Is Coherent Corp. overvalued or undervalued?

As of 12 June 2025, the valuation grade for Coherent Corp. has moved from very attractive to fair. The company appears to be overvalued based on its current financial metrics. Key ratios include a P/E ratio of 62, an EV to EBITDA of 14.68, and a PEG ratio of 0.07, which suggests that while growth prospects may be strong, the current price does not reflect a compelling investment opportunity.
When compared to peers, Coherent Corp. has a higher P/E ratio than Cognex Corp. at 43.12 and Onto Innovation, Inc. at 19.10, indicating that investors are paying a premium for Coherent despite its lower return on equity of 2.81% and return on capital employed of 5.17%. Additionally, the stock's performance has lagged behind the S&P 500 year-to-date, with a decline of 14.87% compared to a gain of 2.44% for the index, further supporting the view that Coherent Corp. is currently overvalued.