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1. Company Snapshot

1.a. Company Description

Coherent, Inc.provides lasers, laser-based technologies, and laser-based system solutions for a range of commercial, industrial, and scientific research applications.It operates in two segments, Original Equipment Manufacturers (OEM) Laser Sources and Industrial Lasers & Systems.


The company designs, manufactures, markets, and services lasers, laser tools, precision optics, and related accessories; and laser measurement and control products.Its products are used for applications in microelectronics, materials processing, OEM components and instrumentation, and scientific research and government programs.The company markets its products through a direct sales force in the United States, as well as through direct sales personnel and independent representatives internationally.


Coherent, Inc.was founded in 1966 and is headquartered in Santa Clara, California.As of July 1, 2022, Coherent, Inc.


operates as a subsidiary of II-VI Incorporated.

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1.b. Last Insights on COHR

Breaking News: Coherent Inc has expanded its silicon carbide platform with 300mm capability to meet growing demand from AI and datacenters. This move is expected to address increasing thermal efficiency demands. The company is well positioned in the communication equipment industry which has seen a surge in recent times. Analysts at investment bank recommend a buy on Coherent Inc as it emerges as a key pick in drone technology stocks for 2026 backed by strong growth outlooks and rising demand across defense and industrial markets.

1.c. Company Highlights

2. Coherent's Q1 Fiscal 2026 Earnings: A Strong Start to the Year

Coherent's financial performance in Q1 Fiscal 2026 was robust, with revenue increasing by 6% sequentially and 19% year-over-year on a pro forma basis. The company's non-GAAP gross margin expanded by 70 basis points sequentially and 200 basis points year-over-year, reaching 38.7%. Earnings per diluted share (EPS) came in at $1.16, beating analyst estimates of $1.04. The strong revenue growth and margin expansion were driven by the Datacenter and Communications segment, which saw revenue grow by 7% sequentially and 26% year-over-year.

Publication Date: Nov -14

📋 Highlights
  • Sequential Revenue Growth: Q1 revenue rose 6% sequentially and 19% YoY to $1.5B, driven by strong Datacenter & Communications (7% qoq, 26% YoY) and stable Industrial (2% qoq, 4% YoY) segments.
  • Gross Margin Expansion: Non-GAAP gross margin hit 38.7%, up 70 bps qoq and 200 bps YoY, aided by pricing optimization and efficiency gains.
  • Debt Reduction: Paydown of $400M debt reduced leverage to 1.7x from 2.4x YoY, while refinancing cut interest rates by 60 bps and expanded revolving credit to $700M.
  • Indium Phosphide Capacity: Plans to double production capacity for EML lasers over 12 months, with 6-inch wafers expected to reduce costs by half and boost margins as production ramps.
  • 1.6T Transceiver Momentum: Accelerating adoption in DCI and telecom, with revenue growth doubling from 4% to 10% sequential in the December quarter; 1.6T now dominates orders over 800G.

Segment Performance

The Datacenter and Communications segment was the main driver of growth, with strong demand for 800 gig and 1.6T transceivers. The company expects to roughly double its internal production capacity of indium phosphide over the next year. In the Industrial segment, revenue grew 2% quarter-over-quarter and 4% year-over-year on a pro forma basis, with the company maintaining a cautious outlook on near-term demand.

Guidance and Outlook

Coherent expects revenue to be between $1.56 billion and $1.7 billion in Q2 Fiscal 2026, with non-GAAP gross margin between 38% and 40%. The company expects EPS to be between $1.10 and $1.30 on a non-GAAP basis. Management is confident in driving long-term growth and durable value creation for shareholders, with a focus on disciplined execution against its long-term financial target model.

Valuation and Debt Reduction

With a P/E Ratio of 87.24 and an EV/EBITDA of 29.07, the market is pricing in high growth expectations for Coherent. The company has made significant progress in reducing its debt, with a debt leverage ratio of 1.7x, down from 2.4x in the year-ago quarter. The refinancing of its debt reduced the interest rate by 60 basis points and doubled the amount of its revolving credit facility to $700 million. As Sherri Luther noted, "We've reduced our debt leverage to 1.7x after the $400 million debt paydown from the sale of the A&D business."

Growth Prospects

Analysts estimate next year's revenue growth at 14.3%, which is lower than the current year's growth rate. However, with the company's strong track record of execution and its focus on investing in growth areas, it is well-positioned to drive long-term growth. The adoption of 1.6T transceivers is accelerating, and the company is seeing strong orders in DCI and traditional telecom.

3. NewsRoom

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Buy 3 Drone Technology Stocks to Enhance Your Portfolio Returns in 2026

Dec -04

Source: zacks.com

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Coherent Expands Silicon Carbide Platform with 300mm Capability to Support Growing Demand of AI and Datacenters

Dec -03

Source: globenewswire.com

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The AI Boom Is Powering an Unexpected Stock Surge—And These 3 Companies Are Winning Big

Dec -03

Source: marketbeat.com

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Is Coherent Prepared to Capture the Momentum in the EV Market?

Dec -01

Source: zacks.com

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BitMine, Rocket Companies, And Symbotic Are Among the Top 10 Large-Cap Gainers Last Week (Nov. 24-Nov. 28): Are the Others in Your Portfolio?

Nov -30

Source: feeds.benzinga.com

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Humana (NYSE:HUM) Stock Acquired Rep. Lisa C. McClain

Nov -27

Source: defenseworld.net

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Rep. Lisa C. McClain Sells Spire Inc. (NYSE:SR) Stock

Nov -27

Source: defenseworld.net

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Roivant Sciences (NASDAQ:ROIV) Shares Unloaded Rep. Lisa C. McClain

Nov -27

Source: defenseworld.net

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (9.61%)

6. Segments

Networking

Expected Growth: 10.43%

Coherent's Networking segment growth is driven by increasing demand for high-speed optical interconnects, fueled by cloud computing, artificial intelligence, and 5G infrastructure investments. Additionally, the company's leadership in indium phosphide and silicon photonics technologies enables it to capitalize on the growing need for high-bandwidth, low-latency networking solutions.

Lasers

Expected Growth: 9.33%

Coherent, Inc.'s laser segment growth is driven by increasing demand for precision manufacturing, semiconductor fabrication, and microelectronics. The company's leadership in ultrafast laser technology and its expanding presence in the automotive and aerospace industries also contribute to its growth. Additionally, the rising adoption of laser-based solutions in medical and industrial applications fuels the segment's 9.33% growth.

Materials

Expected Growth: 8.5%

Coherent, Inc.'s 8.5% growth in Materials segment is driven by increasing demand for laser-based solutions in microelectronics, robust growth in OLED display manufacturing, and rising adoption of laser technology in automotive and industrial applications.

7. Detailed Products

Laser Systems

Coherent offers a wide range of laser systems, including ultrafast lasers, diode lasers, and excimer lasers, used in various applications such as material processing, spectroscopy, and microscopy.

Optical Communications

Coherent provides optical communications products, including optical transceivers, optical amplifiers, and optical switches, used in data centers, metro networks, and long-haul networks.

Microelectronics

Coherent offers a range of products for microelectronics, including laser-based solutions for semiconductor manufacturing, flat panel display manufacturing, and LED manufacturing.

Instrumentation

Coherent provides instrumentation products, including spectrometers, interferometers, and microscopes, used in various applications such as biomedical research, material science, and quality control.

OEM Components

Coherent offers a range of OEM components, including laser diodes, laser modules, and optical components, used in various applications such as medical devices, industrial equipment, and aerospace.

Services

Coherent provides a range of services, including laser system integration, custom laser solutions, and technical support, used in various applications such as material processing, spectroscopy, and microscopy.

8. Coherent, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Coherent, Inc. is medium due to the availability of alternative laser technologies.

Bargaining Power Of Customers

The bargaining power of customers is low due to the specialized nature of Coherent, Inc.'s products and the lack of alternative suppliers.

Bargaining Power Of Suppliers

The bargaining power of suppliers is medium due to the presence of multiple suppliers for raw materials and components.

Threat Of New Entrants

The threat of new entrants is high due to the growing demand for laser technologies and the potential for new companies to enter the market.

Intensity Of Rivalry

The intensity of rivalry is high due to the competitive nature of the laser technology industry and the presence of established competitors.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 47.37%
Debt Cost 8.76%
Equity Weight 52.63%
Equity Cost 12.40%
WACC 10.68%
Leverage 90.00%

11. Quality Control: Coherent, Inc. passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Trimble

A-Score: 4.8/10

Value: 1.2

Growth: 5.2

Quality: 6.6

Yield: 0.0

Momentum: 7.5

Volatility: 8.3

1-Year Total Return ->

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Itron

A-Score: 4.6/10

Value: 3.1

Growth: 5.7

Quality: 6.7

Yield: 0.0

Momentum: 6.5

Volatility: 5.3

1-Year Total Return ->

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Cognex

A-Score: 3.9/10

Value: 0.9

Growth: 2.7

Quality: 7.6

Yield: 2.0

Momentum: 6.5

Volatility: 4.0

1-Year Total Return ->

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Stock-Card
MKS Instruments

A-Score: 3.8/10

Value: 2.8

Growth: 5.0

Quality: 4.7

Yield: 1.0

Momentum: 6.5

Volatility: 3.0

1-Year Total Return ->

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Stock-Card
Novanta

A-Score: 3.3/10

Value: 1.1

Growth: 7.0

Quality: 5.6

Yield: 0.0

Momentum: 1.0

Volatility: 5.3

1-Year Total Return ->

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Stock-Card
Coherent

A-Score: 3.2/10

Value: 1.4

Growth: 4.9

Quality: 3.8

Yield: 0.0

Momentum: 6.5

Volatility: 2.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

177.35$

Current Price

177.35$

Potential

-0.00%

Expected Cash-Flows