Stock Analysis

Is It Too Late To Consider Buying The Cooper Companies, Inc. (NYSE:COO)?

NasdaqGS:COO
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Today we're going to take a look at the well-established The Cooper Companies, Inc. (NYSE:COO). The company's stock received a lot of attention from a substantial price increase on the NYSE over the last few months. With many analysts covering the large-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, could the stock still be trading at a relatively cheap price? Let’s examine Cooper Companies’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

Check out our latest analysis for Cooper Companies

What Is Cooper Companies Worth?

The stock seems fairly valued at the moment according to my valuation model. It’s trading around 9.8% below my intrinsic value, which means if you buy Cooper Companies today, you’d be paying a reasonable price for it. And if you believe that the stock is really worth $350.51, then there isn’t much room for the share price grow beyond what it’s currently trading. In addition to this, Cooper Companies has a low beta, which suggests its share price is less volatile than the wider market.

What does the future of Cooper Companies look like?

earnings-and-revenue-growth
NYSE:COO Earnings and Revenue Growth December 20th 2022

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. Cooper Companies' earnings over the next few years are expected to increase by 74%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.

What This Means For You

Are you a shareholder? It seems like the market has already priced in COO’s positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?

Are you a potential investor? If you’ve been keeping tabs on COO, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for the company, which means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

With this in mind, we wouldn't consider investing in a stock unless we had a thorough understanding of the risks. At Simply Wall St, we found 1 warning sign for Cooper Companies and we think they deserve your attention.

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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.