Coherent Corp (COHR) Stock Forecast & Price Target

Coherent Corp has demonstrated robust growth with a 23% year-over-year increase in Data Center sales and a projected 10% sequential growth in Datacom sales due to improved laser supply. The company's operating margin has shown strong improvement, rising to 19.5%—an increase of 150 basis points quarter-over-quarter and 230 basis points year-over-year—largely attributed to effective cost management and enhanced operating leverage. Additionally, Coherent's revenues grew by 17% year-over-year in 1Q26, surpassing forecasts by 5%, indicating a positive trajectory supported by strong demand in its Data Center and Communications segments.

Coherent Corp faces a challenging outlook as its product innovation and unit growth struggle to outpace annual average selling price (ASP) declines, which may adversely impact its financial results and overall standing. Although the company has reduced its total outstanding debt to $3.31 billion and improved its debt leverage ratio to 2x, concerns remain regarding the competitive landscape characterized by rapid technological changes and new entrants that could undermine its market position. Furthermore, Coherent's performance has lagged behind industry peers, with a year-to-date underperformance of 22% compared to notable gains from competitors such as Lumentum and Fabrinet, raising apprehensions about its future revenue potential and stock value.