Evaluating Coherent (COHR) Valuation Following Recent Share Price Momentum

Coherent (COHR) shares have shown some momentum lately, catching investor attention after a series of steady gains over the past month. The company’s stock price climbed around 10% during that period, prompting fresh looks at its current valuation.

See our latest analysis for Coherent.

Coherent’s recent share price surge adds to an already strong year. Momentum has accelerated in recent weeks, bringing its year-to-date share price return up to nearly 20%, with a total shareholder return over the past year of 24%. That combination of short-term gains and robust long-term performance suggests investors are responding to renewed optimism about the company’s future, perhaps reassessing its growth prospects and risk profile.

If Coherent’s upward trajectory has you curious about what else is gaining ground, this is the perfect moment to broaden your search and discover See the full list for free..

But with shares climbing higher, is Coherent still trading at an attractive valuation, or have recent gains brought its price in line with future expectations? Investors must ask whether there is genuine upside left or if the market has already priced in the company’s next chapter.

Most Popular Narrative: 4.5% Overvalued

With Coherent closing at $120.20 per share, the most widely-followed narrative consensus pins its fair value slightly lower. This highlights a modest disconnect between recent optimism and calculated fundamentals and sets the stage for a closer look at the drivers and expectations supporting this view.

The ongoing expansion of AI datacenter infrastructure and high-performance computing is propelling structural growth in demand for advanced optical transceivers (800G, 1.6T, and beyond), optical circuit switches, and related photonics components. This is fueling robust sequential order growth and sustained revenue momentum in Coherent's datacom and communications business.

Read the complete narrative.

What is the secret sauce behind Coherent’s punchy valuation? The narrative leans into aggressive profit turnaround forecasts and a major boost in margins, all hinging on future tech demand and transformation. Want a peek at the precise assumptions and bold targets that justify this price? Find out what really powers this fair value outlook.

Result: Fair Value of $115 (OVERVALUE D)

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

However, sustained competition from low-cost rivals and potential revenue volatility in key segments could quickly challenge Coherent’s bullish narrative.

Find out about the key risks to this Coherent narrative.

Another View: Discounted Cash Flow Points to Upside

While the consensus narrative sees Coherent as 4.5% overvalued based on future earnings expectations, our SWS DCF model suggests the shares may actually be undervalued. The stock is currently trading about 7% below its estimated fair value of $129.35. Could the longer-term cash flow picture be more attractive than headline multiples indicate?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Coherent for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Coherent Narrative

There’s always room for your own perspective. If you’re unconvinced by the latest consensus, dive into the numbers and shape your own thesis 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 Coherent.

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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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