Reasons to add Cooper Companies stock to your portfolio now

Key takeaways

• COO is seeing strong reliance on MyDay and MiSight growth, supporting the stock’s gains and strong outlook.
• The introduction of CooperVision’s premium lenses increases revenues, while the silicone hydrogel blend puts pressure on margins.
• The Cooper Companies restructuring enhances cash flow and savings, supporting ongoing stock repurchases.

Cooper Companies, Inc(COO) growth is fueled by the migration of premium lenses from CooperVision and MiSight’s leadership in myopia management, supported by CooperSurgical’s Women’s Health and Fertility portfolio. However, channel volatility, private label churn risks, Asia-Pacific weakness, and tariff/foreign exchange pressures weigh on near-term performance. Long-term opportunities remain strong, but execution and regional challenges could impact margin resilience and growth trajectory.

Shares of this Zacks Rank #2 (Buy) company have gained 15.5% in the past six months compared with the industry’s growth of 12.9%. The S&P 500 rose 14.5% during the mentioned time frame.

The Cooper Companies, with a market capitalization of $16.19 billion, is a global medical device company.

Cooper Companies, Inc(COO) growth is fueled by the migration of premium lenses from CooperVision and MiSight’s leadership in myopia management, supported by CooperSurgical’s Women’s Health and Fertility portfolio. However, channel volatility, private label churn risks, Asia-Pacific weakness, and tariff/foreign exchange pressures weigh on near-term performance. Long-term opportunities remain strong, but execution and regional challenges could impact margin resilience and growth trajectory.

Shares of this Zacks Rank #2 (Buy) company have gained 15.5% in the past six months compared with the industry’s growth of 12.9%. The S&P 500 rose 14.5% during the mentioned time frame.

The Cooper Companies, with a market capitalization of $16.19 billion, is a global medical device company.

COO’s bottom line is expected to improve by 7.8% over the next five years. Its earnings beat estimates in three of the trailing four quarters and delivered an average surprise of 2.41%.

What drives COO performance?

Accelerating MyDay’s Momentum Supports Sustained Stock Gains: CooperVision’s MyDay silicone hydrogel franchise stands out as a perpetual growth driver. Management highlighted accelerated global rollout, strong uptake of toric, multifocal lenses, and power variants, and expanding private label contract wins across the U.S. and Europe.

Importantly, the capacity constraints that previously limited penetration – particularly in the Asia-Pacific region – have been resolved, allowing for more consistent implementation. While daily silicone hydrogel lenses carry lower gross margins, MyDay generates higher revenue and operating profits per patient, supporting higher profits. This momentum reinforces confidence in continued market share gains and a stronger path for fiscal year 2026.

MiSight Myopia Control remains a high-growth, premium asset: MiSight continues to excel as the only FDA-approved contact lenses for myopia control, with 37% growth in Q4 and approximately $104 million in sales for FY 2025. Management has guided for 20-25% growth in FY 2026, with upside from launches in Japan and expanded European markets. The upcoming silicone hydrogel platform enhances comfort and adoptability, while growing global awareness of myopia in children supports long-term demand.

Although competition may dampen U.S. growth in the near term, Cooper’s clinical leadership and first-mover advantage position MiSight as a structurally attractive, high-margin growth vector in the medium term.

Reorganization leads to margin expansion and cash flow inflection: The recently completed reorganization and integration program is a material earnings incentive. Management expects approximately $50 million in annual pre-tax savings beginning in fiscal 2026, driven by streamlined support functions, AI-powered productivity, and disciplined control of operating expenses.

Despite modest pressure on gross margin from tariffs and product mix, operating margins expanded to 27% in the fourth quarter, with further improvement set for next fiscal year. Importantly, these savings translate into cash – Q4 free cash flow reached $150 million, and the company raised its cumulative free cash flow target for fiscal 2026-2028 to more than $2.2 billion, enhancing financial flexibility.

Appropriate capital allocation to shareholders enhances the attractiveness of equity: Cooper’s capital allocation strategy is increasingly focused on shareholder returns. The company repurchased nearly $300 million of stock in fiscal 2025 — roughly two-thirds of its free cash flow — and plans a similar allocation in fiscal 2026, backed by a $2 billion mandate. Net leverage improved to 1.76x, while free cash flow is expected to rise to US$575-625 million in FY2026 as capex normalizes. Adding total shareholder return (TSR) metrics to executive compensation further aligns management incentives with stock performance. Collectively, these actions strengthen the investment case for disciplined, shareholder-oriented value creation.

What’s weighing on the stock?

Total margin pressure from hybrid shift and tariffs: While operating leverage is improving, Cooper faces persistent headwinds in gross margin. Management acknowledged that increasing penetration of daily silicone hydrogel lenses – which is key to MyDay’s growth – has created pressure on gross margins, as these products are below divisional averages. Tariffs continue to impact margins, with management guiding for further gross margin declines in fiscal 2026 despite FX market tailwinds. While higher revenue per patient and cost savings help offset the impact on operating margin level, continued mix pressure could limit earnings upside if pricing power weakens or cost efficiencies fail to scale as expected.

Regional and end market volatility, especially in the Asia-Pacific region and fertility: The Asia-Pacific region remains a notable swing factor, with China down 28% in the fourth quarter due to weakness in low-margin e-commerce channels. Management is deliberately avoiding aggressive pricing, prioritizing profitability over volume, which could limit near-term regional growth.

In the CooperSurgical segment, fertility demand remains sensitive to consumer spending, particularly outside the U.S., prompting management to guide conservatively for the upcoming fiscal year despite early signs of improvement. Prolonged overall pressure or slower-than-expected recovery in these regions may dampen consolidated growth and delay the acceleration expected in the second half.

Trend estimation

The Zacks Consensus Estimate for fiscal 2026 revenue is pegged at $4.31 billion, which implies growth of 5.3% from last year’s reported figure. The consensus mark for adjusted EPS was set at $4.51, indicating a 9.5% improvement from the level recorded in the previous year.

In the past 60 days, COO earnings estimates for fiscal 2026 have moved north by 11 cents.

Price of Cooper Companies, Inc

Other key picks

Some other highly rated stocks in the broader medical space are Animal Health Vibro (PAHC) Insulet (bud) and Syncora Company (Cor).

Phibro Animal Health, currently sporting a Zacks Rank #1 (Strong Buy), has an estimated long-term growth rate of 12.8%. PAHC’s earnings beat estimates in each of the trailing four quarters, and the average surprise was 20.77%.

Shares of Phibro Animal Health have risen 47.1% versus the industry’s decline of 4.6% over the past six months.

Insulet, which currently carries a Zacks Rank of #2, has an estimated long-term growth rate of 29%. PODD’s earnings beat estimates in each of the trailing four quarters, and the average surprise was 17.75%.

Insulet shares lost 7.7% compared to the industry’s 4.6% decline in the past six months.

Cencora, which currently carries a Zacks Rank of 2, has an estimated long-term growth rate of 11.9%. COR’s earnings beat estimates in each of the trailing four quarters, and the average surprise was 4.9%.

Cencora shares are up 13.5% compared to the industry’s growth of 6.1% over the past six months.