Cooper Companies (COO Quick QuoteCOO - Free Report) delivered a solid fiscal second quarter performance in 2025, surpassing analyst expectations with $1 billion in revenue (up 6.3% YoY) and adjusted earnings per share (EPS) of 96 cents (up 14% YoY). Despite persistent macroeconomic headwinds and a slightly softened outlook for industry growth, management reaffirmed confidence in its core product momentum and operational leverage. The company’s revised full-year revenue guidance of $4,107-$4,146 million and adjusted EPS of $4.05–$4.11 reflect a prudent mix of optimism and realism.

Investors evaluating COO must weigh the company’s robust product innovation and market share gains against a challenging fertility market and global inventory corrections.

COO YTD Performance vs Competitors

Johnson & Johnson (JNJ Quick QuoteJNJ - Free Report) , a key player in the vision care market, reported slower growth in its contact lens division as it navigates through market normalization post-pandemic. Meanwhile, Alcon (ALC Quick QuoteALC - Free Report) has maintained stable revenue trends but faces similar inventory pressures, highlighting the industry-wide caution in distributor ordering behavior.

While shares of COO have declined 25.7% so far this year, J&J and Alcon gained 7.3% and 1.3%, respectively. The Cooper Companies also underperformed its industry’s decline of 1.4% and the S&P 500 Index’s increase of 0.1% in the same period.

YTD Growth

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Short-Term Growth Drivers

Resurgent MyDay Demand and Improved Product Availability: A major short-term catalyst is the improved availability of MyDay daily silicone hydrogel lenses, including torics and multifocals. Management highlighted strong demand and accelerating fitting activity, particularly following capacity expansions that resolved previous supply constraints. The launch of MyDay Energys in Canada and the upgraded Clarity One Day Sphere in Japan have been well-received, setting the stage for revenue acceleration in the fiscal fourth quarter. Initial fitting activity, a leading indicator of revenues, has shown encouraging trends, giving COO confidence in stronger sequential performance later in the year.

While CooperVision is projecting 6-7% organic growth, JNJ’s vision care business has shown signs of deceleration, especially as some legacy products face declining demand. ALC, though benefiting from broader product offerings, has similarly flagged the impact of distributor destocking on its contact lens growth.

Surgical Portfolio Momentum and Strategic Acquisitions: CooperSurgical saw strong second-quarter growth in its office and surgical portfolio, reporting 13% revenue growth (10% organic), driven by minimally invasive gynecological devices and labor & delivery products. The recent acquisition of obp Surgical, which grew 31% in the quarter, and sustained interest in PARAGARD (up 18%) support near-term momentum. While PARAGARD's second quarter growth was influenced by pre-price-increase buy-ins, COO expects steadier performance in the fiscal fourth quarter after a forecasted decline in the third quarter, contributing to low to mid-single-digit full-year growth.

Sales and EPS Growth Rates for FY25 & FY26

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Long-Term Growth Catalysts

Leadership in Specialty Lenses and Myopia Management: CooperVision continues to lead in specialty lenses. Its Myopia management segment, anchored by MySight, grew 35% in the fiscal second quarter and is on track for over $100 million in fiscal 2025 sales. COO is aggressively lowering adoption barriers via promotional strategies like free initial lens periods, which have already increased fitting activity in EMEA. Longer term, geographic expansion — including a MySight launch in Japan and MyDay MiSight in EMEA in early 2026 — should bolster global adoption and retention, which already stands at an impressive 90%.

Operational Leverage and Capital Efficiency: Operational leverage remains a strong tailwind. Gross margins improved to 68% in the fiscal second quarter (up 100 bps YoY), and operating margin rose to 25%(up 100 bps), aided by lower OpEx as a percentage of revenue (43.1%). COO’s prior investments in capacity and digital infrastructure are now paying off, allowing it to scale without significant new capital. With expected fiscal 2025 free cash flow of $350–$400 million and a bank-defined leverage ratio of 1.9X, the balance sheet supports both deleveraging and opportunistic share buybacks. COO repurchased 537,000 shares for $40.6 million in the fiscal second quarter alone.

COO’s Valuation Looks Attractive

COO stock is currently trading at a discount, as suggested by the Value Score of B. Following its recent decline in share price, the company trades at a 16X forward 12-month price-to-earnings (P/S) ratio compared to 16.43X for the industry. COO is currently valued at its lowest in the past five years.

5-Year P/E F-12M Ratio

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Challenges and Market Risks

Softness in Fertility Markets and Asia Pacific Headwinds: Despite positive structural tailwinds for fertility (like delayed childbirth, broader access), COO’s fertility business underperformed in the fiscal second quarter, growing only 3% (2% organic). The slowdown is primarily tied to declining fertility cycles in Asia Pacific and capital purchase deferrals by clinics globally, including in Europe and India. Management now expects the fertility market to grow at low single digits in fiscal 2025, down from mid to upper-single digits previously forecasted.

Inventory Corrections and Channel Caution: One persistent theme is global inventory tightening. Both distributors and end-customers are reducing stockpiles, resulting in revenue pressure despite solid end-market demand. COO expects this trend to continue, impacting growth visibility throughout fiscal 2025. This inventory dynamic partly explains the company’s revised contact lens market growth assumption of 4-6%, down from 5-7% previously, though CooperVision is still expected to outpace the industry with 6-7% organic growth.

Tariff Exposure and FX Volatility: Emerging trade risks also warrant caution. COO expects fiscal 2025 tariff-related cost pressures of $4 million, rising to a potential 3% EPS headwind in fiscal 2026 without mitigation. Currency headwinds, though reduced from earlier expectations, remain a factor, with a projected 0.5% revenue and 1% EPS impact this year. COO is evaluating price increases and supply chain adjustments to mitigate these risks, but clarity may take time.

COO Trading Below 200-DMA

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Conclusion

Cooper Companies enters the second half of fiscal 2025 with strong operational execution, growing share in key categories, and increasing contributions from innovative product lines like MyDay and MySight. Its dual-engine growth model — anchored by CooperVision and CooperSurgical — remains sound, though macro and regional challenges may cap near-term upside.

COO carries a Zacks Rank #3 (Hold) at present. However, its Zacks Style score of ‘A’ makes it an attractive bet. Based on the above factors, we advise investors to start accumulating the stock in their portfolio gradually, especially by buying the dips. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.