ASX:COH

Stock Analysis Report

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Executive Summary

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


Snowflake Analysis

Flawless balance sheet with solid track record.

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

-3.3%

COH

-1.8%

AU Medical Equipment

1.9%

AU Market


1 Year Return

-5.9%

COH

5.5%

AU Medical Equipment

-6.4%

AU Market

Return vs Industry: COH underperformed the Australian Medical Equipment industry which returned 1.5% over the past year.

Return vs Market: COH exceeded the Australian Market which returned -8.1% over the past year.


Shareholder returns

COHIndustryMarket
7 Day-3.3%-1.8%1.9%
30 Day0.4%1.1%4.2%
90 Day0.2%4.6%14.7%
1 Year-4.2%-5.9%7.5%5.5%-2.6%-6.4%
3 Year41.3%34.2%46.1%38.7%20.4%4.6%
5 Year146.0%124.3%87.0%73.6%43.3%12.8%

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?

36.12x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: COH (A$191.28) is trading above our estimate of fair value (A$182.68)

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 (36.1x) compared to the AU Medical Equipment industry average (26.9x).

PE vs Market: COH is poor value based on its PE Ratio (36.1x) compared to the Australian market (16x).


Price to Earnings Growth Ratio

PEG Ratio: COH is good value based on its PEG Ratio (0.7x)


Price to Book Ratio

PB vs Industry: COH is overvalued based on its PB Ratio (13.7x) compared to the AU Medical Equipment industry average (5x).


Next Steps

Future Growth

How is Cochlear forecast to perform in the next 1 to 3 years based on estimates from 14 analysts?

49.9%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: COH's forecast earnings growth (49.9% per year) is above the savings rate (2.3%).

Earnings vs Market: COH's earnings (49.9% per year) are forecast to grow faster than the Australian market (14.9% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: COH's revenue (14.2% per year) is forecast to grow faster than the Australian market (4.2% per year).

High Growth Revenue: COH's revenue (14.2% 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 (26.3%)


Next Steps

Past Performance

How has Cochlear performed over the past 5 years?

14.6%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: COH has a high level of non-cash earnings.

Growing Profit Margin: COH's current net profit margins (20.7%) are higher than last year (18.6%).


Past Earnings Growth Analysis

Earnings Trend: COH's earnings have grown by 14.6% per year over the past 5 years.

Accelerating Growth: COH's earnings growth over the past year (16%) exceeds its 5-year average (14.6% per year).

Earnings vs Industry: COH earnings growth over the past year (16%) exceeded the Medical Equipment industry 14.7%.


Return on Equity

High ROE: COH's Return on Equity (37.9%) is considered high.


Next Steps

Financial Health

How is Cochlear's financial position?


Financial Position Analysis

Short Term Liabilities: COH's short term assets (A$653.9M) exceed its short term liabilities (A$349.7M).

Long Term Liabilities: COH's short term assets (A$653.9M) exceed its long term liabilities (A$487.2M).


Debt to Equity History and Analysis

Debt Level: COH's debt to equity ratio (29%) is considered satisfactory.

Reducing Debt: COH's debt to equity ratio has reduced from 71.6% to 29% over the past 5 years.

Debt Coverage: COH's debt is well covered by operating cash flow (110.7%).

Interest Coverage: COH's interest payments on its debt are well covered by EBIT (54.2x coverage).


Balance Sheet


Next Steps

Dividend

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

1.73%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: COH's dividend (1.73%) isn’t notable compared to the bottom 25% of dividend payers in the Australian market (2.47%).

High Dividend: COH's dividend (1.73%) is low compared to the top 25% of dividend payers in the Australian market (6.6%).


Stability and Growth of Payments

Stable Dividend: COH's dividend payments have been volatile in the past 10 years.

Growing Dividend: COH's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (63.3%), COH's dividend payments are covered by earnings.


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

How experienced are the management team and are they aligned to shareholders interests?

3.8yrs

Average management tenure


CEO

Dig Howitt (53 yo)

2.58yrs

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 ($USD2.64M) is about average for companies of similar size in the Australian market ($USD2.94M).

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


Leadership Team

NamePositionTenureCompensationOwnership
Diggory Howitt
CEO, MD2.58yrsAU$3.69m0.065%
A$ 8.1m
Brent Cubis
Chief Financial Officer3.42yrsAU$1.09mno data
Jan Janssen
Chief Technology Officer2.75yrsAU$1.55m0.010%
A$ 1.3m
Richard Brook
President of EMEA & Latin American Regionno dataAU$1.86m0.010%
A$ 1.3m
Anthony Manna
President of Americas Region4.33yrsAU$1.49m0.0033%
A$ 417.1k
Anthony Bishop
President of Asia Pacific Region4.08yrsAU$940.84k0.0011%
A$ 143.2k
David Hackshall
Chief Information Officer5.08yrsno datano data
Kristina Devon
Head of Investor Relationsno datano datano data
Jennifer Stevenson
Head of Corporate Communicationsno datano datano data
Dean Phizacklea
Senior Vice President of Global Marketing4.17yrsno datano data
Jennifer Hornery
Senior Vice President People & Culture3.58yrsno datano data
Greg Bodkin
Senior Vice President of Supply Chain & Operational Excellenceno datano datano data

3.8yrs

Average Tenure

Experienced Management: COH's management team is considered experienced (3.8 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Diggory Howitt
CEO, MD2.58yrsAU$3.69m0.065%
A$ 8.1m
Andrew Denver
Independent Non-Executive Director13.5yrsAU$266.22k0.0064%
A$ 806.7k
Michael Daniell
Independent Non-Executive Director0.58yrno data0.0019%
A$ 232.4k
Donal O'Dwyer
Independent Non-Executive Director15yrsAU$245.85k0.0095%
A$ 1.2m
Roderic Holliday-Smith
Independent Chairman10.08yrsAU$526.15k0.016%
A$ 2.0m
Catriona Deans
Independent Non-Executive Director5.58yrsAU$251.07k0.0049%
A$ 614.4k
Yasmin Allen
Independent Non-Executive Director10yrsAU$276.22k0.0056%
A$ 709.9k
Bruce Robinson
Independent Non-Executive Director3.67yrsAU$256.22k0.0014%
A$ 178.4k
Glen Boreham
Independent Non-Executive Director5.58yrsAU$271.22k0.0046%
A$ 576.7k
Abbas Hussain
Non-Executive Independent Director1.67yrsAU$122.61k0.00034%
A$ 42.7k

5.6yrs

Average Tenure

59yo

Average Age

Experienced Board: COH's board of directors are considered experienced (5.6 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 13.8%.


Top Shareholders

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$12.565b
  • Shares outstanding: 65.69m
  • 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 Analysis2020/08/11 10:36
End of Day Share Price2020/08/10 00:00
Earnings2019/12/31
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.