Cohu (COHU) Valuation Check After Recent Share Price Momentum And Mixed Signals On Fair Value

Cohu (COHU) has drawn fresh attention after recent share price moves, with the stock last closing at US$31.56. That puts its one day, week, month and past 3 months returns firmly in focus for investors.

See our latest analysis for Cohu.

The recent 1 month share price return of 11.8% and 3 month share price return of 33.6% sit alongside a 1 year total shareholder return of 63.2%. This points to positive momentum following weaker 3 and 5 year total shareholder returns, which show declines of 14.1% and 31.4% respectively.

If you are looking beyond Cohu and want to see what else is moving in chip related names, take a look at our screener of 34 AI infrastructure stocks as a starting point for ideas.

With Cohu trading close to its US$31.80 analyst target, solid recent price gains and an intrinsic value estimate that sits well above the current share price, you have to ask: is there still a buying opportunity here, or is the market already pricing in future growth?

Most Popular Narrative: 3.1% Overvalued

Cohu's most followed valuation narrative points to a fair value of $30.60, which sits slightly below the recent close at $31.56, putting a small premium in focus.

The analysts have a consensus price target of $25.75 for Cohu based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $28.0, and the most bearish reporting a price target of just $22.0.

Read the complete narrative.

Curious how a company that is currently loss making gets to a higher fair value than the consensus target? Revenue growth assumptions, margin rebuild and a future earnings multiple sit at the heart of this story.

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 Cohu struggles to win and qualify new AI or HBM related orders, or if key customers pull back or delay spending.

Find out about the key risks to this Cohu narrative.

Another Angle: Sales Multiple Sends A Mixed Signal

Our cash flow model flags Cohu as expensive, yet its P/S ratio of 3.3x sits well below the US Semiconductor industry average of 5.8x and above a fair ratio of 2.9x. So is the stock offering relative value on sales, or is the market already a step ahead?

See what the numbers say about this price — find out in our valuation breakdown.

Next Steps

If this mixed picture leaves you on the fence, now is a good time to look through the full details yourself and weigh the upside. To see exactly what is driving optimism, take a closer look at the 1 key reward and decide how it fits your own thesis.

Looking for more investment ideas?

If Cohu has you thinking more broadly about your portfolio, this is the moment to widen your search and see what else could deserve a closer look.

• Spot potential value plays by reviewing our list of 53 high quality undervalued stocks that pair solid fundamentals with prices that may not fully reflect them.
• Strengthen your income focus by scanning 15 dividend fortresses that aim to combine higher yields with resilient payout histories.
• Protect your downside by checking out 85 resilient stocks with low risk scores that our screener flags with comparatively lower risk scores.

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.

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