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Here's Why You Should Invest in Cooper Companies (COO) Stock

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The Cooper Companies, Inc. (COO - Free Report) is well poised for growth backed by robust Cooper Vision (CVI) and Cooper Surgical (CSI) product portfolios.

The stock has gained 14.8%, compared with the industry’s rally of 14.7% over the past six months. Meanwhile, the S&P 500 Index has rallied 20.3% in the same time frame.

Cooper Companies — with a market capitalization of $17.59 billion — is a specialty medical device company operating on global basis. It anticipates earnings to improve 10% over the next five years. Moreover, the company has a trailing four-quarter earnings surprise of 3.8%, on average.

Let’s take a closer look at the factors that substantiate the company’s Zacks Rank #2 (Buy).

Key Catalysts

Cooper Companies maintained its leading position in the markets of specialty lenses, supported by highly exclusive products of Biofinity and Clariti. The company’s MyDay lenses are already available in Europe and have gained significant traction within a short span of time. Clariti lenses also hold significant growth prospects. Per the fiscal second-quarter earnings call, the company expects to recoup some of its lost sales in the days ahead.




With regard to MiSight, the fiscal third quarter reported revenues of growth of $1.6 million, which reflected growth of 35%. The company has experienced a significant increase in interest from optometrists as they look for value added ways to increase patient flow as their practices reopen. Per fiscal-third quarter 2020 earnings call, management anticipates robust growth in the fiscal fourth quarter as the U.S. MiSight launch is currently fully underway.

Although the CVI segment displayed weak performance in the fiscal third quarter, the results were much better than expected since CooperVision bounced back from the lows experienced due to the COVID-19 pandemic. Per the fiscal third-quarter earnings call, with respect to this segment, all three regions posted improved performance as the company progressed through the quarter.

Moreover, Cooper Companies is well positioned to benefit from the expanding CSI product portfolio. For fiscal 2020, the company anticipates mid-single digit growth from the PARAGARD acquisition. Per the fiscal third-quarter earnings call, PARAGARD witnessed a solid rebound as offices gradually reopened. PARAGARD placement activity rose over the course of June and July, and the momentum continued in August. Hence, the company expects a solid fiscal fourth quarter.

Despite the weakness displayed by the CSI business in the fiscal third quarter, the company exceeded expectations amid a challenging market environment. On an encouraging note, both the fertility, and office and surgical business segments posted improving results as the company progressed through the quarter and into August.

Estimates Trend

For fiscal 2021, the Zacks Consensus Estimate for revenues is pegged at $2.76 billion, reflecting an increase of 13.5% from the year-ago period. The same for adjusted earnings per share stands at $12.65, suggesting an improvement of 33.6% from the prior-year reported figure.

Other Stocks to Consider

Some other top-ranked stocks from the broader medical space include Cardinal Health Inc. (CAH - Free Report) , Align Technology, Inc. (ALGN - Free Report) and Thermo Fisher Scientific Inc. (TMO - Free Report) , each carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Cardinal Health has a projected long-term earnings growth rate of 5.4%.

Align Technology has an estimated long-term earnings growth rate of 18.3%.

Thermo Fisher has a projected long-term earnings growth rate of 18%.

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