Key Takeaways
- Coherent shares rose 20% in the past week, as its 50% revenue growth outlasted a midterm selloff.
- Management guides to more than 60% pro forma revenue growth in fiscal 2027.
- CoreWeave’s faster buildout points to more demand for optics, but rival Lumentum earns far higher margins.
- Coherent still trades below its five-year average forward P/E, but its cash flow has to turn positive.
Coherent (COHR) stock is up 20% in the past week, despite a midterm scare that hit AI hardware the morning after its report.
CoreWeave (CRWV), up 26% itself, gave the rally its latest push. Rival Lumentum (LITE) climbed too, and its margins are well beyond what Coherent can match.
A beat the market sold anyway
Coherent’s revenue rose 50% to $2.37 billion in the September quarter, ahead of the $2.3 billion analysts expected. It guided December-quarter revenue to $2.55 billion to $2.75 billion, above consensus, and expects pro forma growth above 60% in fiscal 2027.
The stock still fell 13% on Nov. 5, as chip stocks extended a selloff that began with Democrats’ bigger-than-expected midterm wins. Investors bought it back as the scare faded.
CoreWeave’s report on Nov. 10 kept it going. Revenue rose 168% to $3.66 billion. It also raised the low end of its 2026 capex range, which now runs from $37 billion to $39 billion. Every GPU cluster CoreWeave brings online needs optical links, so if it builds faster, Coherent and its rivals sell more of them.
Booked out through 2027
CEO Jim Anderson said on Coherent’s fiscal first-quarter call that “calendar ‘27 is basically booked out and the customers are booking out calendar ‘28 now.” Analysts expect normalized EPS to nearly triple from fiscal 2026 to fiscal 2028:
Nothing this week gives analysts a reason to cut, and CoreWeave’s report gives them the least reason of all.
Competition is the catch. Lumentum’s non-GAAP gross margin was 53.2% in the September quarter, against Coherent’s 40.6%, and Marvell Technology is buying Lumentum.
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
Still cheaper than usual
Even after the jump, Coherent trades below its usual multiple:
It sat at 18x forward earnings on Nov. 10, against a 24x five-year average and a 57x peak in June. At today’s price it’s higher, but still below that average.
The risk is cash. Operating cash flow was negative $93 million in the September quarter, as capex hit $776 million.
A company sold out through 2027 at a below-average multiple is worth buying through the cash crunch. But its early-February report needs to show operating cash flow turning positive, or that discount will stick.
So what is Coherent stock actually worth?
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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!
