Is Coherent Corp. overvalued or undervalued?

As of 13 August 2025, the valuation grade for Coherent Corp. has moved from very attractive to attractive, indicating a shift in its perceived value. The company appears to be overvalued, particularly when considering its high P/E ratio of 62, which is significantly above its peer average of approximately 59.7. Additionally, the EV to EBITDA ratio stands at 14.68, while the industry average is much lower, suggesting that investors are paying a premium for earnings before interest, taxes, depreciation, and amortization. The PEG ratio of 0.07, however, indicates that the stock may still be undervalued in terms of growth potential, but this is overshadowed by other high valuation metrics.
In comparison to peers, Rockwell Automation has a P/E of 57.64 and an EV to EBITDA of 37.69, while Keysight Technologies shows a P/E of 59.54 and an EV to EBITDA of 25.46, both of which are still lower than Coherent Corp.'s metrics. Despite this, Coherent Corp. has outperformed the S&P 500 in various timeframes, with a 1-year return of 33.43% compared to the S&P 500's 17.14%, and a remarkable 5-year return of 182.71% against the S&P 500's 96.61%. This strong performance may suggest that investors are willing to accept a higher valuation for the potential growth ahead.