Cohu (COHU) AI Stock Analysis

• Market Cap: $707.87M
• Dividend Yield: N/A
• Average Volume (3M): 681.31K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.61
• Revenue Growth: -36.86%
• EPS Growth: -351.11%
• Country: US
• Employees: 2,986
• Sector: Technology
• Sector Strength: 40
• Industry: Semiconductors
• EPS (TTM): -1.49
• Shares Outstanding: 46,540,035
• 10 Day Avg. Volume: 795,062
• 30 Day Avg. Volume: 681,306
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 1.93
• Price to Cash Flow (P/CF): -112.60
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $29.50
• Price Target Upside: 106.29% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 5

Cohu's overall stock score is driven by financial challenges, including declining revenue and cash flow issues, which are partially offset by a stable balance sheet. The technical indicators highlight a bearish trend, and the valuation is unattractive due to lack of profitability. Although the earnings call provided some positive insights into future growth opportunities, the restructuring efforts and their associated costs add to the uncertainty.

Positive Factors

Cost Management

COHU's strategic restructuring program aims to improve its cost structure by consolidating operations and reducing workforce, which is expected to lower the breakeven revenue level.

Earnings Outlook

The restructuring program is projected to prevent COHU from generating a loss on a non-GAAP basis, with 2026 earnings estimates also seeing a modest increase.

Negative Factors

Inventory Challenges

Increased inventory reserve charges impacted COHU's financial results, causing both top and bottom lines to come in under consensus estimates.

Market Demand

COHU reported results and guidance below expectations due to a weak end-market demand environment, as customers continue to manage excess inventory.

Tax and Utilization

International tax headwinds and a decline in test cell utilization rates present ongoing challenges for COHU.

Cohu Business Overview & Revenue Model

Company Description

Cohu, Inc. is a leading provider of equipment and services for the semiconductor industry. The company operates primarily in the semiconductor test and inspection sector, offering a broad range of solutions including test handling, burn-in, thermal subsystems, and MEMS test modules. Cohu serves a diverse customer base comprising semiconductor manufacturers and test subcontractors, assisting them in enhancing yield, productivity, and efficiency in their testing processes.

How the Company Makes Money

Cohu makes money by offering a comprehensive suite of testing and inspection solutions tailored to the semiconductor industry. The company's revenue model is primarily based on the sale of its equipment, which includes test handlers, burn-in systems, and thermal solutions. In addition to direct equipment sales, Cohu generates recurring revenue through the provision of spare parts, services, and support contracts. The company's financial performance is influenced by its ability to innovate and maintain technological leadership in its product offerings, as well as by its strategic partnerships with semiconductor manufacturers and test subcontractors. Global demand for semiconductors, industry trends, and technological advancements are significant factors that contribute to Cohu's earnings.

Cohu Financial Statement Overview

Summary

Cohu faces significant financial challenges with a 51% revenue decline from 2022 to 2024 and negative profitability metrics. The balance sheet remains relatively stable with low leverage, but cash flow issues, including a negative free cash flow in 2024, raise concerns about liquidity and financial stability.

Income Statement

Cohu's income statement reveals a concerning trend with declining revenue from $812.78M in 2022 to $401.78M in 2024, indicating a significant 51% decrease. The company also faced negative profitability metrics in 2024, with a gross profit margin of 0%, net profit margin of -17.38%, and negative EBIT and EBITDA margins. This reflects substantial operational challenges and a potential inability to cover costs, raising concerns about revenue stability and profitability.

Balance Sheet

The balance sheet shows relative financial stability with a strong equity position. The debt-to-equity ratio improved to 0.02 in 2024, indicating low leverage. However, the equity ratio decreased slightly to 88.52% from previous years. Although the company maintains a solid cash position, the declining asset base and equity suggest potential risks if revenue does not recover.

Cash Flow

Cash flow analysis highlights a troubling decline in free cash flow, turning from $85.42M in 2023 to -$7.86M in 2024. Operating cash flow dropped significantly, impacting the company's ability to generate cash internally. Despite a positive operating cash flow to net income ratio, the negative free cash flow indicates liquidity issues and challenges in sustaining operations without external funding.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
401.78M	636.32M	812.77M	887.21M	636.01M
	Gross Profit
180.29M	302.81M	383.33M	386.96M	271.78M
	EBIT
-71.67M	43.27M	125.56M	132.87M	17.86M
	EBITDA
-11.84M	98.94M	178.97M	180.64M	74.11M
	Net Income Common Stockholders
-69.82M	28.16M	96.85M	167.32M	-13.84M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
262.09M	335.70M	385.58M	379.90M	170.03M
	Total Assets
999.41M	1.15B	1.23B	1.26B	1.10B
	Total Debt
18.69M	58.94M	98.18M	139.83M	345.73M
	Net Debt
-187.71M	-186.59M	-144.16M	-150.37M	196.37M
	Total Liabilities
142.52M	200.18M	298.57M	376.54M	583.89M
	Stockholders Equity
856.89M	950.17M	928.84M	882.50M	511.62M
Cash Flow		Free Cash Flow
-7.86M	85.42M	98.09M	85.73M	31.07M
	Operating Cash Flow
2.78M	101.47M	112.86M	97.73M	49.73M
	Investing Cash Flow
21.92M	-30.21M	-67.87M	39.89M	-18.36M
	Financing Cash Flow
-59.03M	-68.14M	-91.07M	6.53M	-38.07M

Cohu Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 14.30
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For COHU, the sentiment is Negative. The current price of 14.3 is below the 20-day moving average (MA) of 15.77, below the 50-day MA of 18.51, and below the 200-day MA of 24.88, indicating a bearish trend. The MACD of -1.24 indicates Positive momentum. The RSI at 26.34 is Positive, neither overbought nor oversold. The STOCH value of 8.26 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for COHU.

Cohu Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
IMOS	63 Neutral	$472.11M	11.88	5.63%	5.87%	3.24%	-26.85%
ICHR	58 Neutral	$712.96M	―	-3.30%	―	4.68%	55.72%
Sector *	57 Neutral	$20.24B	9.51	-13.28%	2.72%	5.43%	-24.54%
UCTT	55 Neutral	$984.79M	38.02	2.77%	―	20.92%	―
COHU	48 Neutral	$707.87M	―	-7.73%	―	-36.86%	-351.11%
AOSL	47 Neutral	$671.84M	―	-2.57%	―	4.12%	-29.74%
AAOI	45 Neutral	$696.96M	―	-84.12%	―	14.57%	-139.27%

Cohu Corporate Events

Cohu Announces Strategic Restructuring Amid Industry Downturn

On February 19, 2025, Cohu, Inc. initiated a strategic restructuring program aimed at repositioning its operations and improving its cost structure amid a downturn in the semiconductor test and inspection equipment industry. The restructuring involves consolidating operations in Switzerland and Germany to lower-cost locations, reducing headcount in the U.S. and Asia, and negotiating with trade unions. The company expects to incur pretax charges of $6.1 million to $7.2 million throughout fiscal 2025, impacting its Semiconductor Test & Inspection segment.