COHU · Cohu
Conviction · Low · more likely to lag the S&P 500 over the next three months
Wrong if: a daily close above $52.00
Note written ·
How this view changed
- · Rating cut from Medium to Low. The note's kill line was crossed, 4 November 2026: Cohu shares closed at $43.98 on 4 November 2026, below the published $46.00 kill line, and fell further to $34.90 the next session.
Price against the kill line
16.2% clear of its kill line on the 13 November 2026 close.
How to read this
This note expects the shares to lag the market, so its kill line sits above the price: a close above the red mark would prove the view wrong. Prices run from low on the left to high on the right. The dot is where the stock closed on 13 November 2026, left of the mark while it is below the line; a dot right of the mark has closed through it.
The scale is stretched near the line, so close calls are easy to see. More than 8% from the line, the stock reads well clear, with a hollow dot to show the figure is off the drawn scale.
The kill line is the research note's own test. The portfolio sells on business facts, not on a price. How the portfolio decides
Three months against the kill line
Daily closes, to . Red: the kill line, a daily close above $52.00, on record since 11 November 2026. The shares are down 30.4% since the close; the S&P 500 is down 2.1% over the same sessions. Figures in the note can cover a different window.
Kill line
A daily close above $52.00, over the 30 October 2026 close of $50.79 and the 200-day average, which would show the shares recovering the November drop and leading again. Fourth-quarter fiscal-2026 revenue above the $185 million top of guidance would also show the shares leading.
Research onlyNot in the portfolio.
Last catalyst
Key figures from the filings · Technology
Quarter to 26 September 2026, filed 29 October 2026; valuation at the 13 November 2026 close
- Revenue, latest quarter ($M)
- 173
- Revenue, change on a year (%)
- +37.0
- Gross margin (%)
- 45.5
- Operating margin (%)
- 7.4
- Free cash flow, four quarters ($M)
- 55.9
- Net cash, cash less debt ($M)
- 190
- Enterprise value to sales (×)
- 3.3
- Free-cash-flow yield (%)
- 2.7
All filed numbers
What Cohu reports to the SEC in its quarterly and annual filings. Each group states its period and filing date once; a figure dated otherwise says so. Built from the filings known on .
| Quarter to | Revenue ($M) | On a year (%) | Gross margin (%) | Operating margin (%) |
|---|---|---|---|---|
| first filed | 173 | +37.0 | 45.5 | 7.4 |
| first filed | 149 | +38.4 | 45.4 | 0.2 |
| first filed | 125 | +29.3 | 46.3 | −8.9 |
| first filed | 122 | +29.9 | 40.0 | −12.7 |
| first filed | 126 | +32.4 | 43.8 | −7.7 |
| first filed | 108 | +2.8 | 43.7 | −16.0 |
| Pre-tax income ($M) | 14.3 |
| Net income ($M) four quarters: −22.6 | 12.1 |
| Diluted shares, change on a year (%) against the quarter to 27 September 2025 | +16.3 |
| Operating cash flow ($M) | 66.2 |
| Capital spending ($M) | 10.3 |
| Free cash flow ($M) | 55.9 |
| Cash and short-term investments ($M) | 508 |
| Debt ($M) non-current long-term debt plus current maturities plus short-term bank loans | 318 |
| Net cash, cash less debt ($M) | 190 |
| Deferred revenue ($M) 0.0% on a year | 14.4 |
| Backlog, orders not yet delivered ($M) 0.0% on a year | 4.6 |
| Receivables ($M) | Not reported |
| Inventory ($M) | 149 |
| Shareholders' equity ($M) | 791 |
| Market value ($M) | 2,064 |
| Enterprise value, market value plus net debt ($M) | 1,874 |
| Enterprise value to sales (×) | 3.3 |
| Enterprise value to operating income (×) | Not meaningful |
| Price to earnings (×) | Not meaningful |
| Price to book value (×) | 2.6 |
| Free-cash-flow yield (%) | 2.7 |
Short interest (FINRA, settled 15 October 2026, published 26 October 2026): 18.9% of shares outstanding sold short, 7.4 days of average trading to cover, −0.3% since the previous report.
| Window | Bought | Sold |
|---|---|---|
| 90 daysfrom | $0 | $7.3M |
| 12 monthsfrom | $0 | $13.0M |
The thesis
Cohu's business keeps beating its own guidance, but the shares broke down with semiconductor-equipment stocks in early November and are more likely to lag the S&P 500 over the next three months. The fourth-quarter fiscal-2026 report, expected around February 2027, settles whether results can pull the price back above its moving averages.
The published kill line, a daily close below $46.00, was crossed on 4 November 2026, when the shares closed at $43.98. The next session they closed at $34.90. That crossing showed the call that the shares would lead was wrong. The 28 October 2026 beat did not hold the price up once sector selling arrived. The rating is Low because the price trend has broken, while the company has raised its own targets.
The business case still stands on the numbers. Third-quarter (Q3) revenue was $173.0 million, up 37% year over year, and the fiscal-2026 high-performance computing (HPC) revenue outlook rose to about $120 million (Cohu release, 28 October 2026). At its 10 November 2026 investor day Cohu set midterm targets of $1.3 billion in revenue, 50% gross margin and $5 of non-GAAP earnings per share (EPS), according to a TradingView summary of the event. The shares still close 39.3% below the 5 October 2026 52-week high of $75.72. The market is pricing those targets as distant and uncertain.
Bullish and bearish views on Cohu, Inc.
The bull case on Cohu, Inc. (COHU), in brief: Q3 beat guidance and estimates. The bear case: the price fell through the beat.
Bull case
- Q3 beat guidance and estimates. Net sales were $173.0 million against a $164.56 million estimate. Non-GAAP EPS was $0.43 against $0.34 (Cohu release and company news, 28 October 2026).
- Midterm targets set a high bar. On 10 November 2026 Cohu set targets of $1.3 billion in revenue, 50% gross margin and $5 of non-GAAP EPS, built on four growth platforms (TradingView summary of the investor day).
- A new Eclipse customer. On 10 November 2026 Cohu said an undisclosed customer selected its Eclipse platform for production testing of next-generation HPC devices (company news).
- Orders run ahead of sales. Q3 bookings rose 126% year over year, with systems bookings up 318%. The AI compute pipeline grew 18% sequentially to roughly $1.0 billion (Q3 release, 28 October 2026). On the Q3 call, management projected 30% to 40% revenue growth for 2027 (Benzinga transcript).
- Fourth-quarter guidance sits above Q3. Cohu guided Q4 revenue to about $178 million, plus or minus $7 million. The $171 million low end is above Q3's actual $173.0 million less $2 million, and the guide was set against a $167.98 million estimate (company news, 28 October 2026).
- Cash covers the convertible debt. Cash and investments were $507.9 million on 26 September 2026, against $260 million of 1.50% convertible notes due 2031.
Bear case
- The price fell through the beat. The shares closed at $43.98 on 4 November 2026 and $34.90 on 5 November 2026. MarketBeat reported 1.76 million shares traded midday on 5 November 2026, about 55% above average volume, and gave no company-specific cause.
- Analyst targets are coming down. B. Riley cut its target to $60 from $75 on 9 November 2026 and kept a Buy rating. It raised the target to $62 on 11 November 2026, after the investor day, still below its 29 October 2026 level.
- Officers sold into strength. SEC Form 4 filings show CEO Luis Muller sold 55,794 shares at $60.00 on 21 September 2026, 27,236 at $65.00 on 25 September 2026 and 21,662 at $73.00 on 2 October 2026, all under a Rule 10b5-1 plan. Chief Recurring Officer Christopher Bohrson sold 1,000 shares at $55.31 on 15 October 2026.
- Accounting earnings trail the headline. Q3 GAAP net income was $12.1 million ($0.22 per share) against $23.3 million non-GAAP ($0.43 per share). Q2 was a GAAP net loss of $0.2 million (company releases).
- Few customers drive HPC. The HPC ramp depends on a small group of customers, including AMD, which gave the investor-day keynote. One delayed order could move a quarter.
Price setup
The shares closed at $45.98 on 11 November 2026, up from the $34.90 close of 5 November 2026. The path ran $38.49 on 6 November 2026, $43.40 on 9 November 2026 and $43.57 on 10 November 2026. The rebound recovered most of the 5 November 2026 drop but not the 4 November 2026 close of $43.98 plus the earlier losses.
As of 11 November 2026 the 50-day moving average is $56.01 and the 200-day moving average is $47.71, per adjusted daily closes. The last close sits below both. The 50-day average is falling toward the 200-day from about $10 above it.
The three-month price change is −21.2%, from a close of $58.34 on 13 August 2026. The 52-week high is $75.72 intraday on 5 October 2026, and the 52-week closing low is $21.38 on 17 November 2025. The 200-day average is the first level the shares need to clear to show the drop reversing.
MarketBeat's consensus target was $72.50 on 9 November 2026. After the 28 October 2026 report, Jefferies set $90, Baird $83, Stifel $75 and Needham $65. B. Riley's $62 is the lowest target dated after the investor day.
Catalysts ahead
- ~November to December 2026 (est.): Possible Form 4 filings from the CEO and the Chief Recurring Officer under their Rule 10b5-1 sale plans. Further officer sales would add supply while the shares trade well below the $60 to $73 prices of the September and October sales.
- ~February 2027 (est.): Q4 FY26 results and first formal 2027 outlook. Shows whether revenue lands above the $185M top of the guide and whether 2027 growth of 30% to 40% holds, which decides if the shares can lead again.
Elapsed catalysts
- 12 November 2026: Cohu management at the Baird 2026 Global Industrial Conference. First public comments after the investor day; shows whether management reaffirms the Q4 guide of $171M to $185M amid sector selling. (passed)
What would change the view
A daily close above $52.00, over the 30 October 2026 close of $50.79 and the 200-day average, which would show the shares recovering the November drop and leading again. Fourth-quarter fiscal-2026 revenue above the $185 million top of guidance would also show the shares leading.
The line before it, a daily close below $46.00 set on 1 November 2026, was crossed on 4 November 2026: the shares closed at $43.98.
What it trades with
Cohu sells test handlers, contactors and inspection equipment to chipmakers. Its shares move with semiconductor equipment stocks more than with its own quarterly results, as the early-November drop after a full beat showed. MarketBeat listed a beta of 1.60 on 9 November 2026, so moves in the broader chip group arrive amplified.
AMD's AI accelerator ramp bears directly on Eclipse handler demand. Other test-equipment makers are the closest read-across for order trends, and semiconductor capital-spending guidance from large chipmakers sets the tone for the group.
The evidence, claim by claim (8)
- Q3 FY26 net sales were $173.0M, up 37% from $126.2M, with GAAP net income of $12.1M ($0.22 per share) and non-GAAP net income of $23.3M ($0.43 per share). Cohu Q3 2026 results release (Form 8-K exhibit) · as of
- Cohu guided Q4 FY26 revenue to about $178M plus or minus $7M ($171M to $185M), against a $167.98M analyst estimate. Cohu Q3 2026 results release; company news · as of
- Cohu raised its fiscal-2026 HPC revenue outlook to about $120M from $100M to $110M; the AI compute pipeline grew 18% sequentially to roughly $1.0B. Cohu Q3 2026 results release · as of
- Q3 bookings rose 126% year over year, with systems bookings up 318% and recurring revenue up 36%. Cohu Q3 2026 results release · as of
- At its investor day Cohu set midterm targets of $1.3B revenue, 50% gross margin and $5 non-GAAP EPS, built on four growth platforms. Cohu investor day, per TradingView/Quartr summary · as of
- An undisclosed customer selected Cohu's Eclipse platform for production testing of next-generation HPC devices. Cohu company news · as of
- B. Riley cut its Cohu target to $60 from $75 on 9 November 2026, then raised it to $62 on 11 November 2026, keeping a Buy rating. B. Riley Securities notes, via MarketBeat and GuruFocus · as of
- Cash and investments were $507.9M at quarter end, and Cohu repurchased no shares in Q3. Cohu Q3 2026 results release · as of
Sources
- Cohu (NASDAQ:COHU) Shares Down 18.6% - Here's Why · marketbeat.com ·
- Cohu (NASDAQ:COHU) Stock Price Target Lowered at B. Riley Financial · marketbeat.com ·
- COHU Reiterated by B. Riley Securities -- Price Target Raised to $62.00 · gurufocus.com
- Cohu Q3 2026 Earnings Call Transcript · benzinga.com
- Cohu to Host Investor Day on November 10, 2026 · finance.yahoo.com
- COHU Stock Price, News & Analysis · stocktitan.net
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