Live: Will Coherent (COHR) Surge After Q4 Earnings?

We’ve included Coherent in our $500,000 AI Portfolio at 24/7 Wall St. and are positive long-term on the company. So let’s look at this quarter from the bull/bear framework.

Bullish!

• Revenue guidance came in light but EPS fro next quarter at the midpoint matched Wall Street’s expectations.
• The company is beginning its 1.6T module ramp, which should be a large revenue driver in 2026.
• Coherent emphasized gross margin expansion during the year, they’re clearly focusing on their opportunities in the AI space in an outsized way.

Bearish!

• The company had run up 121% since April 21st. If a stock runs that fast and issues disappointing guidance, it’s going to fall almost 100% of the time.
• While Coherent’s networking business is doing great, its laser business continues to post middling results. The materials business is also seeing significant revenue declines.

Coherent’s conference call starts at 5 p.m., we’ll listen in and post notes.

Shares are currently down 19%.

One interesting note is that guidance excludes $20 million for assets being sold off. You wonder if that revenue was included whether the reaction after hours would have been this severe.

In their release Coherent highlighted:

• First Revenue from 1.6T Datacom Transceivers. Commenced revenue shipments of our 1.6T transceiver products, enabling high-performance AI datacenter applications.

The growth of 800g and 1.6T modules is part of the bull case for Coherent so its encouraging to see revenue beginning to flow from these products. We’d expect more commentary on this during the company’s earnings call.

Jim Anderson, CEO, said, “We delivered a strong fiscal 2025 with revenue growth of 23% and non-GAAP EPS expansion of 191%. We believe we are well positioned to continue to drive strong revenue and profit growth over the long-term given our exposure to key growth drivers such as AI datacenters. We also continue to optimize and focus our portfolio with the recently announced agreement to sell our Aerospace and Defense business. As we enter a new fiscal year, we are excited about the growth opportunities ahead of us.”

COHR | Coherent Corp. Q4’25 Earnings Highlights:

• Adj. EPS: $1.00 []; UP +96% YoY
• Revenue: $1.53B (Est. $1.51B) []; UP +16.4% YoY
• Adj. Gross Margin: 38.1% []; UP +220 bps YoY
• Net Income: $0.19B []; UP +73.6% YoY
• GAAP Loss Per Share: $(0.83)
• Operating Income: $0.28B (Est. $0.28B) []; UP +35.8% YoY

Q4’25 Outlook:

• Revenue: $1.46B to $1.60B []
  • Excludes approximately $20 million in Aerospace and Defense revenue expected after the sale closes.
  • Continued focus on AI datacenters and other growth drivers.

Q4 Segment Performance:

• Networking Revenue: $0.95B (Est. $0.95B) []; UP +39% YoY
• Materials Revenue: $0.24B (Est. $0.24B) []; DOWN -15.5% YoY
• Lasers Revenue: $0.35B (Est. $0.35B) []; UP +8.5% YoY

Other Key Q4 Metrics:

• Adj. Operating Income: $0.28B (Est. $0.28B) []; UP +35.8% YoY
• Adj. Operating Expenses: $0.31B []; UP +14.2% YoY
• R&D Expenses: $0.16B []; UP +23.0% YoY
• Free Cash Flow: $0.63B; UP +16.1% YoY
• Effective Tax Rate: 36.9% (vs. 11.1% YoY)
• Debt Repayment: Approximately $437 million repaid in FY25.

CEO Commentary:

• Jim Anderson: “We delivered a strong fiscal 2025 with revenue growth of 23% and non-GAAP EPS expansion of 191%. We believe we are well positioned to continue to drive strong revenue and profit growth over the long-term given our exposure to key growth drivers such as AI datacenters. We also continue to optimize and focus our portfolio with the recently announced agreement to sell our Aerospace and Defense business. As we enter a new fiscal year, we are excited about the growth opportunities ahead of us.”

CFO Commentary:

• Sherri Luther: “In fiscal 2025, in addition to strong revenue growth, we achieved gross margin expansion of 358 basis points on a year-over-year basis. Revenue growth and margin expansion drove improvement in our operating cash flow, which enabled us to repay approximately $437 million of our outstanding debt for the full fiscal year.”

Coherent shares have bounced slightly off the bottom but are trading down about 16% as of 4:28 p.m. ET. It looks like the company is about to give up a sizable percent of its recent gains.

If you own Coherent you’re probably wondering why shares are dropping.

The company beat revenue expectations last quarter ($1.53 billion) and EPS expectations ($1 in adjusted EPS vs. $.92 of expectations).

The problem is the revenue guid for next quarter is $1.46 billion to $1.60 billion, at the midpoint that’s lower than Wall Street expectations of $1.55 billion.

When a stock has run up as much as Coherent has, even a ‘small’ miss on guidance like this is usually punished severely.

Guidance is below expectations and shares are down 15% after hours.

Coherent will report after the bell today. We expect their earnings should hit newsires at about 4:15 p.m. ET.

As a reminder, new updates will post on this live earnings blog automatically. You don’t have to do anything except leave this page open.

Here’s where Wall Street consensus stands headed into earnings:

Q4 FY2025 Consensus Estimates:

• Revenue: $1.51 billion
• EPS (Normalized): $0.92

Full-Year FY2025 Estimates:

• Revenue: $5.79 billion
• EPS: $3.50

With Coherent shares having seen a strong run, they’ll likely need to top these numbers by a decent margin for shares to rise tomorrow.

Free Access to Our $500,000 AI Portfolio

One more note before Coherent reports. We’ve added the company to the $500,000 Portfolio we manage for free as part of our AI Investor Podcast.

If you’re looking for the best AI investing ideas that are seeing sales boom alongside Coherent, you’ll want to catch our latest episodes. We’ve embdedded a recent episode below, you can listen in to recent news about the AI space and also subscribe if you’d like to get alerts for future episodes in the future.

Consensus Rating:

• 19 analysts
• 11 Buy | 5 Hold | 3 Strong Buy
• Net rating: Buy

Price Targets:

• Average: $105.06
• High: $127.00 | Low: $77.00
• Current Price: $118.25
• Implied downside to average PT: –12.5%

Despite outperforming targets, analysts remain cautious on valuation — with Coherent trading above its consensus price, execution and outlook must remain strong to support the multiple.

Earnings History

After two quarters of strong upside reactions, COHR has developed breakout momentum, particularly when EPS surprise exceeds 20%+.