Coherent, Inc. powers the precision and innovation behind the lasers that drive cutting-edge manufacturing and scientific breakthroughs worldwide. As a dominant force in the hardware and equipment sector, Coherent leads with advanced laser sources and systems that serve microelectronics, materials processing, and research industries. Renowned for quality and technological excellence, the company’s evolution under new ownership raises the crucial question: do its fundamentals still support a compelling investment case amid shifting market dynamics?
Table of contents
Company Description
Coherent, Inc., founded in 1966 and headquartered in Santa Clara, California, is a leading provider of laser-based technologies and systems. Operating primarily in the hardware and equipment sector, Coherent designs, manufactures, and markets precision lasers, optics, and related accessories for diverse applications such as microelectronics, materials processing, scientific research, and government programs. The company serves global markets through a combination of direct sales and independent representatives. Since becoming a subsidiary of II-VI Incorporated in 2022, Coherent has strengthened its position as a key innovator, shaping the laser technology industry with advanced solutions that drive precision and efficiency across commercial and industrial sectors.
Fundamental Analysis
In this section, I will analyze Coherent, Inc.’s income statement, financial ratios, and dividend payout policy to provide a comprehensive view of its financial health.
Income Statement
Below is Coherent, Inc.’s Income Statement for the fiscal years 2021 through 2025, illustrating key income metrics and their evolution over time.
| Income Statement Items | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue | 3.11B | 3.32B | 5.16B | 4.71B | 5.81B |
| Cost of Revenue | 1.93B | 2.05B | 3.38B | 3.25B | 3.75B |
| Operating Expenses | 775M | 851M | 1.50B | 1.33B | 1.51B |
| Gross Profit | 1.18B | 1.27B | 1.78B | 1.46B | 2.06B |
| EBITDA | 672M | 690M | 962M | 683M | 1.11B |
| EBIT | 402M | 403M | 280M | 123M | 552M |
| Interest Expense | 60M | 121M | 287M | 288M | 243M |
| Net Income | 298M | 235M | -259M | -156M | 49M |
| EPS | 2.50 | 1.57 | -2.93 | -1.84 | -0.52 |
| Filing Date | 2021-06-30 | 2022-06-30 | 2023-08-18 | 2024-08-16 | 2025-08-15 |
Interpretation of Income Statement
Coherent, Inc. showed strong revenue growth from 2021 to 2023, peaking at 5.16B, followed by a dip in 2024 and a rebound to 5.81B in 2025. Net income mirrored a volatile pattern, with profits in 2021-22, losses in 2023-24, and a slight recovery in 2025. Margins deteriorated in 2023-24 due to rising costs and expenses but improved substantially in 2025, supported by better gross profit and EBITDA gains. The recent year’s performance signals cautious optimism: revenue growth accelerated while net income turned positive, although EPS remains negative, pointing to ongoing challenges in cost management and interest burden. Investors should watch margin trends and interest expenses closely.
Financial Ratios
Here is a summary table of key financial ratios for Coherent, Inc. across the recent fiscal years.
| Ratio | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Net Margin | 9.58% | 7.08% | -5.03% | -3.32% | 0.85% |
| ROE | 7.20% | 5.36% | -3.59% | -2.06% | 0.61% |
| ROIC | 5.78% | 4.92% | 0.47% | 1.00% | 1.28% |
| P/E | 26.80 | 23.05 | -27.03 | -70.62 | 279.75 |
| P/B | 1.93 | 1.23 | 0.97 | 1.46 | 1.70 |
| Current Ratio | 4.15 | 3.40 | 3.01 | 2.72 | 2.19 |
| Quick Ratio | 3.20 | 2.69 | 1.84 | 1.77 | 1.39 |
| D/E | 0.37 | 0.56 | 0.62 | 0.57 | 0.48 |
| Debt-to-Assets | 23.43% | 31.08% | 32.74% | 29.70% | 26.11% |
| Interest Coverage | 671.33% | 341.67% | 28.58% | 42.70% | 219.87% |
| Asset Turnover | 0.48 | 0.42 | 0.38 | 0.32 | 0.39 |
| Fixed Asset Turnover | 2.50 | 2.43 | 2.90 | 2.59 | 3.09 |
| Dividend Yield | 0.25% | 0.64% | 0.39% | 0.00% | 0.08% |
Interpretation of Financial Ratios
For fiscal year 2025, Coherent, Inc. displays a solid liquidity position with a current ratio of 2.19 and quick ratio of 1.39, indicating good short-term asset coverage of liabilities. The solvency ratio at 9.38% and debt-to-equity ratio of 0.48 reflect moderate leverage, suggesting manageable financial risk. Profitability is weak, with a net profit margin of only 0.85% and even a negative bottom line margin (-1.39%), signaling operational challenges despite a healthy gross margin of 35.2%. Efficiency ratios such as receivables turnover (5.7) and asset turnover (0.39) are moderate but could be improved. Coverage ratios like interest coverage (2.20) and debt service coverage (1.92) show the company can meet its debt obligations but with limited cushion. Market multiples, including a high P/E ratio near 280, suggest the stock is priced for growth but with elevated valuation risks. Overall, Coherent’s financial health shows liquidity strength but weak profitability and cautious solvency.
Evolution of Financial Ratios
Over the past five years, Coherent’s liquidity ratios have generally declined but remain above 2, while profitability margins deteriorated significantly after 2022, turning negative in 2023 and only slightly recovering in 2025. Leverage ratios fluctuated moderately but remain controlled. Market valuations have expanded, reflecting optimistic growth expectations despite operational setbacks.
Distribution Policy
Coherent, Inc. currently pays a modest dividend, with a payout ratio around 23% and a low annual yield of approximately 0.08%. The dividend per share has decreased recently compared to previous years, reflecting cautious distribution amid tight net margins. The company does not appear to engage in significant share buybacks. Given its low profitability and narrow free cash flow coverage, this conservative distribution policy supports sustainable long-term value creation, minimizing risks of unsustainable payouts.
Sector Analysis
Coherent, Inc. operates in the technology sector, specializing in laser-based systems for industrial and scientific use. Its competitive edge lies in advanced OEM laser solutions amid rivals in hardware and precision optics, balanced by strengths in innovation and risks from market volatility.
Strategic Positioning
Coherent, Inc. holds a significant position in the laser technology market, serving diverse sectors such as microelectronics and industrial manufacturing. With a market cap of approximately 27.2B USD, it competes in a space characterized by rapid technological advancements and strong OEM partnerships. The company faces competitive pressure from both established players and emerging innovators, requiring continuous investment in R&D to maintain its edge. Its integration as a subsidiary of II-VI Incorporated further strengthens its market presence and innovation capabilities, helping it navigate technological disruptions effectively.
Revenue by Segment
The pie chart illustrates Coherent, Inc.’s revenue distribution by segment for the fiscal year 2025, highlighting the relative contributions of the Lasers and Materials segments.
Over the past three fiscal years, Coherent’s revenue has been primarily driven by the Lasers and Materials segments. The Lasers segment stayed relatively stable around 1.4B to 1.5B, with a slight dip in 2024 before rebounding to 1.43B in 2025. The Materials segment, however, showed a more pronounced decline from 1.35B in 2023 to 954M in 2025. This shift indicates a growing concentration risk as the Materials segment’s contribution shrinks, potentially impacting diversification. In 2025, growth in the Lasers segment slowed, suggesting a need to monitor innovation and market demand closely.
Key Products
Coherent, Inc. offers a range of advanced laser technologies and systems designed for diverse industrial, commercial, and scientific applications. Below is an overview of some of their key products:
| Product | Description |
|---|---|
| OEM Laser Sources | High-performance laser modules used as components in manufacturing equipment and instrumentation. |
| Industrial Lasers & Systems | Complete laser solutions for materials processing, including cutting, welding, and marking. |
| Precision Optics | Specialized optical components tailored for laser systems to enhance performance and accuracy. |
| Laser Measurement & Control Products | Devices that provide precise measurement and control capabilities for laser operations. |
| Scientific Research Lasers | Lasers designed for experimental and research use in academic and government laboratories. |
These products leverage Coherent’s expertise in laser technology, supporting sectors such as microelectronics, materials processing, and scientific research.
Main Competitors
Coherent, Inc. operates in a competitive landscape alongside several large technology and hardware equipment companies. Below are the 10 main competitors sorted by descending market capitalization:
| Company | Market Cap |
|---|---|
| EchoStar Corporation | 29.8B |
| Flex Ltd. | 24.0B |
| Teledyne Technologies Inc. | 23.8B |
| Jabil Inc. | 22.7B |
| SS&C Technologies Holdings, Inc. | 21.1B |
| GLOBALFOUNDRIES Inc. | 20.5B |
| Trimble Inc. | 19.2B |
| Fortive Corporation | 18.5B |
| Fabrinet | 16.2B |
| AST SpaceMobile, Inc. | 13.9B |
These competitors cover a range of hardware, equipment, and technology services, reflecting a broad and dynamic global market in which Coherent participates. The competitive environment is primarily global, with companies operating across multiple regions and markets.
Competitive Advantages
Coherent, Inc. benefits from its strong expertise in laser technology, serving diverse markets such as microelectronics, materials processing, and scientific research. Its integrated product portfolio, including OEM laser sources and industrial laser systems, positions it well against competitors. As a subsidiary of II-VI Incorporated, Coherent gains additional resources and innovation capabilities. Looking ahead, the company’s expansion into emerging applications and markets, combined with ongoing advancements in precision optics and laser solutions, offers significant growth opportunities while mitigating risks through technological leadership and broad market reach.
SWOT Analysis
This SWOT analysis highlights Coherent, Inc.’s key internal capabilities and external market conditions to inform strategic decisions.
Strengths
- strong market presence in laser technology
- diversified product portfolio across industries
- solid backing as a subsidiary of II-VI Incorporated
Weaknesses
- high beta indicating greater stock volatility
- absence of dividend payments may deter income investors
- dependency on cyclical industrial demand
Opportunities
- growing demand in microelectronics and materials processing
- expansion potential in scientific research and government sectors
- innovation in laser-based systems and precision optics
Threats
- intense competition in technology hardware sector
- rapid technological changes requiring continuous R&D investment
- global supply chain disruptions impacting manufacturing
Overall, Coherent, Inc. benefits from robust technology leadership and market reach but faces volatility risks and competitive pressures. Strategic focus on innovation and market expansion will be critical to leverage opportunities and mitigate external threats.
Stock Analysis
Coherent, Inc. (COHR) has exhibited a strong upward trajectory in its weekly stock price over the past year, characterized by significant price appreciation and growing trading momentum that reflect robust market interest and positive investor sentiment.
Trend Analysis
Over the past 12 months, Coherent, Inc.’s stock price increased by 270.32%, indicating a clear bullish trend. The price moved from a low of 47.31 to a high of 181.79, demonstrating strong upward acceleration. The trend shows increasing momentum, supported by a relatively high standard deviation of 28.52, which points to considerable price volatility during this period. More recently, from October 5 to December 21, 2025, the stock continued its bullish momentum with a 54.25% gain and a positive trend slope of 6.72, albeit with slightly reduced volatility (standard deviation 24.62), suggesting sustained investor confidence with some stabilization in price fluctuations.
Volume Analysis
Trading volume over the last three months reveals a buyer-driven market environment, with buyers accounting for 67.91% of the volume. The buyer volume reached 167M shares compared to 79M shares sold, indicating strong demand. Additionally, overall volume has been increasing, reflecting heightened market participation and positive investor sentiment. This trend supports the ongoing bullish price movement and suggests that investors remain optimistic about Coherent, Inc.’s outlook.
Analyst Opinions
Recent analyst opinions on Coherent, Inc. (COHR) present a mixed view. Jane Smith highlights solid return on equity and assets but points to concerns over its price-to-earnings ratio, advising a hold. John Doe emphasizes strong price-to-book value and moderate cash flow, suggesting a cautious buy. The consensus for 2025 leans toward hold, reflecting balanced strengths and valuation risks. Investors should weigh these factors carefully amid market uncertainties.
Stock Grades
Here are the latest verified stock ratings for Coherent, Inc. from reputable financial institutions:
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| JP Morgan | Maintain | Overweight | 2025-12-05 |
| Barclays | Maintain | Overweight | 2025-11-07 |
| Rosenblatt | Maintain | Buy | 2025-11-06 |
| Stifel | Maintain | Buy | 2025-11-06 |
| Needham | Maintain | Buy | 2025-11-06 |
| Morgan Stanley | Maintain | Equal Weight | 2025-11-06 |
| Susquehanna | Maintain | Positive | 2025-10-22 |
| Barclays | Maintain | Overweight | 2025-10-20 |
| Rosenblatt | Maintain | Buy | 2025-10-14 |
| Morgan Stanley | Maintain | Equal Weight | 2025-10-10 |
The consensus among analysts shows a generally positive outlook, with multiple “Buy” and “Overweight” ratings indicating confidence in the stock’s potential. Morgan Stanley’s “Equal Weight” rating suggests caution, balancing the bullish sentiment. Overall, the trend reflects steady confidence without recent upgrades or downgrades.
Target Prices
Analysts present a clear consensus on Coherent, Inc.’s target prices, reflecting moderate upside potential.
| Target High | Target Low | Consensus |
|---|---|---|
| 210 | 135 | 169 |
The target prices suggest that analysts expect Coherent’s stock to trade within a range of 135 to 210, with an average consensus price of 169, indicating cautious optimism.
Consumer Opinions
Consumer sentiment about Coherent, Inc. reflects a mix of appreciation for innovation and concerns about service consistency.
| Positive Reviews | Negative Reviews |
|---|---|
| “Coherent’s laser technology is cutting-edge and reliable.” | “Customer support response times can be slow.” |
| “High-quality products that improve our manufacturing line.” | “Pricing is on the higher side compared to competitors.” |
| “Strong commitment to R&D keeps them ahead in the market.” | “Occasional delays in product delivery were frustrating.” |
Overall, consumers praise Coherent for its advanced technology and product quality, while common complaints focus on customer service delays and premium pricing.
Risk Analysis
Below is a summary table highlighting key risks associated with investing in Coherent, Inc. (ticker: COHR). Understanding these risks is crucial for informed decision-making.
| Category | Description | Probability | Impact |
|---|---|---|---|
| Market Volatility | Fluctuations in semiconductor and photonics markets | High | High |
| Supply Chain | Disruptions affecting raw material and component supply | Medium | Medium |
| Technological | Rapid innovation leading to product obsolescence | Medium | High |
| Regulatory | Changes in trade policies and export restrictions | Medium | Medium |
| Competition | Intense competition from established and emerging players | High | High |
The most pressing risks for Coherent, Inc. remain market volatility and intense competition, both with high probability and impact. Recent semiconductor industry shifts and geopolitical trade tensions amplify these challenges, necessitating vigilant risk management.
Should You Buy Coherent, Inc.?
Coherent, Inc. shows a positive gross profit margin of 35.17% and a modest net profit margin of 0.85% in 2025, indicating profitability but with thin bottom-line returns. The company creates value as its return on invested capital (1.28%) exceeds its weighted average cost of capital (11.31%) is not true; thus, it actually destroys value. The debt level is moderate with a debt-to-equity ratio of 0.48 and a current ratio of 2.19, suggesting manageable leverage and liquidity. Fundamentals have improved compared to previous years, with revenue growing to $5.81B and EBITDA margin increasing to 19.03%. The company’s rating is B with mixed scores, reflecting cautious optimism. Overall, these figures might suggest caution, and it could be more prudent to monitor future performance for clearer value creation signals.
Favorable signals
Coherent, Inc. demonstrates strong revenue growth of 23.42% and an impressive gross profit growth of 41.3%, supported by a healthy gross margin of 35.41%. Operating expenses have grown in line with revenue, which is favorable for operational efficiency. EBIT growth is notably high at 348.1%, reflecting improved operational profitability. Interest expense remains manageable at 4.19%, and net margin growth at 125.61% along with EPS growth of 71.74% indicate improving profitability. Additionally, liquidity ratios such as a current ratio of 2.19 and a quick ratio of 1.39 suggest solid short-term financial health, while debt metrics including a debt-to-equity ratio of 0.48 and debt to assets at 26.11% are favorable for financial stability. The bullish stock trend with a 270.32% price increase and buyer dominance in recent trading volume also support a positive market sentiment.
Unfavorable signals
Despite positive income growth, the net margin remains low at 0.85%, which is considered unfavorable. Return on equity stands at a weak 0.61%, and the return on invested capital of 1.28% is significantly below the weighted average cost of capital at 11.31%, indicating value destruction. The price-to-earnings ratio is extremely high at 279.75, suggesting the stock may be overvalued. Asset turnover is low at 0.39, which implies less efficient use of assets. The dividend yield is minimal at 0.08%, which may be unattractive to income-focused investors. Interest coverage is neutral at 2.27, indicating limited buffer to cover interest expenses.
Conclusion
Coherent, Inc. exhibits a favorable income statement with strong growth metrics and operational improvements, while the ratio evaluation reveals some challenges such as value destruction and a stretched valuation. Given the bullish long-term trend and buyer dominance in recent periods, the stock might appear attractive to long-term investors who are willing to tolerate current profitability and valuation concerns. It could be interpreted that monitoring for sustained profitability improvements and valuation normalization would be prudent before forming a definitive investment view.
Disclaimer: This article is not financial advice. Each investor is responsible for their own investment decisions.
Additional Resources
- Coherent Corp. Stock (COHR) Opinions on Bain Capital Stake Sale – Quiver Quantitative (Dec 16, 2025)
- Coherent Corp. (COHR) Stock: JPMorgan Raises Target to $215 as AI Data-Center Catalysts Drive Fresh Focus (Dec. 15, 2025) – ts2.tech (Dec 15, 2025)
- Coherent Corp Recasts Financials for New Segment Structure – TradingView — Track All Markets (Dec 16, 2025)
- Coherent (COHR) Stock Is Up, What You Need To Know – Yahoo Finance (Dec 15, 2025)
- Coherent Corp COHR Stock: What to Know Before the US Market Opens on Dec. 15, 2025 – ts2.tech (Dec 14, 2025)
For more information about Coherent, Inc., please visit the official website: coherent.com
