Key Takeaways
- Coherent Corp. (COHR) and Symbotic Inc. (SYM) are prominent players in the Zacks Technology Services industry, with COHR delivering solid top-line performance and SYM having a substantial backlog.
- COHR’s operating income surged sharply, driven by disciplined cost controls and effective expense management, while SYM’s heavy reliance on Walmart remains a key concern.
- COHR looks more attractive than SYM from a valuation standpoint, with a higher forward 12-month price-to-sales (P/S) multiple and a better earnings surprise history.
- COHR’s strong financial performance and solid balance sheet strength make it a more favorable choice for investors, while SYM’s elevated valuation levels and customer concentration risks temper its outlook.
Introduction to Coherent Corp. and Symbotic Inc.
Coherent Corp. (COHR) and Symbotic Inc. (SYM) are two prominent players in the Zacks Technology Services industry. COHR specializes in delivering cutting-edge technologies that span materials, components, and systems, serving a broad range of applications across the industrial, communications, electronics, and instrumentation sectors. On the other hand, SYM focuses on developing, commercializing, and deploying advanced technology solutions designed to optimize supply-chain operations, with a strong emphasis on AI-driven robotics. This comparison aims to determine which technology services company currently has the upper hand and which one offers stronger growth potential.
Coherent Corp.’s Financial Performance
Coherent Corp. delivered solid top-line performance in the first quarter of fiscal 2026, posting a 17.3% year-over-year increase and 3.4% sequential growth in revenues. The company’s operating income surged sharply, driven by disciplined cost controls and effective expense management. This significant growth in operating income relative to revenue underscores COHR’s scalable operating structure and efficiency. Additionally, COHR achieved high production yields for its 6-inch indium phosphide (InP) wafers, which supported the commencement of production at its Järfälla, Sweden facility and expanded manufacturing capacity.
Symbotic Inc.’s Financial Performance
Symbotic Inc. reported a substantial backlog of $22.5 billion at the end of the fourth quarter of fiscal 2025, which supported its year-over-year revenue growth during the quarter. The company is also well-positioned for margin expansion, supported by the steady cadence of system deployments. However, SYM’s heavy reliance on Walmart remains a key concern, as the retailer represents a significant portion of its total revenues. Furthermore, SYM does not pay dividends and has no plans to initiate one, which may limit the stock’s appeal to income-focused investors.
Comparison of Coherent Corp. and Symbotic Inc.
A comparison of COHR and SYM reveals that COHR looks more attractive from a valuation standpoint, with a higher forward 12-month price-to-sales (P/S) multiple and a better earnings surprise history. COHR’s strong financial performance in the first quarter of fiscal 2026, coupled with its solid balance sheet strength, makes it a more favorable choice for investors. In contrast, SYM’s elevated valuation levels, unfavorable earnings surprise track record, and customer concentration risks temper its outlook.
Growth Prospects and Challenges
COHR’s strong product demand, coupled with management’s expectations for further acceleration, reinforces its favorable growth outlook. The company’s Optical Circuit Switch technology represents a key enabler for AI data centers, with management estimating that this product alone could unlock more than $2 billion in long-term addressable market potential. However, SYM faces challenges related to international expansion, adapting its technology to varying operational environments and customer needs, and ongoing tariff-related economic uncertainty.
Investment Recommendation
Given its better prospects, COHR emerges as the clear winner over SYM at present. COHR carries a Zacks Rank #3 (Hold), while SYM has a Zacks Rank #4 (Sell). Investors may want to consider COHR’s strong financial performance, solid balance sheet strength, and favorable growth outlook when making their investment decisions. In contrast, SYM’s elevated valuation levels and customer concentration risks make it a less attractive choice for investors.