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Let's talk about the popular The Cooper Companies, Inc. (NYSE:COO). The company's shares saw a significant share price rise of over 20% in the past couple of months on the NYSE. As a large-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, what if the stock is still a bargain? Let’s take a look at Cooper Companies’s outlook and value based on the most recent financial data to see if the opportunity still exists.
Check out our latest analysis for Cooper Companies
What Is Cooper Companies Worth?
According to my valuation model, Cooper Companies seems to be fairly priced at around 6.1% below my intrinsic value, which means if you buy Cooper Companies today, you’d be paying a fair price for it. And if you believe that the stock is really worth $354.49, then there’s not much of an upside to gain from mispricing. In addition to this, Cooper Companies has a low beta, which suggests its share price is less volatile than the wider market.
Can we expect growth from Cooper Companies?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. Cooper Companies' earnings over the next few years are expected to increase by 74%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.
What This Means For You
Are you a shareholder? It seems like the market has already priced in COO’s positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?
Are you a potential investor? If you’ve been keeping an eye on COO, now may not be the most optimal time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, which means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.
With this in mind, we wouldn't consider investing in a stock unless we had a thorough understanding of the risks. Case in point: We've spotted 1 warning sign for Cooper Companies you should be aware of.