Analysts Are Bullish on These 3 Laser Tech Companies
Lasers are an often-overlooked technology with a broad array of applications in medicine, industrial settings, electronics, and more. The global market for laser technology is small but growing rapidly; valued at about $24 billion in 2024, it is expected to climb at a compound annual growth rate of 8% over a five-year period to reach close to $30 billion by 2029.
A number of under-the-radar laser tech firms may be poised to capture a portion of this growth. Companies like nLIGHT Inc. (NASDAQ: LASR), Coherent Corp. (NYSE: COHR), and Cognex Corp. (NASDAQ: CGNX) utilize lasers in different ways, but one thing they have in common is a stamp of approval by Wall Street analysts. Below we explore why each of these firms may be worthy of investor consideration.
Aerospace and Defense Drive nLIGHT Revenue Gains
nLIGHT develops semiconductor and fiber lasers and sensors for industrial, aerospace, and defense applications, among others. Electronic components companies like nLIGHT are highly susceptible to tariffs, but the company has managed to emerge from the first quarter of the year not only unscathed, but in a dominant position.
Revenues for the first quarter of the year climbed by 16% year-over-year (YOY) to nearly $52 million, beating analyst predictions by a solid margin. Gross margin of 26.7% was also up sharply from 16.8% in the prior-year quarter. Net losses of $8.1 million represent an improvement of more than 41% over last year's figure at this time as well.
Driving nLIGHT's recent success has been its aerospace and defense operations, which the company foresees growing by at least 25% this year. The company expects this to drive continued revenue growth into the second quarter, with a range of $53 million to $59 million forecast.
A sense of optimism has emerged across the Street, with all five analysts rating LASR shares, assigning a Buy rating. The stock has a consensus price target of $14.90, leaving additional room for growth in the near term.
Lasers Remain a Focus of Coherent as Data Center Business Drives Growth
Coherent builds a wide range of lasers, optoelectronic components, and related devices for use in industrial, communications, and electronics settings. Like nLIGHT, Coherent has also demonstrated its potential through better-than-expected earnings. Its third-quarter fiscal 2025 earnings, for the period ended March 31, included a 24% YOY improvement in revenue and a gross margin improvement of 491 basis points to 35.2%.
While Coherent's data center business has primarily driven growth, its new slate of optical networking technologies ensures that its laser business remains a critical component of its operations.
Coherent's market cap of $12.3 billion makes it one of the largest laser companies in the world, so investors may be encouraged to see that this part of its business is still central despite the rapid growth of the data center market.
Coherent is also likely insulated from some of the damage from tariffs due to its vertical integration of materials, a benefit afforded to it because of its size and scope. The company also enjoys solid market share across multiple business lines.
At the same time, shares have dropped in value by more than 18% year-to-date (YTD), bringing Coherent's price-to-sales ratio down to just 2.21 and attracting attention from value investors.
COHR shares are favorites of Wall Street analysts based on 14 Buy ratings and two Holds. The stock's consensus price target is $102.80, more than a quarter above current levels.
Near-Term Challenges for Cognex, But a Solid Product Lineup Points to Long-Term Success
Cognex's machine vision products are designed to automate manufacturing and distribution operations across multiple industries. The company also topped analyst revenue predictions for the most recent quarter, though sales growth of 2.5% YOY is not as impressive as the firms above. Importantly, though, Cognex is profitable, with adjusted EPS of 16 cents per share representing 41% YOY improvement.
One of Cognex's most important products is its In-Sight 8900 smart camera, built to use AI to improve manufacturing automation. Still, despite a strong product line-up, the company is cautious going forward.
Headwinds in automotive and consumer electronics, two key partner industries, threaten to dampen performance.
Further, tariff uncertainty could continue to threaten demand, and the company is in the midst of a CEO transition. Still, investors with a longer view may see long-term potential in CGNX shares, as seven analysts providing a Buy rating would agree. Based on a consensus price target of $39.17, CGNX stock may have upside potential of nearly 29%.
What's more, analysts considered the most recent earnings report when boosting their overall estimates for revenue for nLIGHT this year.
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