The Cooper Companies Inc (COO, Financial) recently showcased a daily gain of 4.12%, contributing to a 3-month gain of 3.21%. With an Earnings Per Share (EPS) of 1.46, investors are keen to determine whether the stock is fairly valued. This analysis aims to explore The Cooper's valuation, encouraging readers to delve into the comprehensive financial insights that follow.
Company Introduction
The Cooper Companies Inc, a major player in the U.S. eye care sector, operates through two segments: CooperVision and CooperSurgical. CooperVision deals primarily with contact lenses, while CooperSurgical focuses on reproductive and women's health. The company's stock price currently stands at $96.65, with a market cap of $19.20 billion, aligning closely with the GF Value of $103.01, suggesting a fair valuation. This alignment sets the stage for a deeper examination of The Cooper's intrinsic value.
Understanding GF Value
The GF Value is a unique measure reflecting the true intrinsic value of a stock, based on historical trading multiples, a GuruFocus adjustment factor, and future business performance estimates. For The Cooper, the GF Value suggests the stock is fairly priced at its current level. This valuation indicates that the long-term return of The Cooper's stock should closely mirror the rate of its business growth, barring significant market fluctuations.
Financial Strength and Stability
Investing in companies with robust financial health is crucial to avoid potential capital loss. The Cooper's financial strength, with a cash-to-debt ratio of 0.05, ranks lower than 95.7% of its peers in the industry, which may raise concerns about its debt levels. However, its financial strength score of 6 out of 10 indicates a fair balance sheet status.
Profitability and Growth Prospects
The Cooper has maintained profitability over the past decade, with a notable operating margin of 14.64%, ranking it higher than 77.83% of its industry counterparts. The company has also demonstrated strong growth, with an average annual revenue increase of 13.8%. These factors combined suggest a robust business model capable of sustaining profitable growth.
Efficiency in Capital Utilization
A critical aspect of assessing a company's profitability is comparing its Return on Invested Capital (ROIC) against its Weighted Average Cost of Capital (WACC). For The Cooper, the ROIC stands at 3.35, which is below the WACC of 10.32, indicating that the company may not be generating adequate returns relative to its capital costs.
Conclusion
In conclusion, The Cooper Companies Inc (COO, Financial) appears to be fairly valued based on current assessments. With solid financial health and strong profitability, coupled with consistent growth, The Cooper represents a potentially stable investment. Investors interested in further details can explore The Cooper's 30-Year Financials here.
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This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
