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Here's Why Cooper Companies Stock Valuation May Be Deceiving

Cooper Companies is slated to report earnings on Thursday, June 3

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The Cooper Companies, Inc. (NYSE:COO) is a global medical device company that operates through two business units, CooperVision and CooperSurgical. CooperVision develops a wide range of products for contact lens wearers and vision care in general. CooperSurgical offers a portfolio of products and services focused on medical devices and fertility & genomics. Cooper Companies has a workforce of more than 12,000 with products sold in over 100 countries.

This afternoon, COO was last seen down 0.8% at $390.99. Shares of Cooper Companies stock are up 10% year-to-date, but are down about 5% from its record high of $415.96. Cooper Companies also provides a forward dividend of $0.06 and a dividend yield of 0.02%.

Furthermore, Cooper Companies is scheduled to release its second-quarter of 2021 financial results this week on Thursday, June 3. Following the release, COO will also host a conference call to discuss the results and corporate developments. Cooper Companies has beat earnings expectations on three of its last four earnings reports with three beats in a row as investors watch for Q2 earnings to be released.

For the second quarter of 2020, COO missed analyst estimates by a margin of $0.84 and reported an earnings per share (EPS) of $1.51. For the third quarter of 2020, Cooper Companies' EPS increased to $2.28 and beat expectations by a margin of $0.76. For the fourth quarter of 2020, COO reported another increase in earnings, rising to $3.16 per share and beating estimates by a margin of $0.07. For the first quarter of 2021, Cooper Companies posted an EPS of $3.17 and beat expectations by a margin of $0.39.

From a fundamental perspective, Cooper Companies stock looks like a great value play considering the stock’s current price-earnings ratio of 8.67. However, COO has a forward price-earnings ratio of 31.85, which is a huge difference comparatively. Analysts are looking hopeful, with 60% of the 10 in coverage sporting a "strong buy" recommendation. Overall, COO has potential to be a long-term winner, but Cooper Companies stock is far from being the best option on the market from a risk-reward perspective.

 
 

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