Here's Why You Should Buy Cooper Companies (COO) Stock Now

The Cooper Companies, Inc. COO is likely to gain from solid prospects of its core CooperVision (“CVI”) unit, which put up a solid show in the fiscal first quarter of 2020.

Shares of this company have slipped 5% compared with the industry’s 23.6% decline in a year’s time. The current level compares unfavorably with the S&P 500 index’s 3.4% drop over the same time frame.

This $17.27-billion specialty medical device company currently has a Zacks Rank #2 (Buy). Cooper Companies’ earnings are expected to grow 10.8% over the next five years. Also, the company has a trailing four-quarter positive earnings surprise of 2.2%, on average.

Let’s take a closer look at the factors that are working in favor of the company right now.

CVI Drives Cooper Companies

CooperVision — Cooper Companies’ core business segment — has been consistently driving the company’s top line. Notably, the unit manufactures and sells a wide range of contact lenses.

In the recently-reported first quarter of fiscal 2020, CVI revenues grossed $485.2 million, up 3% at constant currency (cc) and 4% on a reported basis.

Per management, the segment saw a substantial uptick in revenues from sub units like — Single-use sphere lenses (28% of CVI), Toric (32% of CVI), Multifocal (11% of CVI) and Non single-use sphere (29% of CVI).

The Cooper Companies, Inc. Price and Consensus

The Cooper Companies, Inc. Price and Consensus

The Cooper Companies, Inc. price-consensus-chart | The Cooper Companies, Inc. Quote

Geographically, the segment witnessed an improvement in revenues in the Americas and EMEA. Further, the segment’s gross and operating margins improved in the quarter.

Reflective of these, management expects fiscal 2020 CVI revenues between $2,070 million and $2,100 million, mirroring an improvement of 5.5-7% at cc.

Reflective of these, Cooper Companies raised its fiscal 2020 adjusted earnings per share (EPS) view. Notably, the company expects adjusted EPS within $12.80-$13.20, up from the previously communicated range of $12.60-$13.00.

Estimates Picture

For fiscal 2020, the Zacks Consensus Estimate for revenues is pegged at $2.80 billion, indicating an improvement of 5.5% from the year-ago quarter figure. For adjusted EPS, the same stands at $12.94, suggesting growth of 4.8% from the year-ago reported figure.

Other Key Picks

Other top-ranked companies in the broader medical sector include Stryker Corporation SYK, Accuray Incorporated ARAY and IDEXX Laboratories, Inc. IDXX, each carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Stryker’s long-term earnings growth is expected at 10.1%.

Accuray’s fiscal fourth-quarter earnings are expected to skyrocket 200%.

IDEXX Laboratories’ first-quarter earnings growth is projected at 6.8%.

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