Options traders believe Coherent (COHR) shares are poised for another leg higher after the optical materials and semiconductor firm reports its fiscal Q4 earnings late on Aug. 12. Consensus is for Coherent to report $1.43 in earnings per share (EPS) for its fourth financial quarter — up a remarkable 93.24% on a year-over-year basis.
The quarterly release is particularly significant given Coherent stock has already rallied some 40% since the start of this month.
Options Pricing Remains Bullish for Coherent Stock
The put-to-call ratio on COHR options contracts expiring Aug. 14 sits at 0.58x currently, signaling confidence in the company’s ability to come in ahead of Street estimates. Market participants typically treat a reading below 1x as a bullish sign.
According to Barchart, the upper price on those options contracts is set at just over $385 at the time of writing, indicating potential for a nearly 9% rally through the end of this week.
That said, COHR shares are currently trading at a forward price-to-earnings (P/E) multiple of more than 42x, which makes them even more expensive to own than Nvidia (NVDA) at nearly 25x only.
Should You Load Up on COHR Shares Today?
Investors should also note that technical momentum currently favors continued upside in Coherent shares, as evidenced in Barchart’s “64% BUY” average opinion, which is based on 13 different indicators.
On the flip side, insiders have not recorded even a single buy transaction in the trailing 12 months, the optics of which are clearly bearish for COHR.
In short, while positive options sentiment and strong artificial intelligence (AI) demand support a near-term rally, investors must balance that momentum against elevated valuation risks.
Given the stock’s rich P/E multiple and the complete absence of insider buying, any earnings miss or conservative guidance could spark swift profit-taking following tonight’s release.
What’s the Consensus Rating on Coherent?
Wall Street firms also seem to believe that the recent surge in COHR stock price has baked in much of the upside already.
The consensus rating on Coherent remains at “Moderate Buy,” but the mean price objective of $388 indicates potential upside of about 8% only over the next 12 months.
On the date of publication, Wajeeh Khan did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
/Sign%20of%20Intel%20at%20entrance%20%20by%20michaelmond.jpeg)
/NVIDIA%20Corp%20logo%20outside%20building-by%20BING-JHEN_HONG%20via%20iStock.jpg)
