Coherent Corp. arrives at its August 12 earnings report having added another leg to an extraordinary run — the stock closed Friday at $379.13, up 44% on the week and 13% on Thursday alone — yet short sellers remain dug in rather than retreating.
Since the previous ORTEX note published Tuesday, the short picture has shifted modestly but the thesis holds: bears are still adding into strength rather than covering. Short interest ticked up a further 2.1% on Thursday to 5.9% of free float, bringing the weekly gain in borrowed shares to 8.5%. That marks a meaningful escalation from the 7.4% weekly rise noted earlier in the week. The cost to borrow has eased slightly to 0.45%, down about 9% on the week, suggesting no incremental strain in the lending market — and availability remains extraordinarily loose at over 2,000% of short interest, meaning roughly twenty shares are available to borrow for every one currently lent out. There is no mechanical squeeze pressure. What looks like a classic short-squeeze setup is, in the lending data, anything but.
Options positioning has actually softened relative to the stock's move. The put/call ratio fell to 1.21 on Friday, just below its 20-day average of 1.23 and half a standard deviation beneath it. That's a notable contrast: despite a 44% weekly gain, options traders are not rushing to protect gains with puts at an unusual rate. If anything, the PCR is more neutral than defensive — a divergence worth watching given how aggressively the stock has moved.
The analyst community is broadly constructive but increasingly trailing the price action. The consensus is Buy with a mean target of $394, only about 4% above Friday's close. Raymond James raised its target to $435 in early July; Citigroup went to $420 in April; but Morgan Stanley holds at Equal-Weight with a $290 target — well below where the stock now trades. JP Morgan's Overweight target of $300 is similarly stale relative to current levels. The bull case rests on structural AI-driven demand for transceivers and data-centre optics buildout. Bears point to exposure to Chinese military-supply-chain risk, uncertainty around co-packaged optics cannibalising revenue, and a valuation — P/E near 30x — that now prices in considerable execution. The stock has nearly doubled year-to-date, and EPS momentum factor scores rank in the 95th–98th percentile, suggesting estimates have been rising sharply; the EPS surprise rank of just 31, however, implies the company does not consistently beat by large margins.
Insider activity leans net-negative on a 90-day basis. The CEO sold over $11 million of stock in early June, and the CFO has trimmed twice since May. The net 90-day insider sales figure is roughly $13.7 million. These are likely pre-scheduled, low-significance trades — ORTEX scores them 1–2 out of 10 — but the directional signal is one-way: nobody at the company has been buying into this rally. Peers have moved sharply too, with FN up 29% and GLW up 20% on the week, suggesting the whole photonics and connectivity complex has re-rated — making it harder to read COHR's move as purely idiosyncratic.
The print will test whether Coherent's Q4 results and forward guidance can justify a valuation that has now run well past most of the Street's price targets, with a short base that has been adding — not cutting — through one of the sharpest weekly moves in the stock's recent history.
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