Value
3.8/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 0.0 |
| P/S | 3.6 |
| EV/EBITDA | 0.0 |
| Fwd P/E | 2.8 |
| PEG | 10.0 |
| Analyst target | 4.0 |
- ▸Forward P/E: 39.3x
- ▸PEG: 0.13
COHR · Why this verdict
Why Coherent (COHR) is rated BUY WAIT
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictBUY WAIT
Overall score6.0/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Four consecutive earnings beats and 20% revenue growth demonstrate execution momentum, but free cash flow is negative despite reported profitability, the stock trades at a premium multiple with only 4.2% headroom to resistance, and sole-source supplier exposure introduces operational fragility — the risk/reward is unfavorable at current levels.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The company has beaten consensus estimates in all four of the last four quarters with an average upside surprise of roughly 7%, alongside revenue growth of 20% year over year, demonstrating consistent top- and bottom-line execution. Earnings | Beat rate stays at 4 of 4 and revenue growth remains above 15% year over year over the next four quarters. | →Stable |
| CounterThe most recent quarter's upside surprise narrowed to just 1.1%, the smallest in the streak, which may indicate that execution is beginning to moderate as the business scales and consensus closes the gap. | ||
Free cash flow is negative relative to reported net income — at negative 42% of earnings — a red flag indicating that reported profits are not converting into cash, constraining financial flexibility for debt reduction, reinvestment, or shareholder returns. Quality | Free cash flow turning positive and FCF-to-net-income conversion reaching at least 50% for 2 consecutive quarters would signal that earnings quality is improving meaningfully. | →Stable |
| CounterA Piotroski F-Score of 8 out of 9 reflects broad balance-sheet strength, and negative free-cash-flow-to-earnings in a high-growth phase may reflect timing effects or large non-cash items rather than a structural disconnect between accounting and economic reality. | ||
At a forward price-to-earnings multiple of 50.6 times, the stock screens as expensive, and with only 4.2% headroom to the resistance take-profit level and a reward-to-risk ratio of 0.60-to-1, the near-term geometry does not compensate for the risk taken. Value | A meaningful re-rating — either through earnings multiple compression or a take-profit target revision implying more than 15% upside from current levels — would be required before the setup is actionable. | ↓Deteriorating |
| CounterA PEG ratio of 0.18 suggests the multiple may be justifiable given the growth rate; if earnings continue to beat and the 20%-plus growth profile is sustained, the premium valuation could persist for an extended period. | ||
The company relies on sole-source or limited-source suppliers for key inputs, meaning a disruption to any one of those supply relationships could materially impair production without a ready substitute and without lead time to qualify an alternative. Bear case | Progress toward supplier diversification — evidenced by management commentary or 10-K risk-factor language reducing sole-source references — would lower this operational risk. | ↑Improving |
| CounterSole-source relationships are common in precision manufacturing and can reflect technical complexity or negotiated exclusivity rather than fragility; the strong Piotroski F-Score suggests the supply chain has not yet produced financial impairment. | ||
The company has beaten consensus estimates in all four of the last four quarters with an average upside surprise of roughly 7%, alongside revenue growth of 20% year over year, demonstrating consistent top- and bottom-line execution.
→StableEarnings
- Expectation
- Beat rate stays at 4 of 4 and revenue growth remains above 15% year over year over the next four quarters.
CounterThe most recent quarter's upside surprise narrowed to just 1.1%, the smallest in the streak, which may indicate that execution is beginning to moderate as the business scales and consensus closes the gap.
Free cash flow is negative relative to reported net income — at negative 42% of earnings — a red flag indicating that reported profits are not converting into cash, constraining financial flexibility for debt reduction, reinvestment, or shareholder returns.
→StableQuality
- Expectation
- Free cash flow turning positive and FCF-to-net-income conversion reaching at least 50% for 2 consecutive quarters would signal that earnings quality is improving meaningfully.
CounterA Piotroski F-Score of 8 out of 9 reflects broad balance-sheet strength, and negative free-cash-flow-to-earnings in a high-growth phase may reflect timing effects or large non-cash items rather than a structural disconnect between accounting and economic reality.
At a forward price-to-earnings multiple of 50.6 times, the stock screens as expensive, and with only 4.2% headroom to the resistance take-profit level and a reward-to-risk ratio of 0.60-to-1, the near-term geometry does not compensate for the risk taken.
↓DeterioratingValue
- Expectation
- A meaningful re-rating — either through earnings multiple compression or a take-profit target revision implying more than 15% upside from current levels — would be required before the setup is actionable.
CounterA PEG ratio of 0.18 suggests the multiple may be justifiable given the growth rate; if earnings continue to beat and the 20%-plus growth profile is sustained, the premium valuation could persist for an extended period.
The company relies on sole-source or limited-source suppliers for key inputs, meaning a disruption to any one of those supply relationships could materially impair production without a ready substitute and without lead time to qualify an alternative.
↑ImprovingBear case
- Expectation
- Progress toward supplier diversification — evidenced by management commentary or 10-K risk-factor language reducing sole-source references — would lower this operational risk.
CounterSole-source relationships are common in precision manufacturing and can reflect technical complexity or negotiated exclusivity rather than fragility; the strong Piotroski F-Score suggests the supply chain has not yet produced financial impairment.
Per-dimension breakdown
Quality
4.6/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 1.6 |
| ROA | 2.1 |
| Gross margin | 3.4 |
| Op margin | 5.4 |
| Net margin | 3.6 |
| Current ratio | 9.9 |
| FCF quality | 0.0 |
| Moat | 6.4 |
| Piotroski F | 8.9 |
- ▸Earnings quality RED FLAG: -42% FCF/NI
- ▸Strong Piotroski F-Score: 8/9
Growth
8.8/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 7.6 |
| EPS growth | 10.0 |
- ▸Strong growth: 20% YoY
Momentum
8.9/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.5 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 9.0 |
| Volume | 9.8 |
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
7.0/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 6.8 |
| Analyst rating | 7.5 |
| Price target | 6.6 |
- ▸LLM news sentiment: +0.35 (n=10)
Insider
7.3/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 10.0 |
| notable moves | 7.0 |
- ▸Negligible insider selling — $306,680 (0.000% of mkt cap)
- ▸Institutions accumulating
Peer rank
3.7/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 0.3 |
| quality rank | 2.1 |
| growth rank | 8.2 |
- ▸Industry growth leader
Technical
3.2/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 1.4 |
| support resistance | 2.1 |
| 52w position | 6.2 |
| gap | 3.0 |
- ▸Extreme gap up (9.0%) - may pull back
Risk (lower is worse)
5.3/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 7.3 |
| days to cover | 9.0 |
| volatility | 0.0 |
| put call | 9.3 |
| implied vol | 0.0 |
| beta | 3.0 |
| debt equity | 8.8 |
- ▸High IV: 112%
- ▸Concentration risks: 1 HIGH, 1 MED (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
6.8/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 6.0 |
| news activity | 8.0 |
- ▸Perfect beat streak: 4Q
- ▸Earnings in 0 days
How the verdict was assembled
Engine trigger
Earnings in 0 days. Wait until post-earnings.
Engine technical detail
verdict_path:
L3:NEWS_BLOCKPassed (5)
- MOMENTUM:8.9>=5.5
- INSIDER:OK
- NEWS_BOOST:EARNINGS:0.60
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- ASYMMETRY:-0.0=NEGATIVE
- EARNINGS_PROXIMITY:0d<=7d
Warning (1)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
-0.01
Upside
-0.1%
Downside
15.0%
Sizing output
STARTER
SetupBreakout — Golden cross, above all MAs, RSI 56, MACD bullish
EdgeNo clear edge — No clear edge identified
SuitabilityAggressive — Beta 2.11>1.3
Investment implication
A recent news event triggered an L3 news-block on the verdict path. Trigger: Earnings in 0 days. Wait until post-earnings. The 10-dimension scores remain Momentum at 8.9 (strongest), but ASYMMETRY:-0.0=NEGATIVE also fails — the news block is the proximate trigger, not the sole driver.
The strongest dimensions are Momentum at 8.9, Growth at 8.8, and Insider at 7.3; the weakest are Technical at 3.2, Peer rank at 3.7, and Value at 3.8. The V9 engine flagged 2 failed gates with 1 warning, producing an asymmetric reward-to-risk of -0.01 and an engine sizing output of STARTER.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Perfect Beat Streak Growth
Trip ifEPS surprise falls below 0% for 2 consecutive quarters.
- P2Negative Fcf Earnings Quality Red Flag
Trip ifFree cash flow turns positive and FCF-to-net-income conversion rises above 50% for 2 consecutive quarters.
- P3Rich Valuation Thin Upside
Trip ifForward P/E multiple compresses below 35x, or the take-profit target is revised to imply more than 15% upside from $413.84.
- P4Sole Source Supplier Dependency
Trip ifThe company discloses at least 2 additional qualified suppliers for previously sole-sourced components in a public filing, reducing concentration risk.