Fabrinet (FN): fair value, margin of safety and Wheel Score

Is FN undervalued?

FN closed at 341.64 on 5 Nov 2026, which is 12% above the GLS average fair value of 304.50 from 7 models. 5 of them value the shares below today's price. Our scans read that as "no margin of safety": the stock is not a value candidate at this price, whatever the quality numbers say.

The 7 models disagree widely: 10 Cap gives 12.09 while GLS Growth gives 708.49. A spread that wide means the average is sensitive to which methods you trust; the model table below shows where each one lands, and the Quote page lets you switch any of them off.

Ranked against every other company we cover, FN is clearly faster-growing than it is cheap, so the nightly engine files it under Growth (value score 25, growth score 78, out of 100).

Nine valuation models for FN

Each model turns the latest filed numbers into a value per share; the GLS fair value is the simple average of the ones that produce a positive number. The last two rows are shown for reference and never enter the average. The Quote page lets you switch any model off and add your own margin of safety.

Quality and financial health

Financial health is weak: FN passes 4 of the nine Piotroski tests. Our scans drop the stock at the health filter; a low score is often the reason a stock looks cheap on the valuation models. The GLS Moat score is 7.7 out of 10 - high returns on capital, steady margins and growth that held up through bad years point to a durable business.

Returns on capital are high - ROIC 19.2%, ROE 19.3%, ROA 12.1% - with debt at 0.00 times equity and negative free cash flow.

Fabrinet pays no dividend, so the DDM model does not apply and a covered-call holder earns only the premium and any price gain. Revenue comes mainly from Optical Communications 73%, Non Optical Communications 27% (quarter Q3 FY2026).

Institutional ownership scores 10/10, insider activity 1/10 and Congressional trading 1/10 on the GLS smart-money scales.

Wheel Score 37: Weak

FN scores 37 out of 100 on the Wheel Score, in the Weak band (under 50): it fails filter 3, below fair value - trades 12% above our fair value; and filter 4, financially healthy - Piotroski 4/9 (under 6), and the parts are thin too - value weak, premium strong, moat good, health fair, red flags strong, option trading fair, stability good. The score is not a judgement on the company; it says the price, quality and premium do not line up for selling puts on it today.

Implied volatility is 68% on the near-the-money contracts 20-60 days out - above the 60% top of the sweet spot. It still passes the 25-80% filter, but the Wheel Score rewards it less because volatility this high usually comes with a reason. Chain open interest is 14,042 contracts across all expiries - enough for the wheel at normal size.

Volume runs at 1.6M shares a day on a market cap of $12.2B, with a beta of 1.34 - a high beta, so the stock tends to move more than the market and a strike can be gapped through; the Stability part of the Wheel Score rates that good.

The Wheel Score ranks ~7,400 US stocks for selling cash-secured puts and covered calls: a stock must pass all 9 Wheel Trade Filters to score 70, and the score then ranks the ones that pass; the Sunday Scan is the top 10. It is updated nightly and is not a recommendation. How the Wheel Score works · the walkthrough lesson shows how it fits into a trade, start to finish.

Upcoming events

The next earnings report is due on 1 Feb 2027, 88 days away - outside the window of a 30-45-day put sold today.

No analyst upgrades or downgrades were recorded in the last 30 days.

Earnings, dividend, IPO, split and economic calendars for the whole market, filterable to your watchlists.

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