Buffett Brain · Research note
Score updated 5 Oct 2026
COHR· Technology
Coherent
Coherent, Inc.'s low ROIC and high valuation multiples signal a lack of sustainable competitive advantage.
Buffett fit
Weak fit
Owner
19
Durability
27
Management
48
Price
0
Score updated 5 Oct 2026
Buffett's checklist
Each number against Buffett's bar, and where it ranks among Technology stocks in our database.
How much profit the business makes on each dollar invested in it. Higher is better.
What is left of each sale after the cost of making the product. A high number often means pricing power.
The cash the business earns for its owners, compared with the price of the whole company.
How fast sales grew each year over the last five years.
How many years of today's profit you pay for at today's price. Lower means cheaper.
How much the company owes compared with what it owns outright. Lower is safer.
The four pillars
How the business measures up on each of Buffett's four tests.
Owning Coherent, Inc. would be challenging due to its low of 3.92% and the high ratio of 126.8, which limits the potential for strong returns.
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The durability of Coherent, Inc. is questionable, given its low and the competitive nature of the laser technology industry.
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Management has not effectively compounded shareholder value, as indicated by the share count CAGR of 8.95% and a negligible yield of 0.05%.
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The current valuation is unattractive, with an earnings yield of 0.79% and an yield of 0.32%, far below the 8-10% threshold for a fair entry point.
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- The full reasoning behind all four pillars
- The 5-year price target and the return it implies
- What would change the call
- Graham, Lynch and Greenblatt on the same stock
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For and against
The strongest points on each side, with the numbers behind them.
In its favor
5- 1Revenue CAGR of 16.95% over five years indicates strong top-line growth.
- 2Current ratio of 3.05 suggests solid short-term financial health.
- 3Debt/Equity ratio of 0.32 shows conservative .
- 4Net debt/EBITDA of 1.60 is manageable.
Concerns
7- 1 of 3.92% is well below the sector top-quintile cutoff of 13.4%.
- 2 of 37.0% is significantly below the sector's top-quintile of 60.6%.
- 3 ratio of 126.8 indicates extreme overvaluation.
- 4Interest coverage of 2.0 is below the safety threshold, indicating financial risk.
Price history
$337+489.1%· 5-year return
Weekly closing prices. Touch or hover the line for a date.
The business
How the business works
Coherent, Inc. provides laser-based technologies across two segments: OEM Laser Sources and Industrial Lasers & Systems. The company designs and markets lasers, optics, and related accessories for applications in microelectronics and scientific research. Despite a revenue CAGR of 16.95% over five years, the company's profitability is hindered by a low net margin of 7.1% and a of 3.92%, indicating weak unit economics.
How this analysis has moved
The call has held across 2 reviews.
Sep 27, 2026 → Oct 4, 2026
What other investors would say
The same company, judged by three other documented playbooks.
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