TLDR
- Cohu (COHU) closed at $45.00 on Wednesday, down 2.13%, and traded at $45.06 in pre-market.
- Jefferies kept its buy rating and $90 target, which implies 107% upside.
- Management wants revenue to reach $1.3 billion in three to five years, up from $625 million in 2026.
- Needham reiterated its buy rating with a $65 target on Thursday.
- Cohu beat third-quarter estimates with $0.43 EPS and $172.96 million in revenue.
Cohu (COHU) ended Wednesday at $45.00, down $0.98 or 2.13%. In pre-market trading it edged up to $45.06. That is a long way from its 1-year high of $75.72, though it sits well above the 1-year low of $21.10.
Jefferies still likes the chip test-equipment maker. The brokerage kept its buy rating and $90 price target in a November 11 note. That target implies 107% upside from the $43.57 reference price it used.
The note followed Cohu’s first Analyst Day since 2022. Jefferies said the event made it more confident in the company’s AI plans. Cohu stays on its list of top small- and mid-cap ideas.
What Management Laid Out
Management shared a long-range plan with some big numbers. It wants revenue to climb from $625 million in 2026 to $1.3 billion within three to five years. That would more than double the top line.
The company also set targets for profits. It sees gross margin reaching 50% and free-cash-flow margin hitting 18%. Earnings per share would rise from $1 to $5.
Cohu sees its addressable market growing from $3.0 billion to $5.4 billion. The extra room would come from AI compute, advanced package inspection, data-center power management and recurring revenue. Jefferies expects more complex chips, higher power needs and longer test times to lift demand for thermal control, inspection and interface products.
High-performance computing would drive most of the growth. It is expected to supply 60% of the planned revenue gain. Recurring revenue would add 25%, and a rebound in core markets would cover the last 15%.
Jefferies pointed to a $1 billion HPC pipeline. Of that, $270 million sits in qualified programs. Another $440 million is going through qualification.
A recent customer win added to the picture. It moved $40 million from the engagement stage to qualified status, backed by purchase orders. Jefferies says the near-term ramp of the Eclipse product is supported by qualified programs and purchase orders.
The firm expects revenue growth of 30% to 40% in 2027 as the pipeline turns into production. That is the part of the story Jefferies seems most keen on.
Other Analysts and Recent Numbers
Needham also weighed in on Thursday. It reiterated its buy rating with a $65 target, which points to about 41% upside. Cohu opened at $45.97 that day.
Wall Street is mostly positive on the name. MarketBeat data shows a “Moderate Buy” consensus and an average target of $72.50. Of ten ratings, one is Strong Buy, seven are Buy, one is Hold and one is Sell.
Not every recent move was a raise. B. Riley cut its target from $75 to $60 but kept its buy rating. Wall Street Zen upgraded the stock from hold to buy on November 7.
The numbers from the last report back up the growth story. Cohu posted $0.43 EPS for the quarter on October 28, ahead of the $0.35 analysts expected. Revenue came in at $172.96 million against estimates of $170.25 million, up 37% from a year earlier.
Insiders have been sellers lately. CEO Luis Muller sold 21,662 shares at $73.00 on October 2. Over the last three months, insiders have sold 116,692 shares worth $7.37 million.
Those sales were made under pre-arranged plans to cover taxes on vested equity awards. Insiders own 3.05% of the company. The stock’s market value stands at $2.18 billion, and it trades below its 50-day average of $56.01.
