Cohu (COHU) Stock Forecast & Price Target

Cohu is supported by a clear mix shift toward higher-margin, recurring consumables and software, with recurring revenue reaching $76M or 60% of sales in the March ’26 quarter and a current attach rate of roughly 35%+ implying meaningful cross-sell upside. The company’s HPC opportunity has materially expanded, with expected sales of $80-100M this year, +62% Q/Q systems order growth driven by a $30M Eclipse follow on, and 12 customers in the pipeline, while HBM inspection is expected to double to about $20M in CY26. Strong 1Q26 results—revenue of $125.1MM, non-GAAP gross margin of 46.5%, and 2Q26 guidance of $144.0MM—along with improving utilization rates around 78% and planned OpEx in the low-$50M/Q range support leverage as growth outpaces spending.

Cohu is facing a weak fundamental setup because its Semi Systems sales were flat quarter over quarter at $49 million in the March '26 quarter, signaling that recent growth may be stalling after post-acquisition synergies were largely realized. The company also remains exposed to low test-cell utilization, a prolonged inventory digestion period in auto, industrial, mobile, and compute, and management’s own guidance implies only $144.0 million of revenue with lower gross margin at 44.0% due to a heavier mix of systems. With downside risks from slow customer recovery, potential operating losses, and valuation pressure tied to current debt levels, the stock’s outlook remains negative.