ASX:COH

Stock Analysis Report

Executive Summary

Cochlear Limited provides implantable hearing solutions in the Americas, Europe, the Middle East, Africa, and the Asia Pacific.

Snowflake

Fundamentals

Flawless balance sheet with reasonable growth potential.

Share Price & News

How has Cochlear's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: COH has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

3.6%

COH

2.3%

AU Medical Equipment

0.4%

AU Market


1 Year Return

37.1%

COH

44.2%

AU Medical Equipment

14.8%

AU Market

Return vs Industry: COH underperformed the Australian Medical Equipment industry which returned 44.2% over the past year.

Return vs Market: COH exceeded the Australian Market which returned 14.8% over the past year.


Shareholder returns

COHIndustryMarket
7 Day3.6%2.3%0.4%
30 Day5.4%3.4%0.4%
90 Day9.0%12.1%4.6%
1 Year39.5%37.1%46.6%44.2%21.4%14.8%
3 Year91.7%82.2%64.5%57.2%40.2%21.4%
5 Year237.5%207.7%150.7%130.4%54.5%19.5%

Price Volatility Vs. Market

How volatile is Cochlear's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Cochlear undervalued compared to its fair value and its price relative to the market?

45.8x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: COH (A$219.68) is trading above our estimate of fair value (A$168.21)

Significantly Below Fair Value: COH is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: COH is poor value based on its PE Ratio (45.8x) compared to the Medical Equipment industry average (33.3x).

PE vs Market: COH is poor value based on its PE Ratio (45.8x) compared to the Australian market (18.6x).


Price to Earnings Growth Ratio

PEG Ratio: COH is poor value based on its PEG Ratio (4.6x)


Price to Book Ratio

PB vs Industry: COH is overvalued based on its PB Ratio (17.5x) compared to the AU Medical Equipment industry average (4.4x).


Next Steps

Future Growth

How is Cochlear forecast to perform in the next 1 to 3 years based on estimates from 12 analysts?

9.9%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: COH's forecast earnings growth (9.9% per year) is above the savings rate (2.3%).

Earnings vs Market: COH's earnings (9.9% per year) are forecast to grow faster than the Australian market (9.8% per year).

High Growth Earnings: COH's earnings are forecast to grow, but not significantly.

Revenue vs Market: COH's revenue (9.1% per year) is forecast to grow faster than the Australian market (3.6% per year).

High Growth Revenue: COH's revenue (9.1% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: COH's Return on Equity is forecast to be high in 3 years time (35.8%)


Next Steps

Past Performance

How has Cochlear performed over the past 5 years?

16.6%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: COH has high quality earnings.

Growing Profit Margin: COH's current net profit margins (19.4%) are higher than last year (18%).


Past Earnings Growth Analysis

Earnings Trend: COH's earnings have grown by 16.6% per year over the past 5 years.

Accelerating Growth: COH's earnings growth over the past year (12.6%) is below its 5-year average (16.6% per year).

Earnings vs Industry: COH earnings growth over the past year (12.6%) underperformed the Medical Equipment industry 29.5%.


Return on Equity

High ROE: COH's Return on Equity (38.1%) is considered high.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Cochlear's financial position?


Financial Position Analysis

Short Term Liabilities: COH's short term assets (A$635.0M) exceeds its short term liabilities (A$359.5M)

Long Term Liabilities: COH's short term assets (635.0M) exceeds its long term liabilities (293.8M)


Debt to Equity History and Analysis

Debt Level: COH's debt to equity ratio (25%) is considered satisfactory

Reducing Debt: COH's debt to equity ratio has reduced from 72.1% to 25% over the past 5 years.

Debt Coverage: COH's debt is well covered by operating cash flow (163%).

Interest Coverage: COH's interest payments on its debt are well covered by EBIT (78.4x coverage).


Balance Sheet

Inventory Level: COH has a high level of physical assets or inventory.

Debt Coverage by Assets: COH's debt is covered by short term assets (assets are 3.5x debt).


Next Steps

Dividend

What is Cochlear's current dividend yield, its reliability and sustainability?

1.50%

Current Dividend Yield


Dividend Yield vs Market

company1.5%marketbottom25%2.4%markettop25%5.6%industryaverage1.5%forecastin3Years1.8%

Current dividend yield vs market & industry

Notable Dividend: COH's dividend (1.5%) isn’t notable compared to the bottom 25% of dividend payers in the Australian market (2.35%).

High Dividend: COH's dividend (1.5%) is low compared to the top 25% of dividend payers in the Australian market (5.62%).


Stability and Growth of Payments

Stable Dividend: COH is not paying a notable dividend for the Australian market, therefore no need to check if payments are stable.

Growing Dividend: COH is not paying a notable dividend for the Australian market, therefore no need to check if payments are increasing.


Current Payout to Shareholders

Dividend Coverage: COH is not paying a notable dividend for the Australian market.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of COH's dividend in 3 years as they are not forecast to pay a notable one for the Australian market.


Next Steps

Management

What is the CEO of Cochlear's salary, the management and board of directors tenure and is there insider trading?

3.3yrs

Average management tenure


CEO

Dig Howitt (52yo)

1.8yrs

Tenure

AU$3,694,565

Compensation

Mr. Diggory William Howitt, also known as Dig, BE (Hons), MBA has been President of Cochlear Limited since July 31, 2017 and its Chief Executive Officer and Managing Director since January 3, 2018. Mr. How ...


CEO Compensation Analysis

Compensation vs Market: Dig's total compensation ($USD2.53M) is about average for companies of similar size in the Australian market ($USD3.01M).

Compensation vs Earnings: Dig's compensation has been consistent with company performance over the past year.


Management Age and Tenure

3.3yrs

Average Tenure

Experienced Management: COH's management team is considered experienced (3.3 years average tenure).


Board Age and Tenure

4.8yrs

Average Tenure

55yo

Average Age

Experienced Board: COH's board of directors are considered experienced (4.8 years average tenure).


Insider Trading

Insider Buying: COH insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

SellAU$111,997,05716 Sep 19
Pinnacle Fund Services Limited
EntityCompany
Shares549,986
Max PriceAU$203.64
BuyAU$75,737,44616 Sep 19
Pinnacle Fund Services Limited
EntityCompany
Shares380,550
Max PriceAU$199.02
SellAU$39,391,59804 Sep 19
Hyperion Asset Management Limited
EntityCompany
Shares192,860
Max PriceAU$213.65
BuyAU$35,480,10204 Sep 19
Hyperion Asset Management Limited
EntityCompany
Shares174,436
Max PriceAU$221.21
BuyAU$43426 Aug 19
Abbas Hussain
EntityIndividual
Role
Member of the Board of Directors
Non-Executive Independent Director
Shares160
Max PriceAU$108.45
SellAU$1,417,74329 Jul 19
Hyperion Asset Management Limited
EntityCompany
Shares6,441
Max PriceAU$220.11
BuyAU$7,633,07829 Jul 19
Hyperion Asset Management Limited
EntityCompany
Shares34,313
Max PriceAU$222.71
SellAU$12,222,98315 Jul 19
Hyperion Asset Management Limited
EntityCompany
Shares56,453
Max PriceAU$218.55
BuyAU$80,678,57605 Mar 19
Pinnacle Fund Services Limited
EntityCompany
Shares476,503
Max PriceAU$169.31
SellAU$24,274,22205 Mar 19
Pinnacle Fund Services Limited
EntityCompany
Shares136,637
Max PriceAU$177.65
SellAU$11,489,38104 Mar 19
Hyperion Asset Management Limited
EntityCompany
Shares57,701
Max PriceAU$199.12
BuyAU$777,62904 Mar 19
Hyperion Asset Management Limited
EntityCompany
Shares4,925
Max PriceAU$157.89
BuyAU$16326 Nov 18
The Vanguard Group, Inc.
EntityCompany
Shares769
Max PriceAU$0.21
SellAU$301,60621 Nov 18
The Vanguard Group, Inc.
EntityCompany
Shares1,933
Max PriceAU$156.03
BuyAU$9,252,20120 Nov 18
The Vanguard Group, Inc.
EntityCompany
Shares42,261
Max PriceAU$218.93
SellAU$10,759,23620 Nov 18
The Vanguard Group, Inc.
EntityCompany
Shares48,843
Max PriceAU$220.94

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Dig Howitt (52yo)

    CEO, MD

    • Tenure: 1.8yrs
    • Compensation: AU$3.69m
  • Richard Brook

    President of EMEA & Latin American Region

    • Tenure: 0yrs
    • Compensation: AU$1.86m
  • Jan Janssen

    Chief Technology Officer

    • Tenure: 2yrs
    • Compensation: AU$1.55m
  • Brent Cubis

    Chief Financial Officer

    • Tenure: 2.7yrs
    • Compensation: AU$1.09m
  • David Hackshall

    Chief Information Officer

    • Tenure: 4.3yrs
  • Tony Manna

    President of Americas Region

    • Tenure: 3.6yrs
    • Compensation: AU$1.49m
  • Jennifer Stevenson

    Head of Corporate Communications

    • Tenure: 0yrs
  • Kristina Devon

    Head of Investor Relations

    • Tenure: 0yrs
  • Anthony Bishop

    President of Asia Pacific Region

    • Tenure: 3.3yrs
    • Compensation: AU$940.84k
  • Dean Phizacklea

    Senior Vice President of Global Marketing

    • Tenure: 3.4yrs

Board Members

  • Andrew Denver (70yo)

    Non-Executive Director

    • Tenure: 12.8yrs
    • Compensation: AU$266.22k
  • Donal O’Dwyer (66yo)

    Non-Executive Director

    • Tenure: 14.3yrs
    • Compensation: AU$245.85k
  • Rick Holliday-Smith (69yo)

    Independent Chairman

    • Tenure: 9.3yrs
    • Compensation: AU$526.15k
  • Catriona Deans (52yo)

    Independent Non-Executive Director

    • Tenure: 4.8yrs
    • Compensation: AU$251.07k
  • Dig Howitt (52yo)

    CEO, MD

    • Tenure: 1.8yrs
    • Compensation: AU$3.69m
  • Yasmin Allen (55yo)

    Non-Executive Director

    • Tenure: 9.3yrs
    • Compensation: AU$276.22k
  • Bruce Robinson (62yo)

    Non-Executive Director

    • Tenure: 2.9yrs
    • Compensation: AU$256.22k
  • Glen Boreham (55yo)

    Independent Non-Executive Director

    • Tenure: 4.8yrs
    • Compensation: AU$271.22k
  • Abbas Hussain (54yo)

    Non-Executive Independent Director

    • Tenure: 0.9yrs
    • Compensation: AU$122.61k

Company Information

Cochlear Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Cochlear Limited
  • Ticker: COH
  • Exchange: ASX
  • Founded: 1981
  • Industry: Health Care Equipment
  • Sector: Healthcare
  • Market Cap: AU$12.704b
  • Shares outstanding: 57.83m
  • Website: https://www.cochlear.com

Number of Employees


Location

  • Cochlear Limited
  • 1 University Avenue
  • Macquarie University
  • Sydney
  • New South Wales
  • 2109
  • Australia

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
CHEO.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDDec 1995
COHASX (Australian Securities Exchange)YesOrdinary SharesAUAUDDec 1995
OC5DB (Deutsche Boerse AG)YesOrdinary SharesDEEURDec 1995
COHCHIA (Chi-X Australia)YesOrdinary SharesAUAUDDec 1995
CHEO.YOTCPK (Pink Sheets LLC)UNSPONSORD ADRUSUSDJan 2009

Biography

Cochlear Limited provides implantable hearing solutions in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. The company offers cochlear implants, including Nucleus 7 and Kanso sound pro ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/11/13 10:33
End of Day Share Price2019/11/13 00:00
Earnings2019/06/30
Annual Earnings2019/06/30


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.