Bullish COHR Technical and Fundamental analysisCoherent Corp.BATS:COHRjysupmtb Coherent (COHR) - Technical + Fundamental Analysis Price: $280 to +500$ (hopefully) Technical analysis 1. 200 EMA (daily and weekly): COHR has reacted several times around the 200 EMA (about $277). The last touch of the lower support led to a +45% move, and several big moves started when price hit the daily 200 EMA. This looks like an accumulation zone. 2. Key support (yellow diagonal line): price is sitting on a support line that has held multiple times. 3. FVG fill: the gaps from the early-2026 run (+100%) and the August gap are now filled, which suggests the correction is complete. 4. Fibonacci: price is holding the golden zone (0.5-0.618, about $283-303), a level many traders watch. 5. MACD (12,26,9): crossed clearly in August. With price moving around the 200 EMA, it gives no strong signal right now. 6. RSI (14): strong buying came in when RSI hit 30 on July 29 (oversold). It is now near 50, neutral. Projection: the $260-280 zone is a potential key reversal area, with several technical confirmations and an attractive risk/reward. Target: $510+. Fundamental analysis Latest quarter (Q4 fiscal 2026, ended June 30): - Revenue: $2.05B, +34% year over year (record) - Operating income: $254M, up from $6M - Net income: $241M (12% net margin) - Adjusted EPS: $1.74, +74%. Earnings are growing much faster than revenue. AI data-center optics are the growth engine - Datacenter & Communications = 79% of revenue, +59% - Datacenter revenue +66%, record bookings, orders extending into 2028 - Management targets a first $3B revenue quarter by June 2027 - NVIDIA invested $2B in March 2026, with a multi-year, multibillion-dollar purchase commitment PhotonLink (launched Sept 21, 2026) Coherent's new integrated optics platform: its own lasers, silicon photonics, fibers and detectors assembled into complete optical solutions placed right next to the AI chips (co-packaged optics, near-packaged optics, chip-to-chip links). - For AI: more bandwidth between chips as copper reaches its limits, lower energy per bit and lower latency. - For Coherent: it sells complete solutions instead of single parts (more revenue per system) and stays inside the next AI architecture. More than 25 customer engagements, with revenue expected to ramp from Q4 2026. Balance sheet - About $2.0B of cash and short-term investments vs $3.2B of debt - Leverage down to 0.7x from 2.0x, helped by NVIDIA's investment Weak spots - Free cash flow was about -$1.0B in fiscal 2026, because capex jumped to $1.1B to build capacity - Gross margin of 38.5% is still below Lumentum's 47.4%. Management targets above 42%. Operating margin vs 1-year stock move (last 12 months) - Credo: 31.7% | +41% - Lumentum: 17.8% | +516% - Corning: 15.6% | +96% - Ciena: 14.1% | +158% - Coherent: 12.6% | +178% - Fabrinet: 10.0% | +14% The market is rewarding margin expansion (Lumentum) more than size. Valuation: 5-year scenarios (from fiscal 2026 adjusted EPS of $5.61) - Conservative: EPS +15%/yr -> $11.28 x 20 P/E = $226 (-5.3%/yr) - Base case: EPS +25%/yr -> $17.12 x 25 P/E = $428 (+7.7%/yr) - Optimistic: EPS +35%/yr -> $25.16 x 30 P/E = $755 (+20.6%/yr) Today COHR trades at about 53x trailing adjusted EPS (31x forward). Analysts' average 12-month target: about $415. These are not forecasts: they show what must happen to justify each return. Risks - Largest customer = 20% of revenue - AI spending cycle (hyperscaler and NVIDIA budgets) - Negative free cash flow while capex rises - Competition (Innolight, Lumentum) and price pressure - High valuation: any disappointment can hit the stock hard - Tariffs and export controls (most factories are in Asia) Conclusion Technically, COHR is holding the 200 EMA and the Fibonacci golden zone after completing its correction. Fundamentally, growth, earnings and the AI pipeline (NVIDIA, PhotonLink) are strong, but the stock is not cheap. The $510 target (+72%) is above the analysts' average (about $415), so it needs results that beat expectations. Key metric to watch: margins and free cash flow as the new capacity comes online. Figures: Coherent Q4 fiscal 2026 results and filings; peer data as of Sept 25, 2026. This is my personal analysis, not financial advice.