/Cooper%20Companies%2C%20Inc_%20building%20logo-by%20Sundry%20Photography%20via%20Shutterstock.jpg)
The Cooper Companies (COO), headquartered in San Ramon, California, develops, manufactures, and markets contact lens wearers. Valued at $18.6 billion by market cap, the company’s products include contact lenses for the vision care market and diagnostic products, surgical instruments, and accessories for gynecologists and obstetricians.
Companies worth $10 billion or more are generally described as “large-cap stocks,” and COO perfectly fits that description, with its market cap exceeding this mark, underscoring its size, influence, and dominance within the medical instruments & supplies industry. COO holds a strong position in the U.S. contact lens market, driven by its diverse brand portfolio, which includes well-known names like Proclear, Biofinity, MyDay, and Clariti. Through strategic acquisitions, such as the recent purchase of a fertility company, the company continues to expand its product offerings and demonstrate financial strength. Additionally, its commitment to R&D, particularly in myopia management and contact lens technology, highlights its dedication to innovation and staying competitive in the market.
Despite its notable strength, COO slipped 17.7% from its 52-week high of $112.38, achieved on Sep. 16. Over the past three months, COO stock has declined 15.8%, underperforming the Dow Jones Industrials Average’s ($DOWI)1.9% gains during the same time frame.
In the longer term, shares of COO rose 1.1% over the past six months but fell marginally over the past 52 weeks, underperforming DOWI’s six-month gains of 9.6% and solid 14.8% returns over the last year.
To confirm the bearish trend, COO has been trading below its 50-day moving average since late October. The stock is trading below its 200-day moving average since mid-December.
COO's underperformance is due to declining PARAGUARD sales and increased competition in the birth control market. Additionally, lower demand for torics and multifocals at the end of Q4 may continue into the upcoming quarter. Sales growth driven by the back-to-school season is expected to slow down in the first half of fiscal 2025. Furthermore, U.S. inventory reduction in October impacted myopia management sales in Q4, will likely continue to the next quarter.
On Dec. 5, COO shares closed down more than 1% after reporting its Q4 results. Its adjusted EPS of $1.04 surpassed the analyst estimates by 4%. The company’s revenues of $1 billion, missed analyst estimates marginally.
COO’s rival, Align Technology, Inc. (ALGN) shares lagged behind the stock, declining 14.3% on a YTD basis and 23.7% over the past 52 weeks.
Wall Street analysts are bullish on COO’s prospects. The stock has a consensus “Strong Buy” rating from the 15 analysts covering it, and the mean price target of $116.69 suggests a potential upside of 26.1% from current price levels.
