Is Cooper Companies Fairly Priced After Medical Device Acquisition and Recent Share Jump?

• Wondering if Cooper Companies offers great value or if there’s a better buy elsewhere? You’re not alone. Evaluating its current valuation could make all the difference for smart investors.
• Cooper Companies’ share price has jumped 6.5% over the past week and 3.4% in the last month. However, the stock is still down nearly 16% year-to-date and more than 25% over the past year.
• Headlines have focused on the company’s expansion in specialty healthcare markets and a strategic acquisition in its medical device division. This news flow has sparked renewed interest from both retail and institutional investors, placing the stock under a fresh spotlight.
• On our valuation checks, Cooper Companies scored 2 out of 6. By traditional measures, it’s not exactly a standout for undervaluation. A deeper dive into valuation methods (and a smarter approach at the end of this article) might reveal opportunities you could easily miss.

Cooper Companies scores just 2/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: Cooper Companies Discounted Cash Flow (DCF) Analysis

The Discounted Cash Flow (DCF) model projects a company’s future cash flows and brings them back to today’s value, helping investors estimate what a business is really worth based on its fundamentals rather than short-term market movements.

For Cooper Companies, the latest reported Free Cash Flow is $398.7 million. Analysts forecast strong growth ahead, with projections rising to $796 million by 2028. These estimates extend a decade forward, with total Free Cash Flow anticipated to exceed $1.3 billion by 2035, based on a blend of analyst inputs and further modeling.

Based on these cash flow projections and assumptions, the DCF analysis calculates an estimated intrinsic value of $99.11 per share. Compared to current market prices, this suggests the stock is trading at a 23.3% discount to its calculated fair value. This may imply it is undervalued.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Cooper Companies is undervalued by 23.3%. Track this in your watchlist or portfolio, or discover 924 more undervalued stocks based on cash flows.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Cooper Companies.

Approach 2: Cooper Companies Price vs Earnings (PE)

The price-to-earnings (PE) ratio is a widely used metric for valuing profitable companies like Cooper Companies. It offers a snapshot of how much investors are willing to pay for each dollar of earnings. A higher PE can often signal expectations of strong future growth, while a lower PE might reflect slower expansion or increased risk.

Cooper Companies currently trades at a PE ratio of 37x. This is notably higher than both the medical equipment industry average PE of 27.7x and the peer group average of 25.6x. Investors might see this premium as justified if the company’s growth prospects or profitability significantly outpace competitors. However, it could also indicate the stock is more expensive relative to its earnings.

To get a more tailored sense of fair value, Simply Wall St calculates a “Fair Ratio” for Cooper Companies, currently at 29.6x. This proprietary benchmark considers the company’s growth outlook, risk profile, profit margins, industry context, and market cap. Unlike simple peer or industry comparisons, the Fair Ratio provides a holistic view by factoring in elements often overlooked by standard valuation methods.

Comparing Cooper Companies’ actual PE of 37x with its Fair Ratio of 29.6x suggests the market is pricing in a significant premium. Since the difference exceeds 0.10, this signals the stock may be overvalued based on this approach.

Result: OVERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1440 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Cooper Companies Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let's introduce you to Narratives. A Narrative is a simple, yet powerful investment tool where you tell the story behind your numbers by combining your perspective on Cooper Companies’ future revenue, earnings, and profit margins with your own estimated fair value.

Unlike static metrics, Narratives connect your view of the business to a personalized valuation, making your investment process more dynamic and meaningful. On Simply Wall St’s Community page, investors of all experience levels can create and share these Narratives, helping you see how your assumptions stack up against others. Millions of investors use this to clarify their decisions.

Narratives also help you decide when to buy or sell by directly comparing your Fair Value to today’s market price. Even better, they auto-update whenever key news or earnings reports are released, so your forecasts and fair value always reflect the latest information.

For example, among investors tracking Cooper Companies, some have a Narrative forecasting a bullish target of $96 per share, highlighting successful new product launches and cost efficiencies, while others lean bearish at $66, concerned about intense pricing pressure and softness in key markets. This makes it easy to understand the reasoning behind each price target and to confidently refine your own investment thesis.

Do you think there's more to the story for Cooper Companies? Head over to our Community to see what others are saying!

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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