Coherent Stock Dives on Outlook Miss. Analyst Still Sees ‘Bright Spot’ Ahead.

For the fiscal year, which began July 1, Coherent expects to post earnings between $1 a share and $1.50 a share, below Wall Street expectations of $2.45 a share. Revenue estimates of $4.5 billion and $4.7 billion was also below the consensus call of $4.89 billion.

“Our guidance assumes no meaningful improvement in the macroeconomic environment including no meaning improvement in China,” Coherent said in its earnings release.

Shares of Coherent were sinking 31% to $32.62, and were on pace for their largest percentage decrease on record, according to Dow Jones Market Data. The stock has now dropped 7.1% this year.

It wasn’t all bad news for the company. Coherent posted fiscal fourth-quarter earnings of 41 cents a share on revenue of $1.21 billion. Analysts surveyed by FactSet were expecting earnings of 38 cents a share on revenue of $1.15 billon.

Coherent also said that its guidance excluded several hundred million dollars
of additional revenue related to the “recent surge in demand for Datacom transceivers for AI driven data center buildouts as the supply chain ramps incremental capacity to address industry demand.”

Raymond James analyst Simon Leopold rates the stock as Outperform with a $41 price target. He wrote in a research note that artificial intelligence presents a “bright spot” for the company moving forward.

“Coherent is a leader in datacenter transceivers, particularly at the leading edge, and its report provides validation,” Leopold said.

Write to Angela Palumbo at [email protected]