In the current session, the stock is trading at $230.71, after a 6.88% spike. Over the past month, Coherent Inc. (NYSE:COHR) stock increased by 11.08%, and in the past year, by 146.70%. With performance like this, long-term shareholders are optimistic but others are more likely to look into the price-to-earnings ratio to see if the stock might be overvalued.

How Does Coherent P/E Compare to Other Companies?

The P/E ratio is used by long-term shareholders to assess the company's market performance against aggregate market data, historical earnings, and the industry at large. A lower P/E could indicate that shareholders do not expect the stock to perform better in the future or it could mean that the company is undervalued.

Compared to the aggregate P/E ratio of 37.22 in the Electronic Equipment, Instruments & Components industry, Coherent Inc. has a higher P/E ratio of 304.03. Shareholders might be inclined to think that Coherent Inc. might perform better than its industry group. It's also possible that the stock is overvalued.