SAXONBURG, Pennsylvania, Aug 13, 2026, 09:14 EDT – Coherent (COHR) stock dropped 6% in early trading after the company topped earnings forecasts, but reported a sharp 87% year-on-year decrease in cash flow.
- Coherent shares dropped 6.1% in premarket trading even after the company reported quarterly revenue and profit above estimates.
- Operating cash flow for the fiscal year decreased by 87%, as capital expenditures increased by 150%.
Shares of Coherent Corp. NYSE:COHR dropped 6.1% in premarket trading on Thursday. This decline came after the company reported results that topped forecasts and provided an upbeat outlook. Premarket figures are subject to adjustment ahead of the opening session.
The focus is on cash conversion pressure. Revenue climbed 22.5% in fiscal 2026, but operating cash flow dropped 87.5% to $79.5 million. Additions to property and equipment jumped 150% to $1.10 billion.
The difference is significant following a rapid revaluation. The 8.2% surge on Wednesday increased implied equity value by around $5.30 billion. On Thursday, the suggested drop cut approximately $4.26 billion, calculated with 195.64 million shares in circulation.
| Market reaction | Price | Move |
|---|---|---|
| Tuesday close | $328.57 | — |
| Wednesday close | $355.64 | up 8.24% |
| Thursday premarket, 08:54 EDT | $333.86 | down 6.12% from Wednesday |
| Premarket compared to Tuesday | $333.86 | up 1.61% |
Revenue for the fourth quarter totaled $2.05 billion, surpassing the LSEG forecast of $1.99 billion by approximately 2.8%. Adjusted earnings came in at $1.74 per share, exceeding the expected $1.61 by 8.1%.
| Fourth-quarter measure | Actual | Estimate / prior year | Difference |
|---|---|---|---|
| Revenue | $2.046 billion | $1.99 billion estimate | +2.8% |
| Adjusted EPS | $1.74 | $1.61 estimate | +8.1% |
| GAAP gross margin | 38.5% | 35.7% prior year | +277 basis points |
| Adjusted operating margin | 21.8% | 16.8% prior year | +503 basis points |
Revenue growth was entirely driven by data-center and communications sales, which increased by $596.7 million from the previous year. Industrial sales declined by $80.6 million. This resulted in overall growth of $516.1 million.
| Fourth-quarter segment | Fiscal 2026 | Fiscal 2025 | Year-on-year | Current revenue share |
|---|---|---|---|---|
| Datacenter & Communications | $1.615 billion | $1.018 billion | up 58.6% | 79.0% |
| Industrial | $430.5 million | $511.1 million | down 15.8% | 21.0% |
| Total | $2.046 billion | $1.529 billion | increase of 33.8% | 100% |
As a result, expansion leads to an increased working-capital cost. Inventory at the end of the year jumped 79.5% to $2.58 billion. Receivables increased by 39.3% to $1.34 billion, rising faster than yearly revenue growth.
| Fiscal-year cash measure | 2026 | 2025 | Change |
|---|---|---|---|
| Revenue | $7.118 billion | $5.810 billion | +22.5% |
| Operating cash flow | $79.5 million | $633.6 million | -87.5% |
| Property and equipment additions | $1.103 billion | $440.8 million | +150.2% |
| Operating cash flow less additions | -$1.023 billion | $192.8 million | Negative now |
| Inventory | $2.581 billion | $1.438 billion | +79.5% |
Management anticipates that the investment cycle will enable further growth. Chief Executive Jim Anderson stated: “We enter fiscal 2027 with exceptional customer demand, expanding production capacity, and multiple new growth platforms beginning to ramp.” Coherent
The midpoint for the first quarter suggests sequential growth of roughly 12% in both revenue and adjusted EPS, exceeding analyst forecasts reported by Reuters by 7.5% and 10.2% respectively.
| First-quarter outlook | Company range | Midpoint | Analyst estimate | Midpoint premium |
|---|---|---|---|---|
| Revenue | $2.20-$2.40 billion | $2.30 billion | $2.14 billion | +7.5% |
| Adjusted EPS | $1.85-$2.05 | $1.95 | $1.77 | +10.2% |
| Adjusted gross margin | 39.5%-41.5% | 40.5% | Not disclosed | — |
Wall Street sentiment stays upbeat, though price targets vary. Out of 22 analysts tracked by S&P Global, the consensus stands at Buy with an average target of $405.71. On Thursday, five firms issued new opinions, ranging from Hold to Buy.
| Analyst | Firm | Recommendation | New target | Prior target |
|---|---|---|---|---|
| Meta Marshall | Morgan Stanley | Hold | $375 | $330 |
| Michael Genovese | Rosenblatt | Buy | $500 | $425 |
| Vivek Arya | BofA Securities | Hold | $400 | $400 |
| Christopher Rolland | Susquehanna | Buy | $425 | $250 |
| Ryan Koontz | Needham | Buy | $420 | $380 |
The mean price target suggests a 14.1% increase from the close on Wednesday. However, the latest analyst targets vary widely, from $375 to $500, highlighting divergent views on the scale-up in capacity and its financial impact.
Risks: Demand has the potential to exceed available capacity, which may push up costs and result in shipment delays. If the pace of AI expansion slows, surplus inventory could accumulate. Continued negative cash conversion might also increase financing requirements.
The market open on Thursday will gauge sentiment. Robust orders have backed profits, yet investors are seeking confirmation that those profits convert to cash.
