Fabrinet

Worth knowing

• Buybacks largely absorbed by stock pay. Stock-based pay expense $96M vs $170M spent repurchasing shares over the 3 fiscal years to FY Jun 2026. Shares outstanding changed −1.0% from June 2023 to August 2026.

  Over three fiscal years Fabrinet recorded $96M of stock-based pay expense and spent $170M repurchasing shares (repurchases can include shares withheld to cover employees' taxes). The share count barely moved (−1.0%), so much of the repurchasing offset new employee shares rather than shrinking the count.Over three fiscal years Fabrinet recorded $96M of stock-based pay expense and spent $170M repurchasing shares. The share count barely moved (−1.0%), so much of the repurchasing offset new employee shares rather than shrinking the count.

• Profit isn't fully turning into cash. Free cash flow is only 0.9% of reported profit.

  Free cash flow is only 0.9% of reported profit. That usually means heavy spending on facilities and equipment, or cash tied up in inventory and unpaid bills. Worth checking whether it's a phase of investment or a lasting pattern.

• Investment surge. Capital spending 5.4% of revenue, up from 2.3% in FY Jun 2023.

  Fabrinet is spending 5.4% of revenue on facilities and equipment, up from 2.3% in FY Jun 2023. That weighs on free cash flow today; whether it pays off depends on the returns those investments earn.

• Valuation signals disagree. Cheaper than 69% of peers on earnings, but only 28% on free cash flow.

  Relative to its earnings, Fabrinet looks cheaper than 69% of peers; relative to its free cash flow, cheaper than only 28%. The valuation score blends the two, so look at which measure fits this business best.