Coherent Q2 revenue beats estimates, partly driven by datacenter demand

Overview

• Photonics leader's fiscal Q2 revenue rose 17% yr/yr, beating analyst expectations

• Adjusted EPS for fiscal Q2 rose 35% yr/yr, beating analyst expectations

• Growth driven by strong datacenter and communications demand

Outlook

• Coherent expects Q3 revenue between $1.70 bln and $1.84 bln

• Company forecasts Q3 non-GAAP gross margin of 38.5% to 40.5%

• Coherent anticipates Q3 EPS of $1.28 to $1.48 on a non-GAAP basis

Result Drivers

• DATACENTER AND COMMUNICATIONS DEMAND - Strong demand in this segment drove revenue growth, according to CEO Jim Anderson

• GROSS MARGIN EXPANSION - Improved gross margins contributed to higher EPS, per CFO Sherri Luther

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 17 "strong buy" or "buy", 6 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the electronic equipment & parts peer group is "buy"

• Wall Street's median 12-month price target for Coherent Corp is $212.50, about 7.3% below its February 3 closing price of $229.18

• The stock recently traded at 38 times the next 12-month earnings vs. a P/E of 26 three months ago

Press Release: ID:nGNX9hjMlk

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