Core Insights - Coherent Corp. (COHR) is expected to report second-quarter fiscal 2026 results on February 4, with earnings estimated at $1.22 per share, indicating a 28.4% growth year-over-year, and revenues projected at $1.6 billion, reflecting a 13.9% increase [1][8] Earnings Estimates - Over the past 60 days, two EPS estimates for the second quarter of fiscal 2026 have been revised upward, while one was revised downward, resulting in a 1.7% increase in the Zacks Consensus Estimate to $1.22, indicating analysts' growing confidence [2] - Coherent has consistently surpassed the Zacks Consensus Estimate in the last four quarters, achieving an average surprise of 0.7% [3] Growth Drivers - The company is experiencing high demand for its products, particularly 1.6T transceivers, which is expected to continue into the second quarter of fiscal 2026 [5][8] - Increased demand for AI datacenters has led Coherent to ramp up its 6-inch Indium Phosphide (InP) production, with the global AI datacenter market projected to grow at a CAGR of 27.5% through 2035, suggesting strong InP sales for COHR [6] - Management has identified a $2 billion market opportunity in Optical Circuit Switch (OCS), with expectations of capturing a larger share due to rising AI demand [7] Stock Performance - COHR shares have surged 142.5% over the past year, outperforming the industry growth of 7% and the Zacks S&P 500 composite's 19.6% rise [9] - In the last six months, COHR has increased by 98.8%, again surpassing the industry and S&P 500 growth rates [12] - The current trailing P/E ratio for COHR is 36.11X, significantly higher than the industry average of 23.55X, indicating a premium valuation [12][20] Financial Health - Coherent reported a 51% year-over-year increase in the data center and communications market for fiscal 2025, with a 61% rise in the data center business alone [16] - The company has a strong balance sheet with $875 million in cash reserves and only $48 million in debt, providing a safety net and flexibility for investments [17] - The current ratio stands at 2.33, well above the industry average of 1.58, indicating strong liquidity [18] Competitive Landscape - Coherent faces significant competition from Wolfspeed and ON Semiconductor in the Silicon Carbide (SiC) sector, which may impact its growth and profitability [19] - Despite a strong presence in the SiC market, COHR experienced a 6% year-over-year decline in end-market demand in its Material segment's revenues for fiscal 2025 [19]

Industry Overview - The Technology Services industry is expected to return to pre-pandemic levels, facilitating regular dividend payments [1] - The industry is driven by the adoption of remote work, global digital transition, and advancements in technologies such as 5G, blockchain, AI, and ML [1][4] - Concerns regarding data security are anticipated to further stimulate industry growth [1] Economic Factors - The industry benefits from broader economic recovery, with GDP growth at an annual rate of 4.4% in Q3 2025, up from 3.8% in Q2 2025 [5] - The Services PMI has remained above 50% for 10 months in 2025, indicating healthy economic activity in the non-manufacturing sector [5] Technological Advancements - The global shift towards digitization is creating opportunities in markets such as 5G, blockchain, and AI, with the GenAI market projected to reach $91.6 billion by 2026, growing at a CAGR of 34.3% through 2031 [6] Industry Performance - The Zacks Technology Services industry currently holds a Zacks Industry Rank of 153, placing it in the bottom 37% of 243 Zacks industries [7] - Over the past year, the industry has returned 11.4%, outperforming the broader Zacks Business Services sector but underperforming the Zacks S&P 500 composite, which saw an 18.8% rally [9] Current Valuation - The industry is trading at an EV-to-EBITDA ratio of 17.83X, compared to the S&P 500's 19.08X and the sector's 10.57X [12] - Historically, the industry has traded between 10.61X and 19.45X over the past five years, with a median of 15.76X [12] Company Highlights Figure Technology Solutions, Inc. (FIGR) - FIGR reported an adjusted EBITDA of $86 million in Q3 2025, a 75% year-over-year increase, with net income tripling from the previous year [15] - The adoption of Figure Connect has significantly increased, with first lien lending volume tripling year-over-year [16] - FIGR has a Zacks Rank of 1 (Strong Buy), with a 63% increase in shares over the past month [18] Skillsoft (SKIL) - SKIL's revenue dipped 6% year-over-year in Q3 2026, primarily due to an 18% decline in the Global Knowledge segment [19] - Management is exploring strategic alternatives for the GK segment, which may help mitigate market shrinkage [20] - SKIL has a Zacks Rank of 1, with a 19.8% increase in EPS estimates for 2026 over the past 60 days [22] Adeia Inc. (ADEA) - ADEA's Q3 2025 revenue was $87.3 million, with non-Pay TV recurring revenues increasing by 31% year-over-year [22] - The company has seen a 9% reduction in operating expenses, contributing to its scalability [23] - ADEA has a Zacks Rank of 1, with a 4.9% increase in bottom line estimates for 2026 over the past 60 days [25]

Group 1: Ciena Corporation (CIEN) - Ciena Corporation is a network hardware and software services provider with a Zacks Rank of 1 [1] - The Zacks Consensus Estimate for Ciena's current year earnings has increased by 22.3% over the last 60 days [1] - Ciena has a PEG ratio of 1.03, significantly lower than the industry average of 5.51, and possesses a Growth Score of A [1] Group 2: Skillsoft Corp. (SKIL) - Skillsoft Corp. is an instructor-led training services company with a Zacks Rank of 1 [2] - The Zacks Consensus Estimate for Skillsoft's current year earnings has increased by 19.8% over the last 60 days [2] - Skillsoft has a PEG ratio of 0.23, compared to the industry average of 0.81, and possesses a Growth Score of B [2] Group 3: Casey's General Stores, Inc. (CASY) - Casey's General Stores, Inc. operates a chain of convenience stores and holds a Zacks Rank of 1 [3] - The Zacks Consensus Estimate for Casey's current year earnings has increased by 6.2% over the last 60 days [3] - Casey's has a PEG ratio of 2.20, which is lower than the industry average of 2.62, and possesses a Growth Score of A [3]

Market Overview - The U.S. market is experiencing significant volatility, influenced by tariff fears, geopolitical tensions, and concerns over an AI-driven market bubble, with these worries extending into 2026 [1] - A U.S. military operation in Venezuela has further unsettled global markets, highlighting the rapid impact of geopolitical events on investor sentiment [2] - President Trump's trade threats against European nations, linked to his Greenland acquisition bid, could lead to planned tariffs of 10% in February, increasing to 25% by June, potentially lowering market confidence [3] Investment Strategy - In the current uncertain environment, value investing is emphasized as a strategy to focus on fundamentally strong stocks trading below their intrinsic value, positioning for long-term gains when markets stabilize [4][10] - The earnings yield metric is highlighted as a valuable tool for identifying undervalued stocks, calculated by dividing earnings per share (EPS) by the current stock price, serving as the inverse of the P/E ratio [6][7] - A high earnings yield indicates potential undervaluation, while a low earnings yield may suggest overvaluation, guiding investor decisions [7] Stock Picks - Four stocks with high earnings yield and solid growth outlooks are identified: Centerra Gold, Inc. (CGAU), Plains GP Holdings, L.P. (PAGP), Angi, Inc. (ANGI), and Skillsoft Corp. (SKIL) [5][10] - Centerra Gold is positioned for growth with a Zacks Consensus Estimate for 2026 earnings implying a 48% year-over-year growth, with EPS estimates rising by 17 cents recently [14] - Plains GP Holdings is transitioning to a more focused crude oil operator, with a 27% year-over-year growth forecast for 2026 earnings and a recent EPS estimate increase of 30 cents [16] - Angi is expanding its digital marketplace and aims to enhance its AI capabilities, with a 36% year-over-year growth forecast for 2026 earnings and a recent EPS estimate increase of 16 cents [18] - Skillsoft is focusing on AI-driven solutions, with a 69 cents increase in EPS estimates for fiscal 2026 and an 11% year-over-year growth forecast for fiscal 2027 [20]

Group 1: Ciena Corporation (CIEN) - Ciena Corporation is a network technology company with a Zacks Rank 1 [1] - The Zacks Consensus Estimate for its current year earnings has increased by 22.3% over the last 60 days [1] - The company has a PEG ratio of 1.11, significantly lower than the industry average of 5.29, and possesses a Growth Score of A [1] Group 2: Skillsoft Corp. (SKIL) - Skillsoft Corp. is a digital learning solutions provider with a Zacks Rank 1 [2] - The Zacks Consensus Estimate for its current year earnings has increased by 19.8% over the last 60 days [2] - The company has a PEG ratio of 0.20, compared to the industry average of 0.76, and possesses a Growth Score of B [2] Group 3: Patria Investments Limited (PAX) - Patria Investments Limited is a private equity company with a Zacks Rank 1 [3] - The Zacks Consensus Estimate for its current year earnings has increased by 1.6% over the last 60 days [3] - The company has a PEG ratio of 0.81, lower than the industry average of 1.70, and possesses a Growth Score of A [3]

Group 1: Ciena Corporation (CIEN) - Ciena Corporation is a network technology company with a Zacks Rank 1 [1] - The Zacks Consensus Estimate for its current year earnings has increased by 22.3% over the last 60 days [1] - The company has a PEG ratio of 1.04, significantly lower than the industry average of 5.15 [1] - Ciena possesses a Growth Score of A [1] Group 2: Skillsoft Corp. (SKIL) - Skillsoft Corp. is a digital learning solutions provider with a Zacks Rank 1 [2] - The Zacks Consensus Estimate for its current year earnings has increased by 19.8% over the last 60 days [2] - The company has a PEG ratio of 0.23, compared to the industry average of 0.77 [2] - Skillsoft possesses a Growth Score of B [2] Group 3: Forum Energy Technologies, Inc. (FET) - Forum Energy Technologies is an energy equipment and services company with a Zacks Rank 1 [3] - The Zacks Consensus Estimate for its current year earnings has increased by 31% over the last 60 days [3] - The company has a PEG ratio of 0.21, significantly lower than the industry average of 1.15 [3] - Forum Energy Technologies possesses a Growth Score of A [3]

Core Insights - Coherent Corp. (COHR) achieved a 249-basis-point year-over-year growth in gross margin and a significant 1,081 basis-point expansion in operating margin during Q1 of fiscal 2026, indicating strong potential in maximizing value from its AI infrastructure business model [1][10]. Financial Performance - The company experienced a 17.3% year-over-year revenue growth, primarily driven by high demand for its product portfolio, particularly the 1.6T transceiver [2][10]. - Total costs and expenses rose by 2.7% year-over-year in Q1 FY26, which is considered minimal given the strong demand [4]. - The recent divestiture of the Aerospace & Defense business positively impacted gross margin and earnings per share (EPS), contributing to overall profitability [4]. Market Opportunities - Management has initiated 6-inch Indium Phosphide (InP) production in Jarfalla, Sweden, capitalizing on the growth of AI datacenters [3]. - The addressable market for Optical Circuit Switches is valued at over $2 billion, presenting a significant growth opportunity for the company [3]. Stock Performance and Valuation - Coherent's stock price surged by 84.9% over the past year, outperforming the industry average growth of 17% [5]. - The company trades at a forward 12-month price-to-sales ratio of 3.78X, which is higher than its peers Adeia Inc. (4.72X) and Skillsoft (0.15X) [8]. Earnings Estimates - The Zacks Consensus Estimate for COHR's earnings for fiscal 2026 and 2027 has increased by 1.6% and 1.1%, respectively, over the past 60 days [11].

Core Viewpoint - Yext reported quarterly earnings of $0.14 per share, exceeding the Zacks Consensus Estimate of $0.12 per share, marking a 16.67% earnings surprise compared to the previous year's earnings of $0.12 per share [1][2]. Financial Performance - Yext's revenues for the quarter ended October 2025 were $112 million, slightly missing the Zacks Consensus Estimate by 0.72%, and down from $113.99 million year-over-year [2]. - Over the last four quarters, Yext has surpassed consensus EPS estimates two times and topped consensus revenue estimates three times [2]. Stock Performance - Yext shares have increased approximately 39.5% since the beginning of the year, outperforming the S&P 500's gain of 16.8% [3]. - The current Zacks Rank for Yext is 3 (Hold), indicating that the shares are expected to perform in line with the market in the near future [6]. Future Outlook - The consensus EPS estimate for the upcoming quarter is $0.13 on revenues of $114.79 million, and for the current fiscal year, it is $0.66 on revenues of $450.17 million [7]. - The outlook for the Technology Services industry, where Yext operates, is currently in the top 38% of Zacks industries, suggesting a favorable environment for stock performance [8].

Group 1: Skillsoft Corp. (SKIL) - Skillsoft is an instructor-led training services company with a Zacks Rank 1 [1] - The Zacks Consensus Estimate for its current year earnings has increased by 519.3% over the last 60 days [1] - Skillsoft has a PEG ratio of 0.31, which is lower than the industry average of 0.42, and possesses a Growth Score of B [1] Group 2: Micron Technology, Inc. (MU) - Micron Technology is a memory and storage products company with a Zacks Rank 1 [2] - The Zacks Consensus Estimate for its current year earnings has increased by 23.6% over the last 60 days [2] - Micron has a PEG ratio of 0.43 compared to the industry average of 1.23, and possesses a Growth Score of A [2] Group 3: Sanmina Corporation (SANM) - Sanmina is a global provider of electronics contract manufacturing services with a Zacks Rank 1 [3] - The Zacks Consensus Estimate for its current year earnings has increased by 38.9% over the last 60 days [3] - Sanmina has a PEG ratio of 0.61, which is lower than the industry average of 1.69, and possesses a Growth Score of A [3]

Core Insights - Three stocks with strong growth characteristics and buy ranks are highlighted for investors: Micron Technology, Skillsoft, and Alarm.com [1][2][3] Group 1: Micron Technology (MU) - Micron Technology is a leading provider of semiconductor memory solutions with a Zacks Rank 1 (Strong Buy) [1] - The Zacks Consensus Estimate for Micron's current year earnings has increased by 27.1% over the last 60 days [1] - The company has a PEG ratio of 0.47, significantly lower than the industry average of 1.28, and possesses a Growth Score of A [2] Group 2: Skillsoft (SKIL) - Skillsoft, which provides digital learning and training solutions, also carries a Zacks Rank 1 [2] - The Zacks Consensus Estimate for Skillsoft's current year earnings has surged by 519.3% over the last 60 days [2] - The company has a PEG ratio of 0.29, slightly lower than the industry average of 0.30, and possesses a Growth Score of B [2] Group 3: Alarm.com (ALRM) - Alarm.com offers interactive security solutions and holds a Zacks Rank 1 [3] - The Zacks Consensus Estimate for Alarm.com's current year earnings has increased by 5.5% over the last 60 days [3] - The company has a PEG ratio of 1.51, which is lower than the industry average of 2.98, and possesses a Growth Score of B [3]