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Here's Why You Should Retain Cooper Companies (COO) Stock Now

·4-min read

The Cooper Companies, Inc. COO is well-poised for growth, backed by strong prospects in both CooperVision (CVI) and CooperSurgical (CSI) business segments. However, forex remains a woe.

Shares of the Zacks Rank #3 (Hold) company lost 18.8% compared with the industry's decline of 12.8% over the past year. The S&P 500 Index has rallied 12.8% in the same time frame.

Cooper Companies — with a market capitalization of $16.78 billion — is a specialty medical device company operating on a global basis. It anticipates earnings to improve 11% over the next five years. The company beat earnings estimates in three of the trailing four quarters and missed once, the average surprise being 3.6%.

Key Catalysts

Cooper Companies maintained its market-leading position in specialty lenses, backed by highly exclusive products of Biofinity and Clariti. In fact, the company's flagship silicone hydrogel lenses are expected to deliver strong sales in the coming quarters. In the fiscal first quarter of 2022, the company witnessed substantial growth across CooperVision's Toric, Multifocal, single-use sphere, and Non-single use sphere subunits. It experienced an improvement in sales on a geographic basis — with the Americas, EMEA and Asia Pacific exhibiting strength in the fiscal first quarter.

The segment displayed solid performance in the fiscal first quarter, with its revenues rising 14% at the constant exchange rate (CER) and 11% on a reported basis to $561.5 million. Per management, strength in silicone hydrogel lenses contributed to the segmental uptick.

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In the fiscal first quarter, MiSight witnessed a whopping growth of 172%. Per management, myopia management continues to witness strong momentum, and the company is still projecting constant currency growth of above 50% in fiscal 2022 to around $100 million in sales.

Cooper Companies is well-positioned to benefit from the expanding CSI product portfolio. Per the fiscal first-quarter 2022 earnings call, CooperSurgical witnessed a solid quarter with revenue growth across two focus areas — fertility and office and surgical medical devices. With respect to fertility, revenues surged 38% year over year to $96.8 million, reflecting sustained solid performance. However, PARAGARD witnessed a decline in sales due to the negative impact of the pandemic.

CooperSurgical displayed strength in the fiscal first quarter, with revenues of $225.7 million, up 33% at constant currency and 30% on a year-over-year basis. The segment benefited from a strong fertility sub-segment and office and surgical products.

Concerning Factor

Cooper Companies generates a significant portion of its revenues in foreign currencies. Fluctuations in foreign exchange rates may significantly mar its overseas revenues.

Estimates Trend

The Zacks Consensus Estimate for the company's fiscal 2022 revenues is pegged at $3.32 billion, suggesting growth of 13.5% from the year-ago reported number, while adjusted earnings per share for the same period stands at $14.09, reflecting growth of 6.4%.

Stocks to Consider

Some better-ranked stocks in the broader medical space are AMN Healthcare Services, Inc. AMN, Masimo Corporation MASI and Veeva Systems, Inc. VEEV.

AMN Healthcare surpassed earnings estimates in each of the trailing four quarters, the average surprise being 15.6%. The company currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

AMN Healthcare’s long-term earnings growth rate is estimated at 1.1%. The company’s earnings yield of 11.4% compares favorably with the industry’s (0.8%).

Masimo beat earnings estimates in each of the trailing four quarters, the average surprise being 4.4%. The company currently carries a Zacks Rank #2 (Buy).

Masimo’s estimated earnings growth rate for second-quarter 2022 is pegged at 22.3%. The company’s earnings yield is pegged at 3.8% against the industry’s (8.5%).

Veeva Systems surpassed earnings estimates in each of the trailing four quarters, the average surprise being 9.6%. The company currently carries a Zacks Rank #2.

Veeva Systems’ long-term earnings growth rate is estimated at 18.1%. The company’s earnings yield of 2.4% compares favorably with the industry’s 0.2%.


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Masimo Corporation (MASI) : Free Stock Analysis Report

The Cooper Companies, Inc. (COO) : Free Stock Analysis Report

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Veeva Systems Inc. (VEEV) : Free Stock Analysis Report

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