Core Insights - The price-to-earnings (P/E) ratio is a popular metric for assessing stock value but has notable shortcomings [1] - The EV-to-EBITDA ratio is often considered a more accurate valuation metric, providing a clearer view of a company's value and earnings potential [2][3] Valuation Metrics - EV-to-EBITDA is calculated by dividing a company's enterprise value (EV) by its earnings before interest, taxes, depreciation, and amortization (EBITDA), offering a better understanding of profitability by excluding non-cash expenses [3] - A lower EV-to-EBITDA ratio indicates a potentially undervalued stock and is particularly useful for valuing acquisition targets due to its consideration of debt [4] - Unlike P/E, EV-to-EBITDA can be applied to loss-making firms that are EBITDA-positive, making it a versatile tool for assessing companies with varying debt levels [5] Limitations of Valuation Metrics - EV-to-EBITDA varies across industries, making it less appropriate for comparing stocks in different sectors due to diverse capital requirements [6] - A strategy based solely on EV-to-EBITDA may not yield optimal results; it is recommended to combine it with other ratios like P/B, P/E, and P/S for a comprehensive analysis [7] Screening Criteria for Value Stocks - Parameters for screening value stocks include a lower EV-to-EBITDA ratio compared to the industry median, a P/E ratio below the industry median, and a P/B ratio less than the industry average [8][9] - Additional criteria include a minimum average 20-day trading volume of 50,000 shares, a current price of at least $5, and a Zacks Rank of 1 or 2, indicating strong buy potential [10][11] Selected Stocks - DNOW Inc. is highlighted as a leading energy and industrial solutions provider with a Zacks Rank of 1 and a Value Score of A, expected to have a 20.5% earnings growth rate for 2026 [11][12] - FirstSun Capital Bancorp, a financial holding company, also holds a Zacks Rank of 1 with a Value Score of A and an expected earnings growth rate of 13.8% for 2026 [12][13] - Safehold Inc., a real estate investment trust, has a Zacks Rank of 1 and a Value Score of B, with an expected earnings growth rate of 7.1% for 2026 [13][14] - Amkor Technology, a semiconductor packaging provider, has a Zacks Rank of 1 and a Value Score of B, with an expected earnings growth rate of 27.2% for 2026 [14] - CEMEX, a global construction materials company, has a Zacks Rank of 2 and a Value Score of B, with an expected earnings growth rate of 218.5% for 2026 [15]

Core Insights - Coherent Corp.'s stock price has increased by 13.9% over the past three months, outperforming the industry average of 12% and the Zacks S&P 500 Composite's growth of 9.3% [1][7] - The company reported a significant revenue increase of 51% for fiscal 2025, primarily driven by a 61% surge in the data center market [5][7] - Coherent Corp. is developing new products, including 1.6T and 3.2T transceivers, and has increased its indium phosphide capacity by three times year-over-year to meet rising demand [6][8] Financial Performance - In the year-to-date period, Coherent Corp. experienced a 4.5% decline, contrasting with Microvast's 28% rise and Vimeo's 35.6% decline [4] - The company has a forward P/E ratio of 19.02, which is lower than the industry average of 25.94, and an EV-to-EBITDA ratio of 11.98 compared to the industry's 36.38 [12] - Coherent Corp. has a return on equity (ROE) of 12.2%, significantly higher than the industry's 6%, and a return on invested capital (ROIC) of 6.1%, compared to the industry's -9.1% [15] Market Growth and Future Prospects - The company expects fiscal 2026 revenues to reach $6.7 billion, indicating a year-over-year growth of 9.7%, with further growth of 13.8% anticipated for fiscal 2027 [20] - Analysts have revised EPS estimates upward for both fiscal 2026 and 2027, reflecting confidence in the company's performance [21] - Coherent Corp. has secured a multi-year agreement with Apple for new Vertical-Cavity Surface-Emitting Laser products, expected to contribute to revenue in the second half of 2026 [10] Product Development and Strategic Initiatives - The company began initial revenue shipments of its Optical Circuit Switch (OCS) in fiscal 2025, with the global OCS market projected to grow at a CAGR of 11.6% from 2025 to 2030 [9] - Revenue from communications increased by 42% year-over-year in the fourth quarter of fiscal 2025, driven by demand for high-capacity coherent transceivers [11] - Coherent Corp. is taking significant steps in co-packaged optics-related technologies, which are expected to provide cost and volume advantages [8]