Cohu (COHU) Stock Forecast & Price Target

Cohu is well-positioned in the semiconductor equipment industry, with a strong market share in test handlers and test sockets, and a niche position in ATE. The company has a unique automotive focus and has been benefiting from the growth of autonomous driving and electric vehicles. While there may be near-term headwinds due to the cyclical correction in auto/industrial, mobile, and computing, we see a positive outlook for Cohu in the long-term driven by its expansions into new markets and its strong positioning in the industry.

Cohu is expected to have an improved outlook in 2026, with management projecting a 20-25% increase in revenue, driven by growth in their HPC systems and an increase in recurring revenues. The company also has an opportunity to grow their contactor business by cross-selling to existing customers, with a potential $160 million in additional revenue. However, there is a risk of slower recovery in customer test utilization, which could lead to underperformance in the systems segment. Despite these challenges, the company's long-term prospects for synergy generation and product development are viewed positively, leading to an increase in price target to $33.