| Factor | Score | Distribution | Value | Avg | Rank |
|---|---|---|---|---|---|
Valuation | 10 | 73.6x | 17.8x | Bottom tier | |
Growth | 93 | 22.5% | 7.1% | Top tier | |
Quality | 40 | 7.0% | 4.5% | Bottom tier | |
Safety | 68 | 1.0x | 2.6x | Top tier | |
Capital Return | 77 | — | 2.12% | Top tier | |
Momentum | 67 | 229.5% | 2.9% | Top tier | |
Sentiment | 68 | 13 | 3 | Top tier |
Estimates — analyst targets and a simplified DCF, not investment advice.
Ten ratios that matter, each compared against its sector median and average — so you can see whether a number is rich or cheap relative to peers in the same sector.
Coherent is a global company specializing in photonics technologies that enable the transmission, generation, and processing of optical signals within AI data centers, telecommunications networks, and industrial applications. The company generates revenue from 800G and 1.6T transceivers, Indium Phosphide lasers and components, OCS systems, CPO and NPO solutions, as well as ZR and ZR+ components and communications, amplifiers, and optical systems. The data center and communications segment accounted for 79% of total revenue in Q4 fiscal 2026, while the industrial segment was approximately flat on a comparable basis after growth in semiconductor and display equipment offset weakness in broader industrial markets.
According to EDGAR data, Q4 fiscal 2026 revenue was approximately $2.0 billion, gross profit was $787.1 million, and net income was $240.5 million; the earnings call indicates more precise revenue of $2.05 billion, up 13% sequentially and 34% year over year. Non-GAAP gross margin reached 40.2%, up 66 basis points sequentially and 215 basis points year over year, while non-GAAP operating margin reached 21.8% and adjusted diluted earnings per share reached $1.74, representing 74% year-over-year growth. Within the company’s main growth engine, data center revenue increased 24% sequentially and 66% year over year, while communications revenue grew 11% sequentially and 56% year over year.
In fiscal 2026, Coherent reported record revenue of $7.12 billion, up 23%, EDGAR gross profit of $2.7 billion, net income of $805 million, and earnings per share of $4.12. Adjusted gross margin reached 39.4%, up 152 basis points, and adjusted operating margin increased to 20.5% from 17.8% in fiscal 2025, while adjusted earnings per share rose 59% to $5.61. The company reduced its leverage ratio to 0.7 times from 2 times at the end of fiscal 2025 after repaying $513 million of debt.
The analyst consensus is “Buy,” with an average target of $390.38, a high of $455, and a low of $230; the average is below the 52-week range high of $440, while the high target is slightly above that peak. The $225 spread between targets reflects significant disagreement over the value of AI growth and the execution risks of expansion, and the available data do not provide a valid earnings multiple to add a second valuation anchor.
Figures in the text are as of 2026-09-02; the live price is shown at the top of the page.
The biggest driver is the data center and communications segment, which accounted for 79% of Q4 fiscal 2026 revenue. Data center revenue increased 66% year over year, while communications revenue rose 56% during the same period. Management expects most of the path toward exceeding $3 billion in quarterly revenue by the end of fiscal 2027 to come from 800G and 1.6T devices, OCS systems, and CPO and multi-rail solutions.
Management said on August 12, 2026 that Indium Phosphide capacity, rather than assembly and testing capacity, is the main constraint on transceiver growth. Indium Phosphide laser output increased 80% year over year in the quarter ended June 2026, and these lasers are used in 800G and 1.6T devices. The company is targeting a year-over-year doubling of capacity by the end of Q1 fiscal 2027, followed by another more than doubling by the end of calendar 2027.
PhotonLink is an integrated optics platform that covers light generation, beam shaping, transmission, detection, and reconversion of the signal into electrical form for an XPU or switch ASIC. The platform supports CPO, NPO, and other forms of optical integration, combining Coherent lasers, external laser modules, isolators, fibers, and SiPho components within a broader solution. The platform was scheduled to be unveiled on September 21, 2026, with revenue from related products expected to begin in Q2 fiscal 2027.
Automated analysis for informational purposes only — not investment advice.
Adjusted gross margin reached 40.2% in Q4 fiscal 2026, up 66 basis points sequentially and 215 basis points year over year. Adjusted operating margin reached 21.8%, compared with 20.3% in the previous quarter and 18% a year earlier. For Q1 fiscal 2027, the company is targeting an adjusted gross margin of between 39.5% and 41.5% and adjusted earnings per share of between $1.85 and $2.05.
No; management said during the August 12, 2026 call that the report of potential U.S. restrictions was speculative as of that date. However, it explained that Coherent could benefit as the largest U.S. supplier of transceivers and that the reports prompted some customers to begin discussions about manufacturing and sourcing options. The company has more than 20 production facilities in the United States, including the Sherman facility in Texas, which manufactures components for transceivers and CPO and NPO applications.
The plan depends on rapidly increasing Indium Phosphide capacity because management said demand absorbs all current capacity and more. Capital expenditures increased to $556 million in Q4 fiscal 2026, compared with $290 million in the previous quarter, with another increase expected in Q1 fiscal 2027. The industrial segment also remained approximately flat, making the stated growth more dependent on continued data center and communications demand and the successful launches of 1.6T, OCS, CPO, and multi-rail.
