Why Coherent Stock Tanked by Nearly 20% on Thursday

Core Viewpoint - Coherent's recent performance raised concerns due to slowing growth in a key business segment, despite slightly beating analyst estimates for fiscal Q4 2025 [1][3]. Financial Performance - For fiscal Q4 2025, Coherent reported revenue of $1.53 billion, a record high and a 16% increase year over year [3]. - The company's non-GAAP net income grew by nearly 9% to $192 million, equating to $1.00 per share, which also exceeded analyst estimates of $1.51 billion for revenue and $0.92 for adjusted EPS [3]. Growth Drivers - Coherent attributed its revenue improvements to strong performance in areas such as AI data centers [4]. - However, revenue growth in the data center segment showed a decline, dropping to 24% in Q4 from previous rates of 39%, 46%, and 58% in the three preceding quarters [4]. Analyst Sentiment - Analyst Vivek Arya from Bank of America Securities downgraded his recommendation on Coherent's stock from buy to neutral due to the slowing growth in the data center space [5]. Future Guidance - Coherent management provided guidance for the current first quarter, expecting revenue between $1.46 billion and $1.6 billion, and adjusted EPS between $0.93 and $1.13, both significantly above Q4 fiscal 2024 figures [6]. - The average analyst estimates for the current quarter are $1.55 billion for revenue and $1.03 per share for adjusted EPS, which fall within the company's guidance ranges [6].