Cohu: Buy Rating Reaffirmed on Improving Utilization, Margin Rebound, and New Data Center Wins

Charles Shi, an analyst from Needham, maintained the Buy rating on Cohu. The associated price target was raised to $33.00.

Charles Shi has given his Buy rating due to a combination of factors, including Cohu’s in-line fourth-quarter revenue and the expectation that gross margins will rebound as a one-time inventory charge rolls off. He also notes that test cell utilization improved to 76%, signaling healthier demand trends and better capacity use going forward.

Shi highlights that a new data center design win at an analog/mixed-signal customer should provide additional revenue this year on top of existing high-bandwidth memory and AI compute opportunities. Despite the recent quarter’s margin shortfall, which he views as largely non-recurring, his earnings forecasts are moving higher, supporting an increased price target of $33 and his view that investors should buy the current pullback.

In another report released today, TD Cowen also maintained a Buy rating on the stock with a $35.00 price target.