Medical device company CooperCompanies (NASDAQ:COO) met Wall Streets revenue expectations in Q3 CY2025, with sales up 4.6% year on year to $1.07 billion. The company expects next quarter’s revenue to be around $1.02 billion, coming in 0.6% above analysts’ estimates. Its non-GAAP profit of $1.15 per share was 3.2% above analysts’ consensus estimates.
Revenue: $1.07 billion vs analyst estimates of $1.06 billion (4.6% year-on-year growth, in line)
Adjusted EPS: $1.15 vs analyst estimates of $1.11 (3.2% beat)
Revenue Guidance for Q4 CY2025 is $1.02 billion at the midpoint, roughly in line with what analysts were expecting
Adjusted EPS guidance for the upcoming financial year 2026 is $4.53 at the midpoint, beating analyst estimates by 3.1%
Operating Margin: 13.2%, down from 19.5% in the same quarter last year
Organic Revenue rose 3% year on year vs analyst estimates of 2.8% growth (19.6 basis point beat)
Market Capitalization: $15.11 billion
"We closed fiscal 2025 ahead of consensus revenue, earnings, and free cash flow expectations, and we enter 2026 with clear priorities to drive long-term shareholder value: accelerating top-line growth, improving profitability, accelerating cash generation, and continuing share repurchases," said Al White, CooperCompanies' President and CEO.
Company Overview
With a history dating back to 1958 and a portfolio spanning two distinct healthcare segments, Cooper Companies (NASDAQ:COO) develops and manufactures medical devices focused on vision care through contact lenses and women's health including fertility products and services.
Revenue Growth
A company’s long-term sales performance can indicate its overall quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Over the last five years, CooperCompanies grew its sales at a decent 11% compounded annual growth rate. Its growth was slightly above the average healthcare company and shows its offerings resonate with customers.
CooperCompanies Quarterly Revenue
We at StockStory place the most emphasis on long-term growth, but within healthcare, a half-decade historical view may miss recent innovations or disruptive industry trends. CooperCompanies’s recent performance shows its demand has slowed as its annualized revenue growth of 6.7% over the last two years was below its five-year trend.
CooperCompanies Year-On-Year Revenue Growth
We can dig further into the company’s sales dynamics by analyzing its organic revenue, which strips out one-time events like acquisitions and currency fluctuations that don’t accurately reflect its fundamentals. Over the last two years, CooperCompanies’s organic revenue averaged 6% year-on-year growth. Because this number aligns with its two-year revenue growth, we can see the company’s core operations (not acquisitions and divestitures) drove most of its results.
CooperCompanies Organic Revenue Growth
This quarter, CooperCompanies grew its revenue by 4.6% year on year, and its $1.07 billion of revenue was in line with Wall Street’s estimates. Company management is currently guiding for a 6.2% year-on-year increase in sales next quarter.
Looking further ahead, sell-side analysts expect revenue to grow 5% over the next 12 months, a slight deceleration versus the last two years. Despite the slowdown, this projection is above average for the sector and implies the market sees some success for its newer products and services.
Operating margin is an important measure of profitability as it shows the portion of revenue left after accounting for all core expenses – everything from the cost of goods sold to advertising and wages. It’s also useful for comparing profitability across companies with different levels of debt and tax rates because it excludes interest and taxes.
CooperCompanies’s operating margin might fluctuated slightly over the last 12 months but has remained more or less the same, averaging 16.5% over the last five years. This profitability was solid for a healthcare business and shows it’s an efficient company that manages its expenses well.
Analyzing the trend in its profitability, CooperCompanies’s operating margin of 16.7% for the trailing 12 months may be around the same as five years ago, but it has increased by 1.9 percentage points over the last two years.
This quarter, CooperCompanies generated an operating margin profit margin of 13.2%, down 6.3 percentage points year on year. This contraction shows it was less efficient because its expenses grew faster than its revenue.
Earnings Per Share
Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.
CooperCompanies’s remarkable 11.4% annual EPS growth over the last five years aligns with its revenue performance. This tells us it maintained its per-share profitability as it expanded.
CooperCompanies Trailing 12-Month EPS (Non-GAAP)
In Q3, CooperCompanies reported adjusted EPS of $1.15, up from $1.04 in the same quarter last year. This print beat analysts’ estimates by 3.3%. Over the next 12 months, Wall Street expects CooperCompanies’s full-year EPS of $4.13 to grow 5.5%.
Key Takeaways from CooperCompanies’s Q3 Results
We enjoyed seeing CooperCompanies beat analysts’ full-year EPS guidance expectations this quarter. We were also glad its EPS guidance for next quarter outperformed Wall Street’s estimates. Overall, this print had some key positives. The stock traded up 5% to $81.17 immediately following the results.
