3.6 KiB
Comprehensive Fundamental Report: Coherent Corp. (COHR)
Date of Analysis: 2026-03-23
Company Profile
Coherent Corp. operates in the Technology sector, specifically within the Scientific & Technical Instruments industry. The company is a prominent player in the laser and photonics market, providing engineered materials, lasers, and optoelectronic solutions for various applications including telecommunications, industrial manufacturing, and aerospace.
Basic Financials (As of 2026-03-23)
- Market Cap: $47.55 Billion
- P/E Ratio (TTM): 251.12
- Forward P/E: 34.16
- EPS (TTM): $1.01
- Forward EPS: $7.42
- Revenue (TTM): $6.29 Billion
- Profit Margin (TTM): 4.66%
- Beta: 1.91 (Indicates high volatility compared to the broader market)
Financial Statement Analysis
Income Statement
Coherent has demonstrated consistent top-line revenue growth over the last five quarters (from $1.43B to $1.69B). However, profitability has been inconsistent. The company experienced a net loss in the quarter ending 2025-06-30 ($95.6M loss), driven by unusual items and high restructuring costs. While net income has recovered since then ($146.7M in Q4 2025), net margins remain thin at 4.66%.
Balance Sheet
The company's liquidity position appears stable, with a Current Ratio of 2.25, indicating the ability to cover short-term liabilities. However, the capital structure is heavily leveraged, with a Debt-to-Equity ratio of 39.90. Total Debt stands at approximately $3.55B. Investors should monitor this debt load, especially given the interest expense burden reflected in the income statement.
Cash Flow
Free Cash Flow (FCF) has been deteriorating in recent quarters, turning negative in the second half of 2025 (-$95.7M for the quarter ending 2025-12-31). This is partly due to significant capital expenditures (e.g., $153.6M in Q4 2025) and changes in working capital (specifically inventory buildup). Consistent negative FCF in an environment of high debt is a primary area of concern for long-term sustainability.
Actionable Insights & Risks
Risks
- High Financial Leverage: The debt-to-equity ratio and consistent interest expenses place pressure on net income and cash flow, especially if market conditions tighten.
- Cash Flow Volatility: The recent trend of negative FCF, driven by inventory accumulation and ongoing capital investment, reduces the company's financial flexibility.
- High Volatility: With a Beta of 1.91, COHR is significantly more volatile than the market, making it prone to sharp price swings, particularly following earnings reports.
- Earnings Quality: The wide gap between TTM P/E (251) and Forward P/E (34) suggests that the market is pricing in a massive turnaround in earnings growth. Any failure to hit these forward EPS projections could trigger significant downward pressure on the stock.
Insights for Traders
- Monitor Debt Management: Watch for any signs of debt reduction or refinancing initiatives in upcoming quarterly filings.
- Revenue vs. Profit: While revenue growth is healthy, traders should prioritize improvements in profit margins and a return to positive Free Cash Flow as key catalysts for sustained price appreciation.
- Entry/Exit: Given the high beta, consider utilizing technical indicators to time entries to avoid buying during peak volatility, especially ahead of quarterly releases.
Summary Table of Key Metrics
| Metric | Value |
|---|---|
| Market Cap | $47.55B |
| Forward P/E | 34.16 |
| Revenue (TTM) | $6.29B |
| Profit Margin | 4.66% |
| Debt to Equity | 39.90 |
| Current Ratio | 2.25 |
| Beta | 1.91 |