Is Coherent Corp. (COHR) the Long-Term Stock Analysts Are Betting On?

In a market brimming with volatility and shifting priorities, Coherent Corp (COHR) has emerged as a focal point for investors seeking to capitalize on the rise of advanced manufacturing, photonics, and laser technology. But is the company truly positioned to deliver long-term outperformance, or are analysts’ mixed signals a red flag? Let’s dissect the data.

The Analysts’ Dilemma: Buy, Hold, or Wait?

The consensus rating for COHR as of early 2025 is a “Moderate Buy”, reflecting cautious optimism. Of the 13 analysts covering the stock, 9 recommend a “Buy” or equivalent, while 4 advise a “Hold”. Notably, no analysts have issued a “Sell” rating—a sign that skepticism is muted but not absent.

The price target range, however, tells a more complex story. The highest target of $76 (Raymond James) contrasts starkly with the lowest of $35 (Northland Securities), creating a 120% spread. This divergence underscores deepening disagreements over COHR’s valuation. For context, the stock’s recent closing price of $52.12 sits below the average 12-month target of $56.36, implying a modest +8% upside—but only if the bulls are right.

Growth Metrics: Outpacing the S&P 500

Analysts are banking heavily on COHR’s earnings and revenue trajectories. For 2025, consensus EPS estimates sit at $3.46, a staggering 107% increase from 2024’s $1.67. This growth rate dwarfs the S&P 500’s projected 8.6% EPS expansion, a gap that could amplify COHR’s appeal to growth-oriented investors.

Revenue is also strong, with 2025 estimates hitting $5.7 billion—a 21% YoY rise—driven by demand in networking, materials processing, and laser systems. Even 2026 projections suggest $6.24 billion in revenue, a 9.6% increase, signaling sustained momentum.

Sector Leadership or Overvaluation?

COHR’s operating margin of 3.7% (TTM) and negative ROE (-2.1%), however, raise red flags. These metrics suggest the company is struggling to convert top-line growth into profitability—a challenge common in capital-intensive industries like photonics. Competitors like Amphenol (AMP) and TE Connectivity (TEL) boast healthier margins, which could limit COHR’s ability to sustain premium valuations.

Analysts also highlight risks tied to supply chain disruptions and macroeconomic headwinds, which could crimp revenue growth. While COHR has historically beaten EPS estimates—delivering a 41% surprise in its December 2024 quarter—revenue surprises have been more muted, leaving room for disappointment.

A Sector Leader, But at What Cost?

COHR’s $14.7 billion market cap and 26,157 employees reflect its scale, but its valuation relative to peers is contentious. While its consensus rating of 2.69 (on a 1–4 scale) edges above the Business Services sector average of 2.64, the stock’s price-to-earnings (P/E) ratio of 15x (based on 2025 estimates) sits near the midpoint of its sector.

The Bottom Line: A Compelling, but Risky, Story

COHR’s long-term promise hinges on executing its growth strategy while addressing profitability challenges. The 2025 EPS growth of 107% is a game-changer, but it’s a high bar to clear consistently. Investors should weigh the $76 price target (Raymond James) against the $35 downside (Northland Securities) and consider the stock’s volatility.

Final Call: For aggressive investors, COHR’s potential as a leader in photonics and advanced manufacturing makes it a “Moderate Buy”, but only for those willing to tolerate uncertainty. The stock’s +8% upside to the average target offers a cautious entry point, yet its operating margin struggles and valuation risks demand vigilance. As the saying goes: Buy the rumor, sell the news—but here, the “news” could swing wildly.

In the end, COHR isn’t just a stock; it’s a bet on the future of technology-driven industries. For now, analysts are split—but the data suggests this is a story worth watching closely.