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what it is
Coherent makes the lasers, optical parts, and engineered materials that move data and power industrial machines.
how it gets paid
Last year Coherent made $5.8B in revenue. Networking was the main engine at $2.84B, or 49% of sales.
growth snapshot
Revenue was roughly flat last year at $5.8B. The company is experiencing unprecedented demand for its optical networking products from ai data centers while ramping recent product introductions that include.
what just happened
Latest quarter revenue hit $3.3B, up 94% vs. prior year, while earnings also came in ahead of estimates.
At a glance
B+ balance sheet — decent shape, but not bulletproof
10/100 earnings predictability — expect surprises
30.9x trailing p/e — you're paying up for this one
12.5% return on capital — nothing to write home about
xvary composite: 62/100 — average
What they do
Coherent makes the lasers, optical parts, and engineered materials that move data and power industrial machines.
Coherent sits in the physical layer of tech: Networking was 49% of fiscal 2024 revenue, Lasers 29%, and Materials 22%. Vertically integrated → it makes more of the stack itself → so what: your customer gets fewer handoffs when speed, yield, and reliability actually matter. And with 44% of revenue coming from outside North America, you are not relying on one market to keep the factory busy.
How they make money
$5.8B
annual revenue · their business grew +0.0% last year
Networking
$2.84B
Lasers
$1.68B
Materials
$1.28B
The products that matter
engineered materials and optoelectronic components
core photonics platform
$5.8B revenue · +23.4% growth
it's the full $5.8B business in this snapshot. that's not ideal disclosure, but it tells you the investment case is less about segment mix and more about whether current optical demand holds.
whole story
optical networking demand
ai data center optics
$1.7B quarterly revenue backdrop
management highlighted unprecedented demand for optical networking products while ramping 400g, 800g, and 1.6t transceivers. that demand showed up in a quarter that delivered $1.7B in revenue.
current driver
margin expansion effort
pricing + cost discipline
38.7% non-gaap gross margin
gross margin improved 200 basis points to 38.7%. in human terms: the company is not just selling more, it is keeping more of each sale.
profit filter
Key numbers
1.7%
operating margin
This tells you the quiet part. Coherent sells $5.8B of real hardware, but only a sliver currently drops through as operating profit.
$3.3B
long-term debt
Debt is down to 9% of capital, which is better than it looks, but it still matters when margins are thin.
30.9x
trailing p/e
You are paying a growth multiple today for a business whose recent profitability still looks unfinished.
$6.40
FY2027 EPS est.
That estimate is the bridge holding up the valuation. If it breaks, the stock math changes fast.
Financial health
B+
strength
- balance sheet grade B+ — solid but not elite
- risk rank 3 — safer than 50% of stocks
- price stability 10 / 100
- long-term debt $3.3B (9% of capital)
- net profit margin 15.5% — keeps 16 cents of every dollar in revenue
- return on equity 16% — $0.16 profit for every $1 investors have put in
B+ — functional but not a standout on the balance sheet.
Total return vs. market
You invested $10,000 in COHR 3 years ago → it's now worth $43,920.
The index would have given you $14,770.
source: institutional data · total return
What just happened
beat estimates
Latest quarter revenue hit $3.3B, up 94% vs. prior year, while earnings also came in ahead of estimates.
The company reported EPS of $1.95 in the latest quarter, up 157% vs. prior year, and management also pointed to non-GAAP gross margin of 38.7% in the September quarter. Cost cuts are helping, which matters more here than the headline hype.
$3.3B
revenue
$1.95
eps
38.7%
gross margin
the number that mattered
Revenue up 94% vs. prior year matters because it shows demand is real, but the bigger test is whether that growth can lift the 1.7% operating margin.
-
coherent corp. began fiscal 2026 with a strong first quarter (ended september 30th.) the company delivered record revenue of $1.58 billion, a 3% sequential and 17% vs. prior year increase, driven by continued growth in data center demand and further recovery in telecom.
-
non-gaap gross margin increased 200 basis points over the comparable period to 38.7%, driven by ongoing cost reduction and pricing optimization initiatives. (beginning in 2026, our convention is to use non-gaap/adjusted earnings in our reports.) adjusted earnings per share reached $1.16, a 73% increase over the non-gaap share-net figure of $0.67 in the prior-year period.the company also paid down $400 million in debt during the quarter, following closing the previously announced sale of its aerospace and defense business.
-
the balance sheet was also further strengthened through a debt refinancing that lowered cost of capital while improving financial flexibility.
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we expect that coherent likely evidenced continued momentum in the second quarter. (ended december 31st; results were scheduled for release shortly after this report went to press.) leadership has projected december-period revenues to range between $1.56 billion and $1.7 billion, representing a 14% increase at the midpoint.the company is experiencing unprecedented demand for its optical networking products from ai data centers while ramping recent product introductions that include 400g, 800g, and 1.6t transceivers.
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leadership has signaled that it expects its data center business growth to accelerate approximately 10% sequentially, with a significant portion driven by 1.6t transceiver adoption.
source: company earnings report, 2026
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What could go wrong
the #1 risk is ai optical demand cooling after the current surge.
med
ai optical demand normalization
the recent story is heavily tied to optical networking demand from AI data centers. if those orders pause, the market will stop valuing Coherent like a momentum winner.
this directly pressures the same $1.7B quarterly revenue run rate investors are currently underwriting.
med
customer concentration in optical components
when a few large customers drive demand, the quarter can look great right up until it doesn't. a concentrated book makes the 10/100 predictability score feel earned.
a customer pause would hit a $5.8B revenue base that already trades on continued acceleration.
med
margin giveback after a strong quarter
non-gaap gross margin improved to 38.7% after rising 200 basis points. if that improvement reverses, the EPS jump starts looking less durable.
the recent move from $0.67 to $1.16 in adjusted EPS looks a lot smaller if gross margin slips back.
med
balance-sheet flexibility is better, not perfect
paying down $400M in debt helped, but long-term debt is still $3.3B. that matters more in a business with average stability and low earnings predictability.
you are not dealing with distress risk here. you are dealing with less room for error if the cycle turns.
if AI-linked optical orders cool and gross margin gives back the recent 200-basis-point improvement, a stock already sitting above its $177 target midpoint will have a harder time defending today's price.
source: institutional data · regulatory filings · risk analysis
Pay attention to
metric
gross margin holding near 38.7%
this is the cleanest proof that AI demand is translating into better economics, not just more shipment volume.
trend
whether quarterly revenue stays inside or above the $1.56B–$1.7B guide band
the market is paying for continued momentum. a miss at the low end would change the tone fast.
risk
signs that a few customers are driving too much of the story
customer concentration is manageable until it suddenly isn't. listen for order timing, customer pauses, or mix shifts.
calendar
the next earnings print
with a 10/100 predictability score, each quarter matters more here than it does for steadier large-cap names.
Analyst rankings
short-term outlook
top 20%
momentum score 2 — in human-speak, analysts expect above-average price performance in the year ahead.
risk profile
average
stability score 3 — neither a bunker stock nor a chaos machine.
chart momentum
average
technical score 3 — the chart is not sending a dramatic signal on its own.
earnings predictability
10 / 100
expect surprises. this stock has not earned the luxury of boring quarters.
source: institutional data
Institutional activity
institutions have been net buying for 3 consecutive quarters — 347 buyers vs. 317 sellers in 3q2025. total institutional holdings: 0.1B shares. net buying for 3 quarters.
source: institutional data
Price targets
3-5 year target range
$65
$289
$198
current price
$177
target midpoint · 10% from current · 3-5yr high: $365 (+85% · 17% ann'l return)
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