Coherent Stock Plunges 16% as Q2 Earnings Fall Short of Expectations

Coherent's (COHR) stock fell 16% after the semiconductor company reported disappointing revenue guidance. The company announced EPS of $1, beating expectations, and revenue of $1.53 billion, up 16% YoY. However, revenue guidance for Q3 was below expectations, overshadowing a strong print from the optical materials and semiconductor concern. The stock has a consensus Strong Buy rating among 15 Wall Street analysts.

July 02, 2025

Coherent Inc. (NYSE: COHR), a leading provider of materials and photonics solutions, saw its stock fall by 16% following the release of its Q2 CY2025 earnings report. The company reported a revenue of $1.53 billion, up 16.4% year-on-year (YoY), which exceeded Wall Street expectations by 1.4% [1]. However, the stock's decline was primarily driven by the company's revenue guidance for the next quarter, which fell short of analysts' estimates.

Coherent's non-GAAP earnings per share (EPS) of $1.00 per share were 8.7% above analysts' consensus estimates, indicating strong profitability [1]. The company's revenue guidance for Q3 CY2025 was $1.53 billion at the midpoint, which was 0.6% below analysts' estimates of $1.54 billion [1]. This disappointing guidance overshadowed the strong Q2 performance.

The company's operating margin decreased to 0.4% from 4.8% in the same quarter last year, while free cash flow was -$1 million, down from $62.41 million in the same quarter last year [1]. Coherent attributed the decrease in operating margin to a reduction in its Aerospace and Defense business, which it recently announced it would sell to private equity firm Advent for $400 million [2].

The sale of the Aerospace and Defense business is expected to close in the current quarter and will be immediately accretive to Coherent's EPS. The company expects first-quarter revenue to be between $1.46 billion and $1.6 billion [2].

Despite the stock's decline, the consensus among 15 Wall Street analysts is a Strong Buy rating, indicating confidence in the company's long-term prospects [3]. The sell-off may present an opportunity for investors to enter the stock at a lower price.

References:
[1] https://finviz.com/news/139956/cohr-beats-q2-sales-expectations-but-stock-drops-169
[2] https://www.benzinga.com/markets/earnings/25/08/47107837/coherent-stock-sinks-on-sale-of-aerospace-defense-business
[3] https://finance.yahoo.com/news/coherent-nyse-cohr-beats-q2-211406808.html