Coherent: Right Thesis, Wrong Timing - Why We're Staying At Buy After A 34% Drawdown

Himalayas Research 1.2K Followers Follow Summary Coherent maintains a 'Buy' rating despite a 34% stock pullback, supported by strong execution and upward estimate revisions. Q3 FY26 revenue rose 20.5% Y/Y to $1.81B, with data center & communications up 41% and non-GAAP EPS up 55% Y/Y. COHR's InP transceiver execution, Nvidia partnership, and expanding TAM in CPO/OCS/Apple agreements underpin long-term growth. Key risks include CPO adoption delays, negative FCF until FY27E, customer concentration, and intensifying competition. EschCollection/DigitalVision via Getty Images We revisit our April thesis on Coherent ( COHR ) after a volatile couple of months. To recap, our thesis rested on the fact that COHR was a core supplier of InP-based transceivers with a 4x book-to-bill ratio This article was written by Himalayas Research 1.2K Followers Follow Buyside analyst covering global stocks on Seeking Alpha since 2018. I've been investing personally and professionally across major equity markets for about a decade. Subscribe for equity research and trading ideas.Opinions are not qualified investment or trading advice. Please do your own due diligence. Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Disclaimer: All research, figures, and interpretation are provided on a best-effort basis only and may be subject to error. Any view, opinion, or analysis does not constitute as investment or trading advice; please do your own due diligence. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.