DCF Studio

    COHR · NYQ · Technology

    Coherent Corp.

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 96.38

    Market price

    USD 199.95

    Implied upside

    -51.8%

    10-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · Price 2026-11-02 · Accounts to 2026-06-30

    AdjustedFree cashflow is negative in at least one forecast year, so terminal value carries most of the valuation.

    Current EV/EBITDA of 28.8x sits outside a defensible 3-20x band, so the exit multiple is capped at 20.0x. A multiple that far out usually means EBITDA is the wrong denominator for this business.

    Value Per Share

    Perpetuity growth
    USD 96.38-51.8%
    Exit multiple
    USD 342.56+71.3%
    Market price
    USD 199.95

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    -0bn2bn4bnFY27FY28FY29FY30FY31FY32FY33FY34FY35FY36
    Nominal FCFFDiscounted to todayUSD
    LineFY27FY28FY29FY30FY31FY32FY33FY34FY35FY36CAGR
    RevenueUSD 10.6bnUSD 14.7bnUSD 19.8bnUSD 25.6bnUSD 32.0bnUSD 38.6bnUSD 44.8bnUSD 50.0bnUSD 53.5bnUSD 54.8bn+20.0%
    EBITUSD 693.1mUSD 960.7mUSD 1.3bnUSD 1.7bnUSD 2.1bnUSD 2.5bnUSD 2.9bnUSD 3.3bnUSD 3.5bnUSD 3.6bn+20.0%
    NOPATUSD 547.6mUSD 758.9mUSD 1.0bnUSD 1.3bnUSD 1.6bnUSD 2.0bnUSD 2.3bnUSD 2.6bnUSD 2.8bnUSD 2.8bn+20.0%
    Add depreciation & amortisationUSD 1.1bnUSD 1.5bnUSD 2.1bnUSD 2.7bnUSD 3.4bnUSD 4.0bnUSD 4.7bnUSD 5.2bnUSD 5.6bnUSD 5.7bn+20.0%
    Less capital expenditureUSD -1.0bnUSD -1.4bnUSD -1.8bnUSD -2.2bnUSD -2.7bnUSD -3.1bnUSD -3.5bnUSD -3.7bnUSD -3.8bnUSD -3.7bn+15.1%
    Capex, % of revenue9.8%9.4%9.1%8.7%8.4%8.1%7.7%7.4%7.0%6.7%-
    Less increase in working capitalUSD -1.1bnUSD -1.2bnUSD -1.5bnUSD -1.8bnUSD -1.9bnUSD -2.0bnUSD -1.9bnUSD -1.6bnUSD -1.1bnUSD -402.9m-10.2%
    Free cashflow to firmUSD -433.0mUSD -319.5mUSD -216.9mUSD 6.0mUSD 384.7mUSD 942.6mUSD 1.7bnUSD 2.6bnUSD 3.5bnUSD 4.5bn-
    Discount factor0.94510.84420.75410.67360.60170.53750.48010.42890.38310.3422-
    Present valueUSD -409.3mUSD -269.7mUSD -163.6mUSD 4.1mUSD 231.5mUSD 506.6mUSD 807.0mUSD 1.1bnUSD 1.4bnUSD 1.5bn-
    Present Value Of The ForecastUSD 4.7bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.89%US 10-year Treasury (^TNX), 2026-11-02
    Equity risk premium4.23%Damodaran, January 2026
    Beta1.827Reported 2.234, pulled toward 1.0 (Blume)
    Cost of equity12.62%Risk-free + beta x equity risk premium
    Cost of debt5.67%Risk-free + 78bp, the spread for a A rating at 4.7x interest cover. Book interest / average debt was lower, at 5.1%.
    Market capitalisationUSD 39.4bn91.8% of capital
    Total debtUSD 3.5bn8.2% of capital, book value as a proxy
    Tax rate21.0%Effective, capped at statutory
    WACC11.95%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 96.38

    77% of EV

    Forecast FCFF, final year
    USD 4.5bn
    Capex at depreciation, working capital in reinvestment
    USD 5.3bn
    Less reinvestment at g/ROIC (20.9% of NOPAT)
    USD -1.1bn
    Capitalised
    USD 4.2bn
    ROIC (WACC floor)
    12.0%
    Terminal value, undiscounted
    USD 45.8bn
    Terminal value, discounted
    USD 15.7bn
    Enterprise value
    USD 20.4bn
    Less net debt
    USD 1.6bn
    Equity value
    USD 18.8bn

    Exit at 20.0x EBITDA

    Value per shareUSD 342.56

    93% of EV

    Terminal value, undiscounted
    USD 186.4bn
    Terminal value, discounted
    USD 63.8bn
    Enterprise value
    USD 68.5bn
    Less net debt
    USD 1.6bn
    Equity value
    USD 66.9bn

    Spread between methods: 112%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    9.95%136.88134.64132.40130.15127.91
    10.95%116.37114.45112.53110.60108.68
    11.95%99.7198.0496.3894.7193.05
    12.95%85.9784.5283.0681.6180.16
    13.95%74.5073.2371.9570.6869.40

    Outlined: this model. Green text: above today's price of 199.95. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputActualModelImplied
    Revenue growth, a year11.3%22.6%32.8%
    EBIT margin12.7%6.5%14.6%
    Discount rate-12.0%7.7%
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.