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    How Investors May Respond To Cohu (COHU) Beating Q3 Estimates on Recurring Revenue Growth

    Simply Wall St·11/01/2025 13:34:05
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    • Cohu, Inc. recently reported its third quarter 2025 results, with sales rising to US$126.25 million and a net loss of US$4.1 million, both showing improvement compared to the prior year period.
    • An important detail from the announcement was the continued growth in recurring revenue, especially from interface solutions and test handler spares, which helped the company outperform analyst expectations for the quarter.
    • We'll explore how Cohu's improved earnings and recurring revenue growth may influence its investment narrative and outlook.

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    Cohu Investment Narrative Recap

    To be a Cohu shareholder today, you need to believe in the company's ability to benefit from semiconductor industry tailwinds, particularly increased demand in automotive, industrial, and high-performance computing segments. The recent third-quarter results reflected improvements in sales and net loss but did not materially change the biggest short-term catalyst: winning more business in high-growth computing markets, nor did they lessen the current risk of heavy customer concentration or ongoing earnings volatility from cyclical demand swings.

    Among recent announcements, Cohu's updated guidance for Q4 2025 sales, expected in the range of US$122 million plus or minus US$7 million, directly contextualizes the Q3 results, pointing to potentially stable sales but also reinforcing that industry cyclicality is still in focus as a near-term risk and driver of sentiment.

    Still, contrasted with recent recurring revenue gains, investors should be aware of the outsized impact that shifts in a few major customer relationships could have on near-term results...

    Read the full narrative on Cohu (it's free!)

    Cohu's narrative projects $640.1 million revenue and $90.3 million earnings by 2028. This requires 17.6% yearly revenue growth and a $177.4 million increase in earnings from -$87.1 million currently.

    Uncover how Cohu's forecasts yield a $25.75 fair value, a 8% upside to its current price.

    Exploring Other Perspectives

    COHU Community Fair Values as at Nov 2025
    COHU Community Fair Values as at Nov 2025

    All fair value estimates from the Simply Wall St Community are clustered at US$25.75, with just 1 perspective represented. While community consensus is aligned, some caution that Cohu’s near-term fortunes could shift quickly if cyclical swings or customer exposures materialize, inviting you to explore further viewpoints on these core risks and opportunities.

    Explore another fair value estimate on Cohu - why the stock might be worth just $25.75!

    Build Your Own Cohu Narrative

    Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

    • A great starting point for your Cohu research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision.
    • Our free Cohu research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Cohu's overall financial health at a glance.

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    This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.