The Cooper Companies, Inc. (COO): what the price requires
At today's price, The Cooper Companies, Inc. (COO) is priced for +24.9% growth. boothcheck doesn't publish a fair value or a price target; it shows what the price assumes, so you can judge whether that bar is too high.
Generated: 2026-07-14 · Exported: 2026-07-16 · Source: https://boothcheck.com/report/COO
Headline
| Field | Value |
|---|---|
| Ticker | COO |
| Company | The Cooper Companies, Inc. |
| Current price | $70.84/sh |
| Composition | CooperVision - Toric and multifocal 33% / CooperVision - Sphere, other 34% / CooperSurgical - Office and surgical 20% / CooperSurgical - Fertility 13% |
What The Price Requires (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | whole-company |
| Operating margin needed | 7.1% |
| Operating margin today | 13.0% |
| Margin compression implied | -5.9pp |
| Implied growth | 24.9% |
| Multiple paid | 30x operating income |
The operating-margin requirement is derived from the framework's value band at year 12, a separately labeled basis from the headline growth/duration solve.
Solve inputs: computed at a 8.7% cost of capital with 4% terminal growth over a 5-year stage; each 1pp of cost of capital moves the implied operating-profit growth ~8.3pp.
How unusual the bet is: elevated
| Reference | Value |
|---|---|
| vs own history | +0.62σ |
| cohort percentile (of 112 peers) | 77 |
| sustained it ~5 years at this level | 30% |
| implied end-window share | 0% |
Valuation X-Ray
Asset, earnings-power and peer-multiple models all land far below the price; ONLY the growth-DCF reaches it. The bet is durable compounding the static frames structurally cannot price (a moat/durability premium).
How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 7.29x | 4 | expensive |
| Earnings | 4.36x | 4 | expensive |
| Relative | 1.51x | 3 | expensive |
| Growth | 1.04x | 3 | expensive |
Families that justify the price: Growth Families that call it expensive: Asset, Earnings, Relative
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 8.0%); the inversion above states its own rate.
Per-Model Detail (n=14)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $68.30 | 1.04x | yes | FCF base $0.6B, growth 6% (input: historical growth), terminal g 4.0%, WACC 8.0%, 6yr projection |
| DCF Exit Multiple | Growth | $69.51 | 1.02x | yes | Exit EV/EBITDA: 23.2x / 25.2x / 27.2x (bear / base = today's held flat / bull), 6yr |
| Relative Valuation | Relative | $46.88 | 1.51x | yes | P/E 34.37x (blended: static sector reference 24x + trailing (TTM) 59x), scenarios: 28.7x / 34.4x / 40.0x (bear / base = reference held flat / bull), EV/EBITDA 18.75x |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | — | — | no | — |
| Simple Excess Return | Asset | $13.07 | 5.42x | yes | BV/sh $42.25, ROE (TTM) 2.9%, ke 9.3% |
| Two-Stage Excess Return | Asset | $7.73 | 9.16x | yes | 5yr excess ROE then converge to ke=9.3% |
| Discounted Future Market Cap | Growth | $54.16 | 1.31x | yes | Rev $4.2B, growth 6% (input: historical growth; tapered), Terminal P/S: 2.7x / 3.3x / 3.8x (bear / base = today's held flat / bull, cap 8x) |
| Growth-Adjusted P/E | Relative | — | — | no | — |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | $16.51 | 4.29x | yes | Normalized EBIT (5y avg op income, one-time charges added back) $0.57B × (1−21%) / WACC 8.0% → EPV (no growth) |
| Residual Income | Asset | $5.73 | 12.36x | yes | BV $42.25 + 5yr PV of (ROE (TTM) 2.9% − Kₑ 9.3%) × BV; BV grows 1.9%/yr |
| Graham Number | Asset | $33.35 | 2.12x | yes | √(22.5 × EPS $1.17 × BVPS $42.25) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | $40.72 | 1.74x | yes | EBITDA $0.64B × sector EV/EBITDA 16.0x |
| FCF Yield | Earnings | $19.68 | 3.60x | yes | FCF $569.5M / Kₑ 9.3% — zero-growth perpetuity |
| SBC-Adj FCF Yield | Earnings | $16.01 | 4.42x | yes | SBC-adj FCF $0.50B (FCF $0.57B − SBC $0.07B) capitalized at Kₑ |
| Ben Graham Formula | Earnings | $0.98 | 72.29x | yes | EPS $1.17 × (8.5 + 2×-5.0%) × (4.4 / 5.3%) (excluded from median) |
| ROIC-Justified P/B | Asset | — | — | no | — |
| P/Sales Sector | Relative | $86.79 | 0.82x | yes | Revenue $4.23B × sector P/S 4.0x |
| PEG Fair Value | Relative | — | — | no | — |
| Earnings Yield | Earnings | $12.65 | 5.60x | yes | EPS $1.17 / required return 9.3% (Rf 4.3% + ERP 5.0%) |
| Funds From Operations Multiple | Relative | — | — | no | — |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Solvency
| Field | Value |
|---|---|
| Net debt | $2.3b |
| Net debt / NOPAT (after-tax) | 5.42x |
| Net debt / operating income (pre-tax) | 4.28x |
| Interest coverage | 5.8x |
| Share count CAGR (buyback) | -0.5% |
| Burning cash | no |
Bullet Takeaways
- Cooper is two durable medical franchises in one: CooperVision in contact lenses and CooperSurgical in fertility and women's health. The contact-lens business is the engine, and the standout line is MiSight, the myopia-control lens for children, which grew 23% in the latest quarter.
- At $65.91 only the forward-growth methods reach the price. The asset, earnings-power, and peer-multiple lenses all land well below it, so the market is paying for durable compounding that the static frames cannot price.
- Inverting the price implies roughly 23% annual operating-income growth for five years, a pace within what Cooper has recently delivered but demanding in how long it must persist. The multiple sits at the very top of its medical-device peer group, which is the central risk.
Bull Case
What the standard models miss about Cooper is the quality of its recurring revenue. A contact-lens wearer is a subscriber in everything but name: daily disposables get reordered every few weeks, for years, and the switching cost is a fresh eye exam and a new fitting. The asset-based lens reads Cooper as expensive because book value per share of about $42 against a $66 price looks rich, and the earnings-power lens reads it as expensive because trailing margins are thin. Both miss the annuity. CooperVision's FY2025 10-K describes the product mix that drives the renewals: lenses with "aspherical optical properties, more higher oxygen permeable lenses such as silicone hydrogels, and myopia management contact lenses for children aged 8 to 12" (accession 0001628280-25-055615). That last category is the growth story the multiple is paying for.
The trajectory backs it up. Fiscal Q2 2026 revenue was $1.082B, up 8% reported and 5% organic, and management raised full-year 2026 guidance to revenue of $4.306B to $4.346B, non-GAAP EPS of $4.58 to $4.66, and free cash flow of $600M to $625M. CooperVision is guided to $2.883B to $2.908B at 3.5% to 4.5% organic growth, the steady core, while MiSight grew 23% to $28M in the quarter. MiSight matters out of proportion to its size: childhood myopia is rising globally, the lens is the only FDA-approved product cleared to slow its progression, and a child fitted at eight becomes a multi-decade customer. CooperSurgical adds a second secular tailwind in fertility, where demand is structurally growing as parenthood shifts later in life.
The price reflects all of this, and the question is whether the compounding is durable enough to justify it. Inverting the $65.91 price puts the market at about 28x company-wide operating income, which solves to roughly 23% annual operating growth over five years. That rate is within what Cooper has recently posted; the stretch is duration, not the near-term pace. For a business with two secular growth drivers, recurring revenue, and a free-cash-flow guide above $600M, paying up for durability is a defensible bet, even if it is not a cheap one.
Bear Case
The honest place to start the bear case is the disagreement among the methods, because it is stark. Only the growth-DCF lens reaches the $65.91 price (June 27, 2026). Every conservative frame lands far below it: simple excess return near $13, Earnings Power Value near $17, residual income near $6, and the FCF-yield capitalization near $20. When the asset and earnings-power methods cluster at a quarter to a third of the price and only the most assumption-heavy forward model agrees with the market, the conservative methods are usually the more honest read. They are saying the same thing the priced-in solve says from the other direction: the price needs about 23% operating growth to hold for five years, and the multiple sits at the very top of the medical-device peer distribution, well beyond the upper quartile.
The second problem is the margin gap. Cooper's current operating margin runs near 12%, but the price implies the business sustains a margin and growth combination that leaves little room for disappointment. Trailing ROE has been depressed, in the low single digits, which is why the book-value-anchored models read so poorly. The company also carries net debt near $2.3B against trailing operating income of about $498M, leverage above 4x operating income with interest coverage around 5x. That is manageable for a steady cash generator, but it removes the balance-sheet cushion that would otherwise soften a multiple compression.
The third risk is what a single growth driver does to a premium multiple. If CooperVision's organic growth slips from the mid-single digits, or if MiSight adoption plateaus rather than compounds, the durability premium the price is paying for evaporates, and the stock has to fall back toward the cluster of conservative methods. Contact lenses are a competitive category against Johnson & Johnson's Acuvue and Alcon, both larger, and pricing pressure from those rivals or from private-label entrants would hit exactly the organic growth line the bull case depends on. The bet here is not that Cooper is fragile. It is that a high-quality business priced at the top of its peer range has to keep executing flawlessly to avoid a derating.
Valuation
At $65.91, inverting the price puts the market at roughly 28x company-wide operating income, which solves to about 23% annual operating growth over a five-year stage at an 8.7% cost of capital. Each percentage point of cost of capital moves the implied growth figure by about 8 points, so the read is rate-sensitive, but the level is high regardless. The near-term rate is within Cooper's recent history; the demand is on how long it must persist.
The model families split sharply, which is itself the signal. The growth lens reaches the price: DCF perpetual growth lands near $71 and the exit-multiple DCF near $67. Nothing else does. The relative-multiple lens lands near $42 at a blended 33x P/E, the asset lens lands far lower with simple excess return near $13 and residual income near $6, and the earnings-power lens lands near $17 on EPV. The blended X-ray sits near $42, well under the price. Only the methods that explicitly extrapolate growth justify the quote.
The valuation question is therefore narrow and clear. The price is a bet on durable compounding that the asset and earnings-power frames structurally cannot capture, the moat-and-recurring-revenue premium of a subscription-like medical franchise. If you believe CooperVision's mid-single-digit organic growth and MiSight's faster ramp hold for years, the forward methods are right and the price is fair. If growth fades, the gravity of the conservative methods pulls the stock toward the low $40s. The deciding variable is the durability of organic growth, not any single quarter's number.
Catalysts
The raised fiscal 2026 guidance is the near-term frame. Management lifted full-year targets to revenue of $4.306B to $4.346B, non-GAAP EPS of $4.58 to $4.66, and free cash flow of $600M to $625M, with CooperVision guided to 3.5% to 4.5% organic growth. The next two quarters test whether the company holds or raises that frame, and whether free cash flow converts as promised.
MiSight is the catalyst that decides the premium. The myopia-control lens grew 23% to $28M in fiscal Q2 2026. Continued acceleration would validate the durability the multiple is paying for; a plateau would undercut it. Watch the quarterly MiSight growth rate and any expansion of fitting locations or geographies.
The MADE BETTER Promise, launched April 9, 2026, beginning with the MyDay daily disposable family using bio-attributed plastic in its blisters, is a brand and sustainability initiative aimed at premium positioning. Its effect on mix and pricing is worth tracking. On the CooperSurgical side, fertility demand trends and any product launches in that segment are the second growth read. Competitive pricing moves from Alcon and Johnson & Johnson in the broader contact-lens market are the main external risk to the organic growth line.
Sources: Cooper Q2 2026 earnings summary (Quartr), Cooper Q1 2026 transcript (Motley Fool), CooperCompanies 2026 outlook (Simply Wall St)
Peer Cohorts (Per Segment, With Filing Citations)
CooperVision / CooperSurgical (reported)
- BLCO (Bausch & Lomb Corp)
- (no filing in the citation store)
- ALC (Alcon Inc.)
- (no filing in the citation store)
- BDX (BECTON DICKINSON & CO)
- (no filing in the citation store)
- SYK (STRYKER CORP)
- (no filing in the citation store)
- ZBH (ZIMMER BIOMET HOLDINGS, INC.)
- (no filing in the citation store)
- STE (STERIS plc)
- (no filing in the citation store)
- NVST (ENVISTA HOLDINGS CORPORATION)
- (no filing in the citation store)
- HAE (HAEMONETICS CORPORATION)
- (no filing in the citation store)
Methodology Note
- Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
- Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
- Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
- Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.
Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.