Cooper Companies (COO) Margin Decline Tests Bullish 21% Earnings Growth Narrative

Cooper Companies (COO) just wrapped up FY 2025 with fourth quarter revenue of $1.1 billion and basic EPS of $0.43, capping a trailing twelve month run of $4.1 billion in revenue and $1.87 in EPS that investors will be dissecting closely. The company has seen revenue move from $3.9 billion and EPS of $1.97 over the twelve months to Q4 2024 to $4.1 billion and EPS of $1.87 over the latest twelve month period, setting a nuanced backdrop for how the current year’s performance fits into its longer term earnings and margin story.

See our full analysis for Cooper Companies.

With the headline numbers on the table, the next step is to see how this trajectory lines up with the dominant narratives around Cooper Companies, from earnings growth potential to margin sustainability.

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Margins Slip as Net Income Eases Back

• Trailing twelve month net income slipped from $415.4 million in Q1 2025 to $374.9 million by Q4 2025, alongside net margin easing from 10.1% to 9.2% year over year.
• Consensus narrative expects automation and cost discipline to lift margins and free cash flow, which contrasts with the recent margin dip.
  • Analysts are modeling profit margins rising to 16.2% over three years even though current trailing margin is 9.2% and down from 10.1%.
  • This gap between forecasted margin expansion and the recent $40.5 million drop in trailing net income prompts investors to scrutinize how quickly efficiency gains can flow through.

Earnings Forecasts Race Ahead of 5.2% Revenue Growth

• Earnings are forecast to grow about 21.4% per year while revenue is only expected to grow around 5.2% annually, slower than the US market’s 10.6% pace.
• Consensus narrative leans bullish on new products like MyDAY and MiSight driving growth, yet the current revenue trend remains moderate.
  • Quarterly revenue moved from $964.7 million in Q1 2025 to $1.1 billion in Q4 2025 and analysts see revenue reaching about $4.9 billion by 2028.
  • Expected earnings of $786.2 million and EPS of $3.95 by roughly 2028 rely on that 21.4% earnings growth materializing even though recent trailing net income is $374.9 million.

As forecasts call for faster profit growth than sales, many bulls are watching closely to see whether MyDAY and other launches can overcome slower industry growth.

🐂 Cooper Companies Bull Case

Rich 43.2x P/E Versus Slowing Five Year Earnings

• The stock trades on a 43.2x trailing P/E versus 28.9x for the US Medical Equipment industry and 26.2x for peers, even as five year earnings declined at about 43% per year and net margin slipped to 9.2%.
• Bears highlight that a premium multiple on shrinking historical earnings leaves little room for disappointment, despite a modeled DCF fair value of about $113.04 versus the current $81.40 share price.
  • The roughly 28% discount to DCF fair value sits alongside a weaker trailing margin profile and that steep multi year earnings decline.
  • With the stock below the allowed analyst target reference of $88.88 yet above what recent earnings trends might justify, skeptics focus on the risk if the 21.4% earnings growth forecast falls short.

For cautious investors, the combination of a 43.2x multiple and a five year earnings slide is a clear reason to test every growth assumption twice.

🐻 Cooper Companies Bear Case

Next Steps

To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for Cooper Companies on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.

Spot something in the numbers others might be missing? In just a few minutes, you can shape that view into a full narrative, Do it your way.

A good starting point is our analysis highlighting 2 key rewards investors are optimistic about regarding Cooper Companies.

See What Else Is Out There

Cooper Companies’ rich valuation, slipping margins, and slower revenue growth versus earnings forecasts leave little room for missteps or disappointment.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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