Cohu (COHU) Valuation in Focus After Major Investor Trims Stake and Financial Challenges Persist

Victory Capital Management recently trimmed its stake in Cohu (COHU) by nearly 30%, just as the semiconductor company reported another quarter of ongoing financial challenges and delivered cautious guidance for the future.

See our latest analysis for Cohu.

Cohu’s 20% share price rally over the last month has caught investors’ attention, even as the company remains down 9.5% year-to-date. Recent momentum comes alongside a narrowing quarterly loss and a modest rise in sales. However, long-term total shareholder returns remain firmly negative: -15% over one year and -35% over three years. This reflects a story of short-term optimism challenging longer-term underperformance and shifting risk perceptions in a tough semiconductor landscape.

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With shares rebounding despite persistent losses and an influential investor reducing exposure, the key question is whether Cohu is undervalued at these levels, or if the market already anticipates future improvement. Could this be a real opportunity, or is growth already priced in?

Most Popular Narrative: 16% Undervalued

With a fair value of $28.50 cited by the most popular narrative, compared to the last close of $23.93, there’s a notable gap between consensus expectations and the current market price. This sets up a debate over whether Cohu’s improving demand picture could close that gap.

The push towards automation, data analytics, and AI-driven yield/process optimization through Cohu's software suite (DI-Core, Tignis) supports an ongoing shift to higher-margin, recurring software and services revenue. This is expected to enhance long-term net margins and earnings stability.

Read the complete narrative.

Want to know how much future software revenue growth is built into this fair value? Key assumptions about margin improvements and automation are driving the narrative’s math. Which projections set that bold price target? Dive in to uncover the catalysts that have analysts betting on a turnaround.

Result: Fair Value of $28.50 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, the narrative could unravel if Cohu's customer concentration or manufacturing shifts result in sudden revenue disruptions or operational setbacks.

Find out about the key risks to this Cohu narrative.

Build Your Own Cohu Narrative

If you think the consensus misses the mark or you prefer hands-on research, you can dig into the numbers and develop your own view in just a few minutes. Do it your way

A good starting point is our analysis highlighting 2 key rewards investors are optimistic about regarding Cohu.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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