Coherent: A Buy Driven By Robust AI Datacenter Optics Demand
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Himalayas Research1.1K FollowersFollow5ShareSavePlay(10min)CommentsSummaryCoherent is rated Buy, driven by robust AI data center optics demand and a defensible InP manufacturing moat.COHR revenue is projected to grow from $5.8B in FY2025 to $10.6B in FY2028E, with EPS compounding at a 45% CAGR.Margin expansion is underpinned by 6-inch InP wafer transition, higher ASP transceivers, and operating leverage, targeting >42% adjusted gross margin long-term.Optionality in SiC, CPO, OCS, and a new Apple supply deal provide diversified growth, while balance sheet deleveraging and capital-light strategy support valuation. Lebazele/iStock via Getty Images Coherent (COHR) is positioned at the intersection of three technology pillars underpinning the AI infrastructure buildout—compound semiconductors, photonics, and optical networking. The company was able to execute a sharp turnaround following a difficult downcycle in FY2023-FY2024, which sawThis article was written byHimalayas Research1.1K FollowersFollowBuyside analyst covering global stocks on Seeking Alpha since 2018. I've been investing personally and professionally across major equity markets for about a decade. Subscribe for equity research and trading ideas.Opinions are not qualified investment or trading advice. Please do your own due diligence.Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Disclaimer: All research, figures, and interpretation are provided on a best-effort basis only and may be subject to error. Any view, opinion, or analysis does not constitute as investment or trading advice; please do your own due diligence.Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.