Numbers

The Numbers

Cooper is a 30-year compounder — contact lenses plus women's-health devices — that the market is currently treating like a broken growth story. The stock fell from $105 (October 2024) to $65 (April 2026), yet the underlying Quality Score is 90/100, the Fair Value estimate sits near $103, and the newest quarter delivered the strongest operating margin in four years. The single metric most likely to rerate or derate the stock from here is CooperVision growth — the 67%-of-revenue contact-lens franchise whose deceleration explains most of the derating since late 2024.

Snapshot

Is this a well-run business that will still be around in ten years?

The quality signals agree: this is a durable, predictable business with a reliably profitable core. The one caveat is the middling Piotroski — it's dinged because growth is prioritized over book-value accretion, which is the correct trade for a roll-up that keeps buying growth in fertility and specialty vision care.

Revenue & earnings power — 30-year view

Revenue compounded at a 14.6% 30-year CAGR. Operating margin averaged roughly 17% through the last decade with two clear drawdowns: FY2015 (Sauflon integration) and FY2020 (COVID elective-procedure stall). The FY2021 net margin of 101% is a one-time $2.4B tax benefit from an IP restructuring — it's excluded from the margin chart so the underlying trend reads cleanly. Net margin is structurally lower than operating margin because interest expense and amortization of intangibles from roll-up M&A take a big bite every year.

Recent quarterly trajectory — why the stock was punished

Revenue grew quarter-over-quarter through most of FY2024–25, but operating margin collapsed from 19.5% in 4Q24 to 13.2% in 4Q25 on inventory build and FX pressure — the proximate trigger for the 38% price drawdown. Then 1Q26 snapped back to 20.8% operating margin, the highest in four years, with earnings of $0.66 per share. If the market has this right, 1Q26 was the trough reversal; if wrong, 4Q25 was a warning about sustainable profitability.

Segment mix — what actually drives the model

CooperVision contributes 67% of revenue and the vast majority of operating profit; CooperSurgical is 33% and anchored by the Paragard IUD and a fertility platform built through acquisition. CooperVision grew 5.2% in FY2025, decelerating from 7.7% in FY2024 — that single data point is most of the reason the stock is where it is. CooperSurgical delivered steadier 4.9% growth.

Cash generation — are the earnings real?

Operating cash flow has run well above reported net income every year since 2017 — the ~$375M gap in FY2025 is non-cash amortization of intangibles left over from the Paragard and Generate Life Sciences deals. Strip out FY2021's one-time tax benefit and four-year (FY2022–25) FCF-to-NI conversion is 96%. The earnings are real. The story investors should see: elevated capex in FY2023–24 (new contact-lens manufacturing capacity in Costa Rica and Puerto Rico) has peaked; FCF rebounded to $434M in FY2025 and should keep rising as capex normalizes back toward 6–7% of revenue.

Capital allocation — an M&A machine that's slowing down

Cooper is historically an M&A roll-up: three transformational deals dominate the last decade — LifeGlobal fertility in FY2018 ($1.3B), Generate Life Sciences in FY2022 ($1.6B), and smaller bolt-ons between. FY2025 marks a pivot: dividends were eliminated (FY2024), acquisitions collapsed to $11M, and the company began repurchasing stock meaningfully for the first time ($290M). Stock-based compensation is well-behaved at ~$70M / 1.7% of revenue. The shift from "acquire to compound" to "repurchase at trough" is a high-return capital-allocation pivot if the 1Q26 margin rebound is durable.

Balance sheet — post-roll-up but not stretched

Leverage peaked at 3.5x Net Debt/EBITDA after the FY2018 LifeGlobal deal and 3.1x after Generate Life Sciences in FY2022. The company has deleveraged steadily; current Net Debt/EBITDA of 2.3x is below the 10-year average and comfortable for a recurring-revenue medical-device business. Altman Z-Score of 3.44 sits in the safe zone, and interest coverage of 6.8x handles the $100M annual interest bill comfortably. No refinancing risk; the balance sheet is not the story here.

Valuation — now vs its own 20-year history (the critical chart)

This is the most load-bearing chart on the page. Cooper trades at 13.8x EV/EBITDA today — roughly 1.3 standard deviations below the 5-year mean of 20.5x and 0.8 standard deviations below the 20-year mean of 17.8x. It is the cheapest the stock has been since 2013 outside of the 2008 panic. Every other marker agrees: P/B at 1.66x vs the 10-year average near 3.0x; P/FCF at 32x vs the 5-year mean closer to 50x. The market has repriced Cooper from "premium medical-device compounder" to "mid-single-digit grower" — the question for the investor is whether that repricing is correct.

Per-share economics

Share count has stayed near 200M for a decade — dilution is a non-issue. Revenue per share doubled from $10 to $20 over ten years. EPS has been lumpier because of M&A amortization, but FCF-per-share has also doubled. The $290M FY2025 buyback should begin to compound per-share metrics meaningfully if repeated.

Peer comparison

Cooper trades at the cheapest EV/EBITDA in the cohort — 13.8x vs Alcon and Edwards both around 31x and Hologic at 16x. The easy pushback is that Edwards earns a 50% ROIC and deserves the premium; Alcon is more diversified. But Cooper's 23% ROIC and 17% operating margin put it squarely in the middle of the group on profitability, not at the bottom — yet it trades with the only unprofitable name (Bausch & Lomb) on multiple. The gap is either opportunity or warning; the next two quarters of CooperVision growth will decide.

Fair Value & scenarios

The bottom line

The numbers confirm Cooper is a financially healthy, cash-generative business with a strong competitive position: 23% ROIC, 90/100 Quality Score, declining leverage, and real earnings (FCF-to-NI tracks ~96% over four years). They contradict the popular narrative that the business is structurally impaired — 1Q26 delivered the best operating margin in four years, capex is past its peak, and management has pivoted to shareholder-friendly buybacks for the first time. Watch CooperVision growth in the next two quarters: the stock re-rates only if that franchise reaccelerates past 6% organic; if growth stalls below 4%, the current 14x multiple may become the new normal regardless of the 58% spread to model Fair Value.