Despite A Drop In Sales, Coherent Stock Has Managed To Strongly Outperform The S&P 500

July 1st, 2022 by Trefis Team
COHR: Coherent logo
COHR
Coherent

Coherent Inc. (NASDAQ: COHR) stock price jumped more than 2.5x from $106 in 2018 end, to around $266 currently, primarily due to favorable changes in its P/S multiple. The company, a manufacturer of laser components and equipment, actually witnessed a drop in revenue per share over this period, due to a drop in sales and a rise in the outstanding share count. Despite this, the stock managed to strongly outperform the S&P, which has risen a little over 50%, in comparison, over this period.

In our interactive dashboard, Why Coherent Stock Moved: COHR Stock Has Gained 152% Since 2018, we break down the factors behind this move.

(A) Coherent’s Total Revenue dropped 19% from $1.9 billion in FY 2018 to $1.5 billion currently

  • Coherent’s total revenue initially dropped from $1.9 billion in FY ’18 to $1.2 billion in FY ’20 (COHR’s fiscal year ends in September) but has since recovered and currently stands slightly higher at around $1.5 billion.
  • As of FY ’21, more than 60% of Coherent’s sales come from OEM laser sources sales, with $914 million worth of products sold in FY ’21.
  • The Industrial lasers and systems segment brings in the remaining 40% of revenues, standing at around $574 million as of FY ’21.
  • For details about Coherent revenues and comparison to peers, see Coherent (COHR) Revenue Comparison
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(B) Revenue per share (RPS) decreased 20% from $77.45 in FY ’18 to $62.28 currently

  • COHR revenue dropped from $1.9 billion in FY ’18 to $1.5 billion currently, while the outstanding share count increased marginally from 24.6 million in FY ’18 to 24.8 million currently.
  • Due to this, RPS has dropped from $77.45 in FY ’18 to $62.28 currently.

(C) Price-To-Sales (P/S) multiple for Coherent jumped from 1.4x in 2018-end to 4.5x by 2021 end, but has pulled back to 4.3x currently, still around 3x higher than its 2018 level

  • Due to COHR’s stellar performance since 2018-end, its P/S multiple rose strongly from 1.4x in 2018-end to as high as 4.5x by late 2021.
  • However, due to the increased economic uncertainty weighing on the broader markets, the P/S multiple has pulled back, currently standing at around 4.3x, still 3x higher than its 2018 level.
  • For additional details about the company stock returns and comparison to peers, see Coherent (COHR) Stock Return Comparison.

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Returns Jul 2022
MTD [1]		 2022
YTD [1]		 2017-22
Total [2]
 COHR Return 0% 0% 94%
 S&P 500 Return 1% -20% 70%
 Trefis Multi-Strategy Portfolio 2% -25% 199%

[1] Month-to-date and year-to-date as of 7/1/2022
[2] Cumulative total returns since the end of 2016

 

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