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COO grew EPS 14% and expanded operating margin to 24.9% despite macro challenges.
Strong gains for COO's MyDay lenses and surgical devices offset weaker fertility and Asia demand.
Inventory destocking and tariff risks may pressure COO's revenues and EPS into in fiscal 2026.
The Cooper Companies, Inc.’s (COO - Free Report) strategic investments in innovation and its diversified product base support long-term growth. However, near-term macro and inventory challenges, particularly in fertility and global consumer spending, require careful monitoring. Investors should weigh the company's solid execution against sector-specific and macro uncertainties.
Shares of this Zacks Rank #3 (Hold) company have lost 20.8% so far this year against the industry's 0.6% gain. The S&P 500 Index has increased 4.9% in the said time frame.
The Cooper Companies, with a market capitalization of $14.23 billion, is a global specialty medical device company.
The company’s bottom line is estimated to improve 10.1% over the next five years. Its earnings beat estimates in three of the trailing four quarters and met in one, delivering an average surprise of 3.18%.
Image Source: Zacks Investment Research
What's Driving COO’s Performance?
Strong Execution and Margin Expansion: COO delivered solid organic top-line growth and improved margins, with adjusted earnings per share (EPS) up 14% year over year to 96 cents. Operating margin expanded to 24.9%, driven by efficiency gains, OpEx leverage and disciplined cost management. This demonstrates COO's operational resilience even amid macro softness.
Product Innovation and Growth in Premium Segments: The MyDay daily silicone hydrogel lenses and MySight myopia management products are gaining traction, growing 10% and 35%, respectively, year over year. Continued expansion in toric and multifocal ranges, new product launches (e.g., MyDay Energys) and private label wins suggest sustained future revenue momentum.
Strength in Surgical Portfolio and Office-Based Products: CooperSurgical posted 8% revenue growth, with notable strength in office-based surgical devices (up 13%) and PARAGARD IUD (up 18%). Despite fertility softness, other categories in surgical remain robust, providing diversification and a buffer to near-term fertility pressures.
What's Weighing on the Stock?
Fertility Market Weakness and Soft Asia Trends: Fertility revenue growth slowed to 3%, with ongoing cycle declines in Asia Pacific and deferred capital spending by clinics. Management now expects low-single-digit growth for the fertility segment in fiscal 2025 compared to previously higher expectations. This is indicative of cyclical weakness and potential consumer constraints.
Inventory and Channel Destocking Headwinds: Channel inventory reductions across the contact lens market, along with patients buying shorter-term lens supplies, are pressuring revenue visibility. Even with strong underlying demand and fit data, COO acknowledged ongoing inventory pressures that could weigh on near-term growth.
Tariff and FX Risks Cloud FY26 Outlook: COO expects a $4 million tariff hit to fiscal 2025 COGS and a 3% EPS headwind in fiscal 2026 if tariffs remain unchanged. While mitigations are planned, COO remains exposed to global supply-chain shifts and FX fluctuations, which could pressure future margins.
The Zacks Consensus Estimate for fiscal 2025 revenues is pegged at $4.12 billion, implying growth of 5.7% from the year-ago reported figure. The consensus mark for adjusted earnings per share is pinned at $4.06, indicating an improvement of 10% from the previous year’s recorded level.
In the past 60 days, COO’s earnings estimate for fiscal 2025 has moved 2% north.
Key Picks
Some better-ranked stocks in the broader medical space are Align Technology (ALGN - Free Report) , Cencora, Inc. (COR - Free Report) and Integer Holdings Corporation (ITGR - Free Report) , each carrying a Zacks Rank #2 (Buy) at present.
Align Technology’s shares have lost 6.8% against the industry’s 0.6% growth so far this year.
Cencora has an estimated long-term growth rate of 12.8%. COR’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 6%.
Cencora has rallied 31.5% against the industry’s 0.5% decline so far this year.
Integer Holdings has an estimated long-term growth rate of 18.4%. ITGR’s earnings surpassed estimates in three of the trailing four quarters and missed once, the average surprise being 2.8%.
Integer Holdings’ shares have lost 8.5% compared with the industry’s 8.6% decline year to date.
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COO Stock Declines Despite Strong Core Growth Amid Fertility Woes
Key Takeaways
The Cooper Companies, Inc.’s (COO - Free Report) strategic investments in innovation and its diversified product base support long-term growth. However, near-term macro and inventory challenges, particularly in fertility and global consumer spending, require careful monitoring. Investors should weigh the company's solid execution against sector-specific and macro uncertainties.
Shares of this Zacks Rank #3 (Hold) company have lost 20.8% so far this year against the industry's 0.6% gain. The S&P 500 Index has increased 4.9% in the said time frame.
The Cooper Companies, with a market capitalization of $14.23 billion, is a global specialty medical device company.
The company’s bottom line is estimated to improve 10.1% over the next five years. Its earnings beat estimates in three of the trailing four quarters and met in one, delivering an average surprise of 3.18%.
Image Source: Zacks Investment Research
What's Driving COO’s Performance?
Strong Execution and Margin Expansion: COO delivered solid organic top-line growth and improved margins, with adjusted earnings per share (EPS) up 14% year over year to 96 cents. Operating margin expanded to 24.9%, driven by efficiency gains, OpEx leverage and disciplined cost management. This demonstrates COO's operational resilience even amid macro softness.
Product Innovation and Growth in Premium Segments: The MyDay daily silicone hydrogel lenses and MySight myopia management products are gaining traction, growing 10% and 35%, respectively, year over year. Continued expansion in toric and multifocal ranges, new product launches (e.g., MyDay Energys) and private label wins suggest sustained future revenue momentum.
Strength in Surgical Portfolio and Office-Based Products: CooperSurgical posted 8% revenue growth, with notable strength in office-based surgical devices (up 13%) and PARAGARD IUD (up 18%). Despite fertility softness, other categories in surgical remain robust, providing diversification and a buffer to near-term fertility pressures.
What's Weighing on the Stock?
Fertility Market Weakness and Soft Asia Trends: Fertility revenue growth slowed to 3%, with ongoing cycle declines in Asia Pacific and deferred capital spending by clinics. Management now expects low-single-digit growth for the fertility segment in fiscal 2025 compared to previously higher expectations. This is indicative of cyclical weakness and potential consumer constraints.
Inventory and Channel Destocking Headwinds: Channel inventory reductions across the contact lens market, along with patients buying shorter-term lens supplies, are pressuring revenue visibility. Even with strong underlying demand and fit data, COO acknowledged ongoing inventory pressures that could weigh on near-term growth.
Tariff and FX Risks Cloud FY26 Outlook: COO expects a $4 million tariff hit to fiscal 2025 COGS and a 3% EPS headwind in fiscal 2026 if tariffs remain unchanged. While mitigations are planned, COO remains exposed to global supply-chain shifts and FX fluctuations, which could pressure future margins.
The Cooper Companies, Inc. Price
The Cooper Companies, Inc. price | The Cooper Companies, Inc. Quote
Estimate Trend
The Zacks Consensus Estimate for fiscal 2025 revenues is pegged at $4.12 billion, implying growth of 5.7% from the year-ago reported figure. The consensus mark for adjusted earnings per share is pinned at $4.06, indicating an improvement of 10% from the previous year’s recorded level.
In the past 60 days, COO’s earnings estimate for fiscal 2025 has moved 2% north.
Key Picks
Some better-ranked stocks in the broader medical space are Align Technology (ALGN - Free Report) , Cencora, Inc. (COR - Free Report) and Integer Holdings Corporation (ITGR - Free Report) , each carrying a Zacks Rank #2 (Buy) at present.
Align Technology has an estimated long-term growth rate of 11.2%. ALGN’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 3.40%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Align Technology’s shares have lost 6.8% against the industry’s 0.6% growth so far this year.
Cencora has an estimated long-term growth rate of 12.8%. COR’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 6%.
Cencora has rallied 31.5% against the industry’s 0.5% decline so far this year.
Integer Holdings has an estimated long-term growth rate of 18.4%. ITGR’s earnings surpassed estimates in three of the trailing four quarters and missed once, the average surprise being 2.8%.
Integer Holdings’ shares have lost 8.5% compared with the industry’s 8.6% decline year to date.