Coherent Corp (COHR) Stock Forecast & Price Target

Coherent Corp reported a 16% year-over-year revenue increase to $1,529 million in Q4 2025, driven by strong demand in AI data centers and increased telecom revenue, exceeding initial estimates. The company's recurring services revenue is growing at a faster rate than product sales, which is projected to enhance gross margins over the long term, further contributing to its financial strength. Additionally, ongoing capacity expansion initiatives, coupled with the successful introduction of 1.6T transceivers, position Coherent favorably to capture rising market demand and sustain growth in the upcoming years.

Coherent Corp reported F4Q25 revenue and adjusted earnings per share (adj-EPS) that exceeded consensus estimates; however, the adjusted operating margin fell below market expectations, indicating potential profitability concerns. The company's industrial segments, particularly Materials and Lasers, experienced revenue declines both year-over-year and sequentially, suggesting challenges in maintaining product competitiveness against falling average selling prices (ASPs). Additionally, the guidance for F1Q26 points to projected revenue and adj-EPS below consensus, incorporating a revenue headwind from an announced divestment, which further emphasizes the uncertainty surrounding the company's growth trajectory.