COO: Cooper Companies Stock Analysis

The Cooper Companies, Inc (COO) is a medical device company operating through two business
units namely Cooper Vision and Cooper Surgical. Cooper Vision business unit is linked with
vision care and quality lenses for contact lens wearers. Cooper Surgical Business Unit focuses on
providing women health clinicians with market medical products and treatment options for
delivering healthcare to women. This was a company founded in 1958, and has headquarters in
Pleasanton, CA.
CooperVision develops, manufactures and markets a range of soft contact lenses for the vision
correction market. Biofinity monthly lenses under a brand called Avaira. CooperVision markets
single use spherical, toxic and multifocal lenses. CooperSurgical developed, manufactures and
markets medical devices and procedural solutions to provide improved healthcare deliveries to
women. It also works in the market for healthcare delivery.
Analysis of Results
Cooper Companies Inc COO has reported adjusted earnings of US $2.05 in the second quarter of
2016. This beats the Zacks Consensus Estimate. Robust revenue growth drove the fortunes of the
company. Revenues rose 9% Y-O-Y including constant currency and including acquisitions.
Strong Asia Pacific sales and gross margin have expanded 130 bps in the quarter.
Cooper Companies expects overall contact lens market to expand at 4 to 6 percent range over the
coming five years. Growth rate is expected to be closer to 6 percent driven by transition to
dailies, geographic expansion and expansion of wearer base.
COO stocks have been rated as a strong BUY. This is linked to the convergence of positive
investment measures helping the stock to outperform the majority of stocks rates. Company's
strength can be observed in multiple areas including revenue growth, solid stock price
performance, reasonable valuation levels, excellent cash flows, from the operations and growing
profit margins. But the company has also experienced subpar growth in net income.
The company forecasts total revenue in the range of US $1.93 to 1.96 billion as against earlier
range of 1.87 to 1.90 billion. Management experts adjusted gross margin around 63 percent for
2016, which is lower than 64 percent earlier indicated. This is because of charges linked to idle
equipment and legacy hydrogel inventory at the CVI business. Lower gross margins from CSI
pertaining to recent acquisitions are able to impact gross margin in 2016. Operating expenses as
percent of revenue are expected to be around 39 percent while operating margins are projected at
24%. Capital expenditure is pegged around US $200 million and adjusted free cash flow at
around US $300 million.

Conclusion
The company has been outperforming other rivals in the market and will definitely pave the way
for strong profits in case investors are interested in stable returns.

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