The Cooper Companies, Inc. COO is well-poised for growth on the back of strong prospects in its CooperVision (CVI) and CooperSurgical (CSI) business segments. Acquisitions boost the company’s portfolio and buoy optimism. However, unfavorable currency movements and rising costs continue to hurt revenues and margins, respectively.
Shares of this Zacks Rank #3 (Hold) company have risen 7.4% in the past six months compared with the industry's 4.9% growth. The S&P 500 Index has gained 5.3% in the said time frame.
The Cooper Companies, with a market capitalization of $18.34 billion, is a global specialty medical device company.
The company’s bottom line is estimated to improve 9.9% over the next five years. Its earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 4.87%.
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What's Driving COO’s Performance?
The Cooper Companies continues to lead the specialty contact lens market with its innovative product lineup, flexibility and strong relationships with key accounts. Its flagship silicone hydrogel lenses, such as MyDay and Clariti, are expected to fuel robust sales in the upcoming quarters. Additionally, its silicone hydrogel FRP lenses, Biofinity and Avaira, are projected to support revenue growth.
The contact lens market is expected to grow 5-7% in 2025, supported by the long-term macro growth trend of more people needing vision correction. Strong demand for Cooper Companies’ lenses has led to a gain in market share as the company remains the leader in the category. A shift in demand toward higher value products, coupled with price hikes by the company for certain lenses, buoys optimism. The company’s focus on launching new products is promising.
In the fourth quarter, the CVI segment showed solid growth, with revenues rising 9% at constant currency to $676.4 million. According to management, the strong demand for silicone hydrogel lenses contributed to this performance. We expect CVI revenues to grow more than 7% organically for the next three years. Our model anticipates total revenues of $2.76 billion for the CVI segment in fiscal 2025.
The Cooper Companies also offers products for myopia management. MiSight is the key growth product in the company’s myopia management portfolio as it is the only FDA-approved contact lens for myopia control, especially in children.
The company registered sales growth of 7% during the fourth quarter of fiscal 2024 from myopia management portfolio. MiSight sales were up 24%. The positive trend for MiSight in the Americas and EMEA is likely to continue in fiscal 2025, with an expected growth rate of 40%. Moreover, sales in the Asia Pacific region are likely to improve going forward after a few challenging quarters.
COO is also well-positioned to capitalize on its expanding CSI product portfolio. Strong demand for its products and services in the CSI portfolio, especially for fertility, persisted in 2024. The company expects CSI revenues to continue this trend in fiscal 2025 as well. It expects annual sales in the targeted market for CSI products and services, currently more than $3 billion, to grow 5-10% over the long term.
The CSI portfolio demonstrated robust growth during the fourth quarter, with revenues increasing 12% year over year to $342 million. The fertility business led the performance, growing 15% year over year (13% organically), driven by strong demand for consumables, reproductive genetic testing and capital equipment.
Key innovations, such as advanced genomics and AI-driven fertility solutions, further enhanced this segment, underscored by its success at the American Society of Reproductive Medicine Conference. Additionally, the office and surgical segment contributed $203 million in revenues, up 11%, supported by growth in minimally invasive gynecological surgical devices and labor and delivery products. Recent acquisitions, including obp Surgical, added momentum.
Our model predicts CSI revenues to be $1.29 billion in fiscal 2025, indicating organic growth of 6% year over year.
What's Weighing on the Stock?
The Cooper Companies generates a significant portion of its revenues in foreign currencies. Fluctuations in foreign exchange rates may significantly affect its overseas revenues.
The Cooper Companies, Inc. Price
The Cooper Companies, Inc. Price
The Cooper Companies, Inc. price | The Cooper Companies, Inc. Quote
Estimate Trend
The Zacks Consensus Estimate for the company's fiscal 2025 revenues is pegged at $4.12 billion, implying growth of 5.8% from the year-ago reported figure. The consensus mark for adjusted earnings per share is pinned at $3.98, indicating an improvement of 7.9% from the previous year’s recorded level.
In the past 30 days, COO’s earnings estimate for fiscal 2025 has remained stable.
Key Picks
Some better-ranked stocks in the broader medical space are Cardinal Health, Inc. CAH, ResMed Inc. RMD and Boston Scientific Corporation BSX.
Cardinal Health, carrying a Zacks Rank #2 (Buy) at present, has an estimated long-term growth rate of 10.2%. CAH’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 11.2%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Cardinal Health’s shares have gained 25.3% compared with the industry’s 3.2% growth in the past six months.
ResMed, carrying a Zacks Rank of 2 at present, has an estimated long-term growth rate of 14.8%. RMD’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 6.4%.
ResMed has gained 22.6% compared with the industry’s 9.1% growth in the past six months.
Boston Scientific, carrying a Zacks Rank of 2 at present, has an estimated long-term growth rate of 13.8%. BSX’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 8.3%.
Boston Scientific’s shares have rallied 20.9% compared with the industry’s 9.1% growth in the past six months.
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