Key Takeaways
- Coherent shares fell 19% in the past week and Lumentum fell 16%, as AI optics stocks sold off after a hot September inflation report.
- Coherent put out no news except its earnings date, and analysts’ revenue estimates for fiscal 2027 and 2028 held up through the selloff.
- The weak spot is cash: revenue has beaten estimates five quarters in a row, but operating cash flow has missed every time.
- Coherent’s forward P/E has fallen to 24.7x, less than half its June peak, and the Nov. 4 report has to show the cash finally arriving.
Coherent (COHR) stock is down 19% in the past week (through Monday’s close), about five times the Nasdaq 100’s 3.7% drop. Lumentum (LITE) fell 16%, and other AI networking names fell by double digits.
That leaves Coherent 47% below its 52-week high, though still up 26% in 2026.
So is it time to sell, or load up?
What exactly happened
Coherent’s only news all week was an Oct. 14 notice setting its earnings date. The selling came from outside…
- Oct. 14 (down 9.2%): September’s core inflation came in above forecasts, Treasury yields rose on worries the Fed could hike again, and AI stocks took the brunt.
- Oct. 15 (down 4.8%): Before the open, B. Riley cut its price target to $297 from $345 and kept a Neutral rating, pointing to the recent selloff.
- Oct. 16 (down 7.1%): Another leg down, with no company news.
Coherent had already fallen nearly 10% on Oct. 8 as rising yields hit optics stocks, then almost 8% on Oct. 12 as AI spending worries knocked Lumentum down about 10%.
Rates hit a stock like this hard because much of what investors are paying for sits a couple of years out, and higher yields shrink what those earnings are worth today.
TIKR tracks 24 analysts on Coherent. How many say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on Coherent, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See Coherent’s Analyst Ratings
Nothing changed at Coherent
Coherent’s big ramps land in fiscal 2028 (the year to June 2028). At an optics conference on Sept. 21, CEO Jim Anderson said near-packaged and co-packaged optics for scale-up networks both start ramping in the second half of 2027. On a chip needing 100 terabits of I/O, he said, “the content for Coherent would be up to about $15,000 per system or per 100T chip” if Coherent supplies the whole solution.
That’s a ceiling, but a big one. And two leading hyperscale AI customers have signed long-term agreements for Coherent’s ultra-high-power lasers.
Analysts kept raising their numbers. Between June 30 and Sept. 30, consensus revenue for fiscal 2027 rose to $10.63 billion from $9.57 billion, and fiscal 2028 to $14.76 billion from $12.92 billion. And they held through the selloff.
Cash is the soft spot
Coherent has beaten revenue estimates five quarters running, and missed on operating cash flow every time.
Through fiscal 2025, cash from operations still covered capex every year.
Fiscal 2026 broke that. Operating cash flow fell to $80 million, free cash flow came in at negative $1.02 billion, and net debt ended at $2.06 billion. And Beck Mason, who runs semiconductor devices, said Coherent plans to double its indium phosphide capacity again next year, or more.
The multiple did the falling
With estimates up and the stock down, Coherent’s forward P/E has dropped to 24.7x, from 57.4x in early June.
That’s right around its five-year average of 23.6x. The Street’s mean target is $410, from 24 analysts with a Buy consensus, about 77% above Monday’s close. Even B. Riley’s trimmed $297 sits 28% above it.
What to watch on Nov. 4
Coherent reports fiscal first-quarter results after the close on Wednesday, Nov. 4. The markers:
- Revenue against guidance of $2.2 billion to $2.4 billion, with consensus near $2.30 billion
- Non-GAAP gross margin within the 39.5% to 41.5% guide
- A December-quarter outlook above the roughly $2.53 billion analysts expect
- An operating cash flow beat, finally
My take: I’d lean toward loading up. Analysts expect more revenue than they did in June, and the stock trades at less than half June’s multiple.
Of course, a sixth straight cash-flow miss or a soft December outlook on Nov. 4 would give investors a reason to sell that has nothing to do with rates.
So what is Coherent stock actually worth?
TIKR lets you forecast the future price of any stock in less than a minute. Just enter a few assumptions into TIKR’s valuation model and see what Coherent could be worth. Start from Wall Street consensus estimates, or adjust the inputs to reflect your own view of the business. It’s free to use.
Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
