Education
About Us
Working with TipRanks
Follow Us
Cohu (COHU)
NASDAQ:COHU
Top Page
Cohu
(NASDAQ:COHU)
Select Model
Select Model
Rating:55Neutral
Price Target:
$31.00
▲(4.91% Upside)
Action:ReiteratedDate:02/18/26
The score is held back primarily by weak profitability and the recent rise in leverage, despite some improvement in cash generation. Offsetting these are improving technical momentum (price above key moving averages with positive MACD) and a relatively upbeat earnings call with clearer margin recovery guidance and demand/backlog signals. Valuation is constrained by losses (negative P/E) and no dividend support.
Positive Factors
Recurring Revenue Stability
A 60% recurring-revenue mix with 25% YoY growth provides durable revenue stability from consumables, service contracts and spares. This recurring stream smooths cyclicality in systems sales, supports predictable margins and underpins long-term customer relationships and aftermarket cash generation.
Strong Bookings & Design Wins
Sustained bookings growth and diverse design wins across AI, automotive, power and HBM inspection expand addressable market and backlog quality. Multi-market wins reduce single-market exposure and support a multi-quarter revenue ramp as systems transition from design to production, improving long-term demand visibility.
Improved Liquidity & Cash Generation
A strengthened cash position plus positive operating and free cash flow in 2025 provide runway to execute backlog, invest in product development and support normal capex (~2% revenue). Improved cash resilience reduces short-term refinancing risk and enables strategic reinvestment as markets recover.
Negative Factors
Weak Profitability
Transition from multi-year profitability to consecutive net losses indicates structural margin pressure and cyclicality. Negative returns on equity and volatile margins constrain reinvestment capacity and shareholder returns, making sustained margin recovery critical for durable financial health over the next 2–6 months.
Higher Leverage from Convertible Notes
A large convertible issue materially raised reported leverage from very low levels to ~0.46 debt/equity, increasing financial risk. Higher debt pressures interest and covenant flexibility, limits strategic optionality, and raises sensitivity to slower cash conversion if cyclical demand softens.
Customer Concentration & Conversion Timing Risk
Quarterly concentration spikes and multi-quarter conversion of system orders create revenue volatility and forecasting uncertainty. Dependence on a few large customers in short periods can amplify downside risk if procurement schedules shift, limiting stable, predictable top-line growth in the near term.
Cohu (COHU) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.39B
Dividend YieldN/A
Average Volume (3M)907.22K
Price to Earnings (P/E)―
Beta (1Y)1.69
Revenue Growth-4.50%
EPS Growth-45.79%
CountryUS
Employees2,986
SectorTechnology
Sector Strength88
IndustrySemiconductors
Share Statistics
EPS (TTM)-0.15
Shares Outstanding46,888,325
10 Day Avg. Volume815,675
30 Day Avg. Volume907,222
Financial Highlights & Ratios
PEG Ratio-2.20
Price to Book (P/B)1.40
Price to Sales (P/S)2.42
P/FCF Ratio102.25
Enterprise Value/Market Cap1.10
Enterprise Value/Revenue3.38
Enterprise Value/Gross Profit8.22
Enterprise Value/Ebitda-181.18
Forecast
1Y Price Target
$31.80Price Target Upside7.61% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering5
EPS Forecast (FY)0.65
Revenue Forecast (FY)$505.62M
Cohu Business Overview & Revenue Model
Company DescriptionCohu, Inc., through its subsidiaries, provides semiconductor test equipment and services in China, the United States, Taiwan, Malaysia, the Philippines, and internationally. The company supplies semiconductor test and inspection handlers, micro-electromechanical system (MEMS) test modules, test contactors, thermal sub-systems, and semiconductor automated test equipment for semiconductor and electronics manufacturers, and test subcontractors. It also provides semiconductor automated test equipment for wafer level and device package testing; various test handlers, including pick-and-place, turret, gravity, strip, and MEMS and thermal sub-systems; interface products comprising test contactors, and probe heads and pins; spares and kits; various parts and labor warranties on test and handling systems, and instruments; and training on the maintenance and operation of its systems, as well as application, data management software, and consulting services on its products. In addition, the company offers data analytics product that includes DI-Core, a software suite used to optimize Cohu equipment performance, which provides real-time online performance monitoring and process control. It markets its products through direct sales force and independent sales representatives. The company was formerly known as Cohu Electronics, Inc. and changed its name to Cohu, Inc. in 1972. Cohu, Inc. was incorporated in 1947 and is headquartered in Poway, California.
How the Company Makes MoneyCohu generates revenue primarily through the sale of its test and inspection equipment, as well as through service and support contracts for its installed base of products. The Semiconductor Test segment is a significant revenue driver, where the company sells advanced test handlers and systems to semiconductor manufacturers. Additionally, Cohu earns recurring revenue from maintenance and support services. Partnerships with leading semiconductor companies and a strong presence in the growing markets of automotive and consumer electronics contribute to its earnings. As the demand for higher quality and more efficient testing solutions increases, Cohu benefits from strategic collaborations and technological advancements that drive its revenue growth.
Cohu Earnings Call Summary
Earnings Call Date:Feb 12, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 30, 2026
Earnings Call Sentiment Positive
The call presents a broadly positive outlook: strong sequential bookings and systems demand, solid recurring revenue (60% of Q4), multiple strategic design wins (Eclipse, HBM/Neon, Krypton, test interface wins), improving utilization across end markets, a strengthened cash position from a sizable convertible offering, and clear gross margin recovery guidance tied to higher volumes. Offsetting items are largely one-time or manageable: a material Q4 gross margin hit from inventory consolidation, a non-cash $5M tax reserve increase, higher reported debt from the convertible offering (with measures to limit dilution), and temporary customer concentration in Q4. Overall, the positive operational momentum and liquidity improvements outweigh the transitory financial charges and timing uncertainties.Q4-2025 Updates
Positive Updates
Strong Recurring Revenue Mix
Recurring revenue represented ~60% of Q4 revenue and grew 4% sequentially and 25% year-over-year, demonstrating stability from consumables, service contracts and spares.
Significant Bookings and Orders Growth
Recurring bookings increased 34% quarter-over-quarter and systems demand rose 47% quarter-over-quarter. Full-year 2025 orders increased 29% year-over-year.
Revenue Growth — Q4 and Full Year
Q4 revenue was $122.2 million, up ~30% year-over-year. Full-year 2025 revenue was $453 million, up 13% year-over-year.
Design Wins and Product Momentum
Multiple notable wins in Q4: key transition win for test interface products at a leading analog/mixed-signal customer; first order for a high-performance thermal Eclipse handler for an AI device roadmap; multiunit order for a new handler targeting automotive and physical AI; HBM inspection order for engineering lab; first mixed-signal tester order at an analog/connectivity BU; Krypton inspection order (including PACE ML software subscription); bookings for tri-temperature handlers for power module test demand.
HBM (Neon) Traction
Exited 2025 with $11 million in HBM-related revenue and booked additional systems in Q4/January. Management forecasts HBM revenue of $15–$20 million for 2026, with shipments expected to be fairly linear through the year.
Backlog and Near-Term Convertibility
Approximately 70% of guided Q1 revenue was in backlog entering Q1, with the majority of remaining systems expected to ship in Q2 — supporting a near-term revenue ramp into mid-2026.
Improved Utilization and Market Signals
Estimated test serialization/utilization rose to 76% in December (compute 78%, automotive 75%), and recurring revenue increased sequentially for four quarters, indicating strengthening demand across compute, automotive and industrial end markets.
Cash Position and Liquidity Strengthened
Cash and investments increased by $286 million during Q4 to $484 million year-end, driven by net proceeds from an upsized convertible notes offering and operating cash generation.
Clear Gross Margin Upside at Higher Volumes
Management provided a roadmap for gross margin: Q1 ~45% (after one-time Q4 items), at ~$130M/quarter revenue GM expected ~46.7–46.8%, at ~$150M/quarter just under 48%, and a normalized run rate at ~$160M/quarter at ~48% GM.
Negative Updates
Q4 Gross Margin Impact from One-Time Inventory Charges
Q4 gross margin was 40.8%, below guidance, primarily due to one-time inventory charges tied to discontinuing certain product lines and consolidating offerings. Management indicated the one-time charge accounted for the majority of the variance versus guidance (management commentary implied a several-hundred-basis-point effect).
Higher Tax Provision (Non-Cash Reserve)
Q4 tax provision was higher than guidance due to a $5 million increase in tax reserves against tax assets. Management said this reserve increase has no impact on future tax asset benefits or cash taxes.
Increased Debt from Convertible Notes
Completed an upsized convertible notes offering that raised $287.5 million (1.5% coupon, five-year term). Total debt is $305 million (includes ~$288 million from the convertible). The structure limits dilution via a 100% capped call but increases reported leverage.
No Share Repurchases in Q4
Management completed no stock repurchases during Q4, while liquidity was used to strengthen the balance sheet via convertible issuance instead of buybacks.
Quarterly Customer Concentration Spike
In Q4 two customers (one mobile, one automotive) each represented >10% of total sales, raising short-term concentration risk for the quarter (though full-year 2025 had no customer >10%).
Uncertainty on Timing for Some System Conversions
While backlog conversion guidance was given (70% of Q1 revenue in backlog), portions of strong bookings (particularly recurring multi-year service contracts and some multi-unit system orders) will convert over multiple quarters, leaving timing uncertainty for revenue recognition in later parts of 2026.
Company Guidance
Management guided Q1 revenue of approximately $122 million ± $7 million, with recurring revenue expected to be ~60% of total and systems ~40% (about 70% of guided systems revenue is in backlog entering Q1 with a majority of the balance shipping in Q2); Q1 gross margin is expected to return to the corporate average at ~45%; operating expenses are forecast to be flat at about $50 million; net interest income about $1.9 million; Q1 tax provision ≈ $5.5 million; diluted share count ≈ 48.5 million; and 2026 capital expenditures targeted at ~2% of revenue (normal maintenance each quarter). Management reiterated they expect 2026 revenue growth, and noted gross‑margin leverage scenarios of roughly 46.7–46.8% at ~$130M/quarter, just under 48% at ~$150M/quarter, and ~48% at a normalized ~$160M/quarter.Cohu Financial Statement Overview
Summary
Income statement remains weak with losses in 2024–2025 and negative margins despite a 2025 revenue rebound. Balance sheet has solid equity support, but leverage rose sharply in 2025 (debt-to-equity ~0.46). Cash flow improved with positive operating and free cash flow in 2025, though cash conversion versus net losses is still only partial.Income Statement
Revenue has been volatile: a strong rebound in 2025 (+6.6%) followed two years of contraction (2023–2024). Profitability has deteriorated materially from 2021–2022 (healthy profits) to losses in 2024–2025, with margins swinging from solid positive levels to negative operating and net margins. A key positive is that 2025 losses improved versus 2024 at the operating level, but the overall earnings profile remains weak and cyclical.32
Negative
Balance Sheet
The balance sheet is supported by a sizable equity base (2025 equity of ~$786M vs. assets of ~$1.24B), which provides cushion despite recent losses. Leverage, however, increased sharply in 2025: debt-to-equity rose to ~0.46 from very low levels in 2024 (~0.02), increasing financial risk. Returns on equity are currently negative due to net losses, offsetting the otherwise decent capitalization.58
Neutral
Cash Flow
Cash generation is positive again in 2025, with operating cash flow (~$31.7M) and free cash flow (~$10.7M) both positive, improving meaningfully from 2024 (negative free cash flow). That said, free cash flow declined sharply versus the prior year on a growth basis, and cash conversion remains only partial relative to accounting losses (free cash flow covers about one-third of the net loss in 2025). The 2022–2023 period shows the business can produce strong cash flows in better cycles, but current consistency is still a concern.44
Neutral
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 452.96M | 401.78M | 636.32M | 812.77M | 887.21M |
| Gross Profit | 154.40M | 179.83M | 302.81M | 382.87M | 386.40M |
| EBITDA | -7.79M | -19.41M | 96.97M | 171.72M | 180.64M |
| Net Income | -74.27M | -69.82M | 28.16M | 96.85M | 167.32M |
Balance Sheet | |||||
| Total Assets | 1.24B | 999.41M | 1.15B | 1.23B | 1.26B |
| Cash, Cash Equivalents and Short-Term Investments | 483.98M | 262.09M | 335.70M | 385.58M | 379.90M |
| Total Debt | 359.46M | 18.69M | 58.94M | 103.16M | 144.88M |
| Total Liabilities | 457.44M | 142.52M | 200.18M | 298.57M | 376.54M |
| Stockholders Equity | 785.54M | 856.89M | 950.17M | 928.84M | 882.50M |
Cash Flow | |||||
| Free Cash Flow | 10.73M | -7.86M | 85.42M | 98.09M | 85.73M |
| Operating Cash Flow | 31.69M | 2.78M | 101.47M | 112.86M | 97.73M |
| Investing Cash Flow | -257.02M | 21.92M | -30.21M | -67.87M | 39.89M |
| Financing Cash Flow | 246.33M | -59.03M | -68.14M | -91.07M | 6.53M |
Cohu Technical Analysis
Neutral
29.55
Price Trends
28.30
Positive
25.71
Positive
22.63
Positive
Market Momentum
0.52
Positive
47.96
Neutral
44.50
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For COHU, the sentiment is Neutral. The current price of 29.55 is below the 20-day moving average (MA) of 30.79, above the 50-day MA of 28.30, and above the 200-day MA of 22.63, indicating a neutral trend. The MACD of 0.52 indicates Positive momentum. The RSI at 47.96 is Neutral, neither overbought nor oversold. The STOCH value of 44.50 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for COHU.
Cohu Risk Analysis
Cohu disclosed 41 risk factors in its most recent earnings report. Cohu reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Cohu Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $2.04B | 15.03 | 11.67% | ― | -2.04% | 8.84% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
57 Neutral | $2.71B | -14.87 | -22.87% | ― | 6.65% | -4652.36% | |
56 Neutral | $1.38B | 85.51 | 0.98% | 2.25% | 0.96% | -85.27% | |
55 Neutral | $1.39B | -18.58 | -9.04% | ― | -4.50% | -45.79% | |
54 Neutral | $1.28B | -140.91 | -6.97% | ― | -3.23% | -122.16% | |
50 Neutral | $609.80M | -5.93 | -12.00% | ― | 5.81% | -376.55% |
* Technology Sector Average
COHU
Cohu
29.55
11.16
60.69%
AEHR
Aehr Test Systems
41.64
32.16
339.24%
AOSL
Alpha and Omega
20.49
-7.03
-25.55%
IMOS
ChipMOS Technologies
38.25
20.20
111.93%
PLAB
Photronics
35.26
14.35
68.63%
UCTT
Ultra Clean Holdings
59.60
35.35
145.77%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.