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Reasons to Add The Cooper Companies Stock to Your Portfolio Now

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The Cooper Companies, Inc. (COO - Free Report) is well-poised for growth, backed by 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 #2 (Buy) company have risen 16.6% year to date compared with the industry's 0.3% growth. The S&P 500 Index has gained 20.6% in the said time frame.

The Cooper Companies, with a market capitalization of $21.86 billion, is a global specialty medical device company.

The company’s bottom line is estimated to improve 11.4% over the next five years. Its earnings beat estimates in two of the trailing four quarters and met the mark in the other two, delivering an average surprise of 3.87%.

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What's Driving COO’sPerformance?

The Cooper Companies has been leading the specialty lenses market, owing to innovative product portfolios, market-leading flexibility and strength in key accounts. Its flagship silicone hydrogel lenses, including MyDay and clarity, are expected to drive strong sales in the upcoming quarters. Moreover, its silicone hydrogel FRP lenses, Biofinity and Avaira, should boost top-line growth.

The lens business is expected to thrive due to significant growth in CVI’s Toric, Multifocal and single-use sphere segments. This positive trend is evident across all geographic regions. Additionally, COO’s myopia management portfolio is performing well, thanks to the high demand for MiSight. The myopia management sector is anticipated to see further improvement in the coming quarters, supported by back-to-school promotional campaigns.

The CVI segment displayed solid performance in the second quarter, with revenues rising 9% at a constant exchange rate to $675.6 million. Per management, strong demand for silicone hydrogel lenses contributed to the segmental uptick.

In August, COO acquired obp Surgical, a U.S.-based medical device company known for its innovative single-use surgical products. obp Surgical’s distinctive ONETRAC portfolio complements CooperSurgical’s existing offerings, including INSORB, Lone Star and the Doppler Blood Flow Monitor. The company also launched a new inserter designed for single-hand placement of Paragard last month to simplify the placement process for healthcare providers and boost Paragard as an accessible contraceptive choice. During the second quarter, COO launched new culture and transfer media, and premier cryo management software — embryo options — in Europe. It also launched the new FastTrack genomics testing globally.

CVI revenues are likely to be in the $2.606-$2.618 billion range (organic growth of 8.5-9.5%) in fiscal 2024.

The Cooper Companies is also well-positioned to benefit from the expanding CSI product portfolio. In the fiscal second quarter, CSI witnessed constant-currency revenue growth in two focus areas — fertility, and office and surgical products. Office and surgical product sales should continue to improve from the robust growth of PARAGARD, along with rising demand for stem cell storage. Although shipping interruptions at the company’s U.S. distribution center for medical devices and fertility products (following a systems upgrade in the fiscal second quarter) are likely to continue in the upcoming quarter, the situation is likely to improve.

Revenues from fertility increased 6% year over year to $129.3 million, indicating sustained solid performance. Sales of office and surgical products improved 11% to $197.9 million.

For fiscal 2024, CSI revenues are expected to be in the $1.286-$1.294 billion range, implying organic growth of 5.5-6.5%.

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.

Estimate Trend

The Zacks Consensus Estimate for the company's fiscal 2025 revenues is pegged at $4.19 billion, implying growth of 7.4% from the year-ago reported figure. The consensus mark for adjusted earnings per share is pinned at $4.06, indicating an improvement of 11.4% from the previous year’s recorded level.

In the past 30 days, COO’s earnings estimate for fiscal 2024 and 2025 has improved 1.4% and 1.5%, respectively.

Key Picks

Some other top-ranked stocks in the broader medical space are STAAR Surgical (STAA - Free Report) , Baxter International (BAX - Free Report) and Boston Scientific (BSX - Free Report) , each carrying a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

STAAR Surgical has a growth rate of 15% for 2025. Its earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 32.08%. STAAR Surgical’s shares have gained 19.1% compared with the industry’s 0.4% growth year to date.

Baxter has a long-term growth rate of 10%. Its earnings surpassed estimates in three of the trailing four quarters and met the same once, delivering an average surprise of 3.74%.

BAX’s shares have declined 1.8% year to date against the industry’s 13.2% growth.

Boston Scientific has a long-term growth rate of 12.6% for 2024. Its earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 7.18%.

BSX’s shares have risen 45% year to date compared with the industry’s 13.3% growth.

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