverage rising 1.25-0.41
Where it misleads: fast growth and acquisitions. Sales growth carries a heavy weight, so a company growing 50% a year scores like a suspect without having done anything. It is a screen from a 1999 study, not an accusation.
Where the statements disagree
Cross-checks between the income statement, the balance sheet and the cash flow for the latest year, each with the benign reading and the worrying one.
Inventory is growing 76% against revenue growing 36%.
Benign
Stocking up for a launch, or securing supply.
Worrying
Demand is softening; discounts or write-downs tend to follow.
Reported profit comfortably exceeds the cash generated (473M against 257M).
Benign
Growth consuming working capital, or the seasonality of the year-end.
Worrying
Profit held up by accounting entries that do not turn into money.
What is it worth, under which assumptions?
A company is worth the cash it will generate, brought back to today. This model projects revenue with growth that fades over the years, applies a free cash flow margin, and discounts the result at the cost of capital. Every assumption says where it came from, and all of them can be changed.
With a free cash flow margin at or below zero in year ten, the business never generates cash for its owners and a DCF says nothing useful. Set a positive margin for year ten to see what it would take.
What it has filed lately
The last twelve months at the SEC, most important first: annual and quarterly reports, events, large holders and insiders.
Every Form 4 filed in the last twelve months, read line by line: 6 filings by 4 people. Open-market purchases and sales are counted apart from awards, option exercises and shares withheld for taxes.
Bought on the open market—none in the period
Sold on the open market$964,7652 sale(s) by 1 insider(s)
Under pre-arranged plans0%of the sales followed a 10b5-1 plan set months earlier
A Form 4 says what happened, when, how many shares and at what price. It does not say why: a sale can be diversification, a tax bill or a plan fixed months earlier, and an award is pay, not a purchase. Nothing here is a reason to buy or sell anything.
Which large funds report holding it
From the Form 13F of the 28 institutions followed on this site, as of the end of their last reported quarter. A 13F is filed up to 45 days later and shows only long positions in US-listed shares.
Accounts from the company's own SEC filings; lines some companies do not report are shown as a dash rather than estimated. The risk-free rate is the 10-year US Treasury yield. A DCF is a way of making assumptions explicit, not a forecast: it states what the company would be worth if the assumptions held. The scores are screens that point where to look, not verdicts. Nothing here is a recommendation to buy or sell.
