NeoPhotonics Corp. shares are down 5.4% in morning trading Friday after the optoelectronics company posted a sizable miss on the bottom line the prior afternoon. "NeoPhotonics gross margin continued to underperform, in what was otherwise a largely uneventful [report]," wrote Raymond James analyst Simon Leopold, who rates the stock at market perform. "Management did not refute potential inventory builds from Chinese customers but considered these moderate and largely linked to expected regional activity." Needham analyst Alex Henderson said there was "some improvement in the outlook," though it was clouded by issues with mix and foreign exchange. "Even as demand out of China is improving, the mix has surprised with a shift to 100G/200G older products for longhaul backbones," he wrote. "This put a bit of unexpected pressure on GMs which came in at 22.5% below our forecast of 26%." Henderson has a strong buy rating on the shares and a $12 target. The stock has fallen 14% over the past three months, while the S&P 500 has gained 8%.