Fabrinet (FN) Fundamental Checkup
Fabrinet fundamental checkup using revenue growth, EPS growth, free cash flow, margins, ROIC, debt-to-equity, and TGMCharts chart exhibits as of September 17, 2026.
By TGMCharts Research · Data as of · Updated
A comprehensive analysis of Fabrinet reveals robust top-line expansion with a five-year revenue CAGR of 20.09% and five-year EPS CAGR of 26.85%, though this is contrasted by a negative five-year free-cash-flow CAGR of -45.70% and a net margin of 10.19%.
Operating growth and profitability metrics remain solid, with an ROIC of 15.72%. Financial flexibility is preserved via a current ratio of 2.25x and a debt-to-equity ratio of 0.00x, meaning balance sheet strength partially offsets the observed cash flow divergence.
- Fabrinet carries a market capitalization of $13.65B and ended the trading session at $381 on September 17, 2026.
- The annualized five-year revenue growth rate is 20.09%, while the five-year EPS CAGR is 26.85%.
- The annualized five-year free cash flow growth rate is negative at -45.70%.
- The company maintains a net margin of 10.19% and an ROIC of 15.72%.
- Liquidity is supported by a current ratio of 2.25x alongside a debt-to-equity ratio of 0.00x.
Fundamental snapshot
The valuation, growth, profitability, and balance-sheet facts behind the checkup.
Evaluating Operational Expansion and Financial Divergence
An objective assessment of Fabrinet requires analyzing whether its operational expansion, cash generation, capital returns, and balance sheet flexibility present a unified fundamental profile. The equity closed at $381 on September 17, 2026, representing a market capitalization of $13.65B. To understand the operational realities behind this valuation, we must look past short-term market movements and evaluate the underlying financial data.
The core of this evaluation lies in comparing the long-term annualized top-line growth of 20.09% and the annualized per-share earnings growth of 26.85% against the five-year free-cash-flow CAGR of -45.70%. This significant divergence between accounting profits and actual cash generation is a central focus of this research note, as it raises questions about the quality and sustainability of the company's financial trajectory.
Current compounder snapshot · FN
Live supporting context; not part of the article's frozen 2026-09-17 evidence snapshot.
- Score
- 46/100
- 10Y CAGR
- 16.9%
- Median YoY
- 17.3%
- YoY volatility
- σ 14.9pp· uneven
- Quarters ≥ 20%
- 14 of 40
- Negative quarters
- 4
- Valuation vs own 10Y history
- P/S 3.2x · 10Y median 1.8x · 88th percentile · as of Sep 11, 2026
How this score is computed
- Quarters at or above 20%: 14 of 40 → 14 of 40 pts
- Steadiness (typical swing 14.9pp) → 14.4 of 25 pts
- Pace (median 17.3% YoY) → 3.1 of 20 pts
- Latest quarter (44.6% YoY) → 15 of 15 pts
- Score: 46 of 100
Annualized revenue (TTM) · by quarter, last 40
Quarterly YoY revenue growth vs the 20% line
P/S multiple vs its 10Y median
A High Level View of Corporate Performance Metrics
Operating within the Technology sector, Fabrinet functions as a specialized manufacturing services provider. This business model requires substantial working capital and ongoing capital expenditures to support customer programs. The snapshot below consolidates key valuation, growth, and leverage metrics, providing a baseline for analyzing how effectively the company converts its business opportunities into tangible shareholder value.
Fundamental evidence table
A compact cross-check of valuation, growth, quality, and financial flexibility.
FN revenue
Revenue history shows whether the business has been expanding before margins and per-share metrics are considered. Q4 FY2026 (2026-06-26): $1.32B.
Five-year revenue CAGR: 20.09%. This is endpoint-to-endpoint across the five-year window — a depressed start year can inflate it, so read it against the recent bars.
Five-year revenue CAGR of 20.09% is the top-line test. A fundamental checkup becomes more durable when revenue growth is paired with earnings growth instead of depending only on margin expansion.
Top Line Expansion and Per Share Earnings Realization
Analyzing the relationship between sales and net income shows how efficiently top-line expansion translates into net profits. Over the past five years, revenue has grown at an annualized rate of 20.09%, demonstrating steady demand for the company's technical assembly capabilities. This expansion has been accompanied by positive trailing twelve-month revenue growth, confirming that the upward trajectory remains intact.
This top-line progress has converted efficiently into bottom-line results, with a five-year EPS CAGR of 26.85% and positive trailing twelve-month net income and EPS growth. When per-share earnings outpace revenue growth, it typically indicates operating leverage or share repurchases. However, the quality of this earnings expansion must be verified by examining the underlying cash flows.
FN EPS
EPS history shows how much of the business growth has reached shareholders. Q4 FY2026 (2026-06-26): $3.89.
Five-year EPS CAGR: 26.85%. This is endpoint-to-endpoint across the five-year window — a depressed or negative start year can inflate it, so read it against the recent bars.
Five-year EPS CAGR of 26.85% is the shareholder conversion check. If EPS grows faster than revenue, the note should ask whether that came from margin quality, buybacks, or a temporary base effect.
The Disconnect Between Accounting Profits and Cash Generation
While net income and per-share earnings have trended upward, cash generation presents a very different picture. The five-year free-cash-flow CAGR has declined to -45.70%, and trailing twelve-month free cash flow growth is negative. This divergence suggests that cash is increasingly tied up in working capital, inventory, or capital expenditures required to sustain operations.
When free cash flow lags behind accounting profits over an extended period, it warrants caution. If the cash required to run the business exceeds net income growth, the reported earnings expansion may not translate into build-ups of cash or capital returns. This cash flow pressure represents a key operational risk that could constrain future flexibility.
FN free cash flow
Free cash flow checks whether earnings are converting into owner cash. Q4 FY2026 (2026-06-26): $-38.08M.
Five-year free-cash-flow CAGR: -45.70%. This is endpoint-to-endpoint across the five-year window — a depressed or negative start year can inflate it, so read it against the recent bars.
Free-cash-flow CAGR of -45.70% is the counterweight to the EPS story. If cash flow lags earnings, the quality of the fundamental setup deserves a more cautious reading.
Evaluating Margin Profiles and Reinvestment Efficiency
The durability of the company's growth depends on its profitability margins and capital efficiency. Currently, the firm maintains a net margin of 10.19%, reflecting the competitive, high-volume nature of contract manufacturing. This single-digit margin profile leaves little room for operational errors or sudden shifts in customer demand.
Despite thin margins, the company achieves an ROIC of 15.72%. This return indicates that the business is still generating solid profits relative to the debt and equity capital invested in its operations. Sustaining this level of capital efficiency is essential if the company is to justify its ongoing capital investments amid declining cash flows.
FN net margin
Net margin is the operating-quality check behind the growth record. Q4 FY2026 (2026-06-26): 10.81%.
Net margin (TTM): 10.19%. The bars below are reported fiscal periods (quarterly where available).
Net margin of 10.19% shows how much revenue becomes profit. The checkup is stronger when margin quality supports EPS growth rather than simply flattering one recent period.
FN ROIC
ROIC tests whether the business earns enough on reinvested capital to deserve attention. Q4 FY2026 (2026-06-26): 15.72%.
Latest ROIC: 15.72%.
ROIC of 15.72% is the reinvestment-quality check. A business with stronger returns can support a better long-term read even when the valuation is not obviously cheap.
Liquidity Buffers and the Absence of Balance Sheet Debt
A strong balance sheet acts as a crucial buffer when cash flow lags behind earnings. The company's financial position is characterized by a debt-to-equity ratio of 0.00x, indicating that it carries no long-term debt. This lack of leverage eliminates interest rate risks and debt servicing obligations, providing significant financial security.
Short-term liquidity is also robust, as evidenced by a current ratio of 2.25x. This level of short-term assets relative to short-term liabilities ensures that the company can meet its immediate operational needs and manage working capital fluctuations, even as free cash flow generation remains under pressure.
FN debt-to-equity Chart
Debt-to-equity keeps the checkup honest about balance-sheet flexibility. Historical series through 2026-06-26.
Latest debt-to-equity ratio: 0.00x.
Debt-to-equity of 0.00x and current ratio of 2.25x are the balance-sheet checks. They matter because growth and margins are less valuable if financial flexibility is narrowing.
Market Multiples and the Hurdle for Future Performance
The market's valuation of the business determines the performance hurdle the company must clear. The stock trades at a trailing P/E ratio of 29.19x, which corresponds to an earnings yield of 3.43%. This valuation multiple indicates that investors are pricing in continued strong earnings growth.
Comparing this valuation to the company's financial reality is informative. The current stock price sits above the analyst DCF (FMP) reference estimate, suggesting a negative margin of safety. With a premium multiple and a price above estimated fair value, the market is demanding flawless execution, leaving little room for operational setbacks.
FN Price Chart
Latest close: $381 as of September 17, 2026.
The close at $381 is not the conclusion, but it is the market reference point. The fundamental read has to explain whether growth, margins, and balance-sheet support justify the price investors are paying.
Weighing Balance Sheet Strength Against Cash Flow Pressures
The fundamental bull case rests on the company's ability to maintain its five-year revenue CAGR of 20.09% and five-year EPS CAGR of 26.85% while utilizing its debt-free balance sheet to navigate industry cycles. If the firm can sustain its ROIC of 15.72% without taking on leverage, it remains well-positioned to fund future expansion.
Conversely, the bear case is centered on the ongoing cash flow deficit, highlighted by the negative five-year free-cash-flow CAGR of -45.70%. If cash generation does not improve to match reported net income, the company may eventually face liquidity constraints or be forced to dilute shareholders, especially if its net margin of 10.19% faces downward pressure.
Bull and bear case
Fundamental support
- Five-year revenue CAGR of 20.09% and five-year EPS CAGR of 26.85% support the business case.
- Net margin of 10.19% and ROIC of 15.72% are the quality checks behind the thesis.
Fundamental pressure
- Free-cash-flow CAGR of -45.70% can weaken the read if it falls away from EPS growth.
- Debt-to-equity of 0.00x and current ratio of 2.25x are the balance-sheet checks that can change the view.
Monitoring Key Operational and Balance Sheet Metrics
In conclusion, while the company's top-line and earnings growth remain strong, the negative free cash flow trend represents a notable divergence that warrants close monitoring. This analysis is based on financial data as of September 17, 2026. Future updates to the company's revenue growth, cash conversion, or balance sheet metrics could alter this fundamental outlook.
FAQ
What is the fundamental read on FN?
Fabrinet is judged through revenue growth of 20.09%, EPS growth of 26.85%, free-cash-flow growth of -45.70%, net margin of 10.19%, and ROIC of 15.72%.
Which FN fundamental metric matters most?
No single metric carries the article. The checkup requires growth, cash conversion, profitability quality, balance-sheet flexibility, and valuation to be read together.
When should this FN checkup refresh?
Its figures are as of September 17, 2026, the note's dated snapshot; a note whose figures stop verifying against reported data is corrected or unpublished.
What would change our mind
- Any deceleration in top-line growth below the current five-year revenue CAGR of 20.09%.
- The potential for further divergence between per-share earnings growth and the five-year free-cash-flow CAGR of -45.70%.
- A shift in capital efficiency metrics, specifically if the ROIC trends away from the current 15.72%.
The bottom line
Fabrinet fundamental research note from TGMCharts Research, grounded in a dated fundamentals snapshot, chart exhibits, and linked source facts.
Read next: Fabrinet (FN) Earnings ReviewEarnings review on Fabrinet — from the same data-checked research desk.How we checked this researchShowHide
Data snapshot · By TGMCharts Research.
Every number in this note comes from data we compute and store ourselves from the company's reported figures, plus verbatim excerpts from its SEC filings. When a value isn't available we say so — we never fill gaps with estimates.
Latest filing excerpt
10-K · filed 2026-08-18 · period 2026-06-26 · SEC EDGAR source
- “The percentage of our revenues generated from a ship-to location outside of North America decreased from 78.4% in fiscal year 2025 to 77.3% in fiscal year 2026, primarily because of an increase in revenue from sales to our customers in North America.”
- “The OECD introduced a global minimum tax framework ("Pillar Two") that imposes a minimum tax rate of 15% on multinational enterprise groups with annual consolidated revenue exceeding 750 million.”
- “To better reflect our current business profile, beginning in the fourth quarter of fiscal year 2026, we updated our revenue category presentation from optical communications and non-optical communications to data center, communications infrastructure, and automotive, industrial and other markets.”
- “The excess or obsolete inventory is shipped to the customer and recognized as an offset against cost of revenue upon shipment.”
Source pages
Exhibit sources
Research trail
Every number, checked
Every numeric or dated claim in this note was checked against our stored company data before publishing — each figure below links to the page it comes from.