Coherent, Inc. (COHR)

FairStock Score: 27/100 — RISKY

Key Financials

Strengths

• Generates $130 million in annual free cash flow (0.3% yield on market cap)
• Conservative balance sheet with debt-to-equity of just 0.40, providing financial flexibility
• Altman Z-Score of 4.6 confirms minimal bankruptcy risk and strong solvency
• Revenue growth of 17.5% demonstrates strong top-line momentum
• Established organization with 30,216 employees providing operational scale

Concerns

• Trades significantly above Graham Number ($32) with negative 745% margin of safety—limited downside protection

AI Analysis

Coherent, Inc. is a mid-cap technology company valued at $43.1 billion. The business generates $6.3 billion in annual revenue with a 2.3% net margin and $130 million in free cash flow. From a quality standpoint, Coherent, shows healthy Altman Z-Score of 4.6 and modest 3% ROE. On valuation, the stock is commanding a steep 339.9x multiple, with trades far above its Graham Number ($32) with no margin of safety. Growth dynamics show revenue growing at 17.5% and profit growth of 41.9%. Our composite FairStock Score of 36/100 reflects below-average fundamentals overall. Investors should weigh the business quality against the current price and their own margin of safety requirements.

Bull Case

Coherent,'s 17% revenue growth trajectory could accelerate as it captures additional market share in the technology sector. With $130 million in annual free cash flow (0.3% yield), management has ample capital for buybacks, dividends, or accretive acquisitions.

Bear Case

At 340x earnings, any growth disappointment triggers rapid multiple compression—a 20% earnings miss plus multiple contraction to 20x implies 40%+ downside. Regulatory changes, input cost inflation, or demand normalization represent underappreciated risks that could materially impact forward estimates.

Data from SEC filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer