COHERENT CORP. (COHR)

Price—Loading quote

AI: Overvalued

Price checkThe shares look overvalued because today's price assumes years of exceptional growth.

At $336.83 in premarket trading on August 17, the shares cost about 82 times fiscal 2026 reported earnings of $4.12 per share and 60 times adjusted earnings of $5.61. Adjusted earnings exclude items management considers unusual, so they are the kinder measure. Even annualizing the first-quarter adjusted earnings guide gives roughly $7.80 and a 43-times price. A 25-times price would require about $13.47 in yearly earnings, 73% above that annualized guide. The thin premarket quote was 3.4% above Friday's close.

Big pictureProfit growth is impressive, but heavy investment has not yet produced dependable cash.

Fiscal 2026 revenue rose 22.5% to $7.12 billion, net income reached $805 million from $49 million, and operating margin widened to 12.6% from 5.0%. Yet operating cash fell to $80 million while capital spending surged to $1.10 billion. That produced negative $1.02 billion of free cash flow, meaning cash left after running and investing in the business. Inventory climbed 80% to $2.58 billion. Datacenter and communications revenue grew 40%, but industrial revenue fell 10%, showing genuine cycle exposure.

Business strengthThe balance sheet improved, though expansion relied on debt and substantial new shares.

June-end debt was $3.22 billion against $1.16 billion of cash; including $825 million of short-term investments lowers that gap to $1.24 billion. Debt fell $465 million year over year, while current assets were 2.4 times current liabilities, providing adequate near-term liquidity. However, fourth-quarter average basic shares rose 26% to 195.7 million. Part reflected conversion of preferred shares already capable of becoming common, while NVIDIA added 7.8 million new shares for $2 billion. Stock compensation rose 16% to $186 million, with no buyback offset shown.

What could change the storyFaster cash conversion could justify optimism, while stalled optical demand would expose the valuation.

The strongest bull case is NVIDIA's multibillion-dollar purchase commitment and $2 billion equity investment, reinforced by proposed federal support to quadruple Texas wafer capacity. It strengthens if Coherent reaches first-quarter revenue of $2.2-$2.4 billion and adjusted earnings of $1.85-$2.05 per share while turning inventory into positive free cash flow. The bear case strengthens if industrial sales keep shrinking, capacity spending stays above operating cash, or optical orders cool. At today's price, rapid growth and much better cash conversion are requirements, not optional upside.

$336.83 price considered

AI: News

Record results and guidanceCoherent broke recent records and raised its near-term outlook, but the shares still fell.

On August 12, Coherent reported fourth-quarter revenue of $2.05 billion, up 34%, reported earnings of $1.19 per share, and adjusted earnings of $1.74. It guided the September quarter to $2.2-$2.4 billion of revenue and $1.85-$2.05 of adjusted earnings per share. Shares fell 8.0% on August 13 despite the strong figures. The timing supports an inference that expectations were even higher, but it does not prove the report alone caused the decline.

Texas capacity supportProposed federal funding supports a large factory expansion needed to serve artificial-intelligence networks.

On June 16, Coherent announced a nonbinding letter of intent for up to $50 million from a federal semiconductor-support program. The Texas expansion would double manufacturing space, quadruple indium phosphide wafer capacity, and create more than 1,000 jobs. This capacity targets optical-networking bottlenecks in artificial-intelligence data centers. The maximum award is less than 5% of fiscal 2026 capital spending, however, and remains proposed rather than final. Shares fell 7.5% that session, but timing alone does not establish why.

NVIDIA becomes strategic backerNVIDIA paired a major purchase commitment with fresh capital, validating demand while diluting existing owners.

On March 2, NVIDIA agreed to a nonexclusive, multiyear partnership containing a multibillion-dollar purchase commitment and capacity rights. It also bought 7,788,161 newly issued Coherent shares at $256.80 for $2 billion. Reuters reported that the shares rose about 9% following the announcement. The deal validates optical demand and funds United States capacity, but serving one large strategic customer becomes more important. The new shares represented roughly 4% of the post-sale issued share count.

Revenue

2019

2020

2021

2022

2023

2024

2025

2026

Net income

2019

2020

2021

2022

2023

2024

2025

2026

Free cash flow

2019

2020

2021

2022

2023

2024

2025

2026

Total cash / debt

CashTotal debt

2019

2020

2021

2022

2023

2024

2025

2026

Financial statements

	2026	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015	2014	2013	2012	2011	2010	2009
Revenue	$7.12B	$5.81B	$4.71B	$5.16B	$3.32B	$3.11B	$2.38B	$1.36B	$1.16B	$972.0M	$827.2M	$742.0M	$683.3M	$551.1M	$516.4M	$502.8M	$345.1M	$292.2M
Research & development	$723.0M	$581.9M	$478.8M	$499.6M	$377.1M	$330.1M	$339.1M	$139.2M	$116.9M	$96.8M	$60.4M	$51.3M	$42.5M	$22.7M	$21.4M	$16.1M	$11.8M	$10.2M
Operating income	—	—	$96.1M	−$37.1M	$414.3M	$402.1M	$39.5M	$148.7M	$136.8M	$115.6M	$91.8M	$76.8M	$46.5M	$71.5M	$81.5M	—	—	—
EBITDAderived	—	—	$655.9M	$644.6M	$701.1M	$672.2M	$260.4M	$241.0M	$217.5M	$179.2M	$148.5M	$129.9M	$99.6M	$112.3M	$116.0M	—	—	—
Net income	$805.0M	$49.4M	−$156.2M	−$259.5M	$234.8M	$297.6M	−$67.0M	$107.5M	$88.0M	$95.3M	$65.5M	$66.0M	$38.4M	$50.8M	$60.3M	$82.7M	$38.6M	$36.8M
Basic EPSper diluted share	$4.34	-$0.52	-$1.84	-$2.93	$1.57	$2.50	-$0.79	$1.69	$1.41	$1.52	$1.07	$1.08	$0.62	$0.81	$0.96	$1.33	$0.64	$0.62
Diluted EPSper diluted share	$4.12	-$0.52	-$1.84	-$2.93	$1.45	$2.37	-$0.79	$1.63	$1.35	$1.48	$1.04	$1.05	$0.60	$0.80	$0.94	$1.30	$0.63	$0.61

Review source filings at SEC.gov ↗

Insider buys & sells

Jul 1, 2024–Jun 30, 2026

Buys4$175.3K disclosed value

Sells (SEC code S)78$1.12B disclosed value

Transaction	Insider	Type	Shares	Price	Value	Owned after
May 12, 2026Form 4 · 10b5-1	Luther Sherri RChief Financial Officer	SellCommon Stock	2.0K	$372.96	$745.9K	68.5K
May 11, 2026Form 4	Xia Howard H.Director	SellCommon Stock	500	$368.00	$184.0K	50.3K
May 11, 2026Form 4	Xia Howard H.Director	SellCommon Stock	500	$358.00	$179.0K	50.8K
May 11, 2026Form 4	Xia Howard H.Director	SellCommon Stock	500	$348.00	$174.0K	51.3K
May 11, 2026Form 4	Xia Howard H.Director	SellCommon Stock	500	$344.00	$172.0K	51.8K

Review ownership filings at SEC.gov ↗

COHERENT CORP. (COHR)

Financial charts

Financial statements

Insider buys & sells