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    Assessing Cohu (COHU) Valuation After Q4 Revenue Jump And Earnings Miss

    Simply Wall St·02/14/2026 19:21:37
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    Q4 results and why the stock moved

    Cohu (COHU) reported Q4 2025 revenue of US$122.2 million, nearly 30% above the prior year. However, it also reported an adjusted loss that was much larger than analysts expected, which triggered a sharp share price drop.

    Alongside those results, management guided Q1 2026 sales to around US$122 million, in a range of US$115 million to US$129 million, with comments pointing to better gross margins supported by backlog and demand in automotive, AI, and high bandwidth memory markets.

    See our latest analysis for Cohu.

    The sharp 1 day share price return of negative 6.71% following the Q4 earnings miss comes after a strong run. The 90 day share price return of 38.52% and 1 year total shareholder return of 44.89% point to momentum that has been building, despite longer term 3 and 5 year total shareholder returns remaining negative.

    If Cohu's AI and high bandwidth memory exposure has caught your attention, it could be a good moment to see what else is out there in this space through our 34 AI infrastructure stocks.

    With the stock up strongly over the past year and now trading only about 2% below the average analyst price target of US$31.20, the key question is whether recent weakness offers an entry point or if the market already reflects Cohu's future AI and HBM ambitions.

    Most Popular Narrative: Overvalued

    Cohu's most followed narrative pegs fair value at $30.60, almost exactly where the shares last closed at $30.60, which raises questions about upside from here.

    The push towards automation, data analytics, and AI-driven yield/process optimization through Cohu's software suite (DI-Core, Tignis) supports an ongoing shift to higher-margin, recurring software and services revenue. This is expected to enhance long-term net margins and earnings stability.

    Read the complete narrative.

    Curious what kind of revenue growth and margin lift are baked into that fair value tag? The narrative leans on a specific recovery path and a future earnings multiple that might surprise you. The full story is in how those building blocks fit together.

    Result: Fair Value of $30.60 (OVERVALUED)

    Have a read of the narrative in full and understand what's behind the forecasts.

    However, that story can change quickly if AI or HBM spending expectations reset or if concentrated customer wins fail to turn into sustained, repeat orders.

    Find out about the key risks to this Cohu narrative.

    Build Your Own Cohu Narrative

    If you see the numbers differently or prefer to test your own assumptions, you can build a personalised Cohu view in just a few minutes by starting with Do it your way.

    A great starting point for your Cohu research is our analysis highlighting 1 key reward and 1 important warning sign that could impact your investment decision.

    Looking for more investment ideas?

    If Cohu is on your radar, do not stop there. Widen your watchlist with a few targeted idea lists that can help you pressure test your next moves.

    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.