What happened

Laser stock Coherent (NASDAQ:COHR), now the proud owner of former Motley Fool recommendation and laser rival Rofin-Sinar, is up 15.5% as of 2:30 p.m. EDT.

So what

Coherent reported its fiscal second-quarter earnings results after close of trading on Tuesday. With Rofin now contributing fully to its revenue stream, Coherent boasted a more than twofold increase in revenue for fiscal Q2, to $422.8 million. Profits likewise more than doubled to $41.8 million, and earnings per share came in at a very healthy $1.69 -- up 132% year over year.

Pro forma results looked even better (as they're designed to do). Tooting its own horn, Coherent boasted that these non-GAAP numbers showed an increase to $2.91 per share, pro forma, which was significantly ahead of analyst expectations for $2.39 per share in non-GAAP profits.

Stick figure explains stock chart.

Coherent stock is up, but the valuation math is problematic. Image source: Getty Images.

Now what

Commenting on the results, Coherent CEO John Ambroseo noted that "almost all markets and geographies" contributed to Coherent's reporting earnings "that exceeded the high end of guidance." Indeed, Coherent is "seeing unprecedented demand across many of our verticals."

Despite the propitious signs, management declined to give guidance for the rest of this year in its earnings release. So, here, for your benefit, is what analysts are predicting: profits (presumably of the pro forma variety) of $9.86 per share on sales of $1.58 billion for the year.

Is that good enough to justify investors' optimism? I'm not really sure. GAAP profits of $9.86 would work out to about a 26 times earnings valuation on the stock -- which would seem a bit stretched for a stock that most analysts agree will average only low-teens earnings growth over the next five years, once Rofin-Sinar's results have been fully incorporated. And given that analyst estimates are probably for only pro forma profits, the likelihood is that Coherent stock will look even more expensive when valued on GAAP financials.

Long story short, I'd be reluctant to go long this stock at these prices.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.