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Category: Stock Market and CooperCompanies
Date: 5 June 2020 Stock Price: $313.86 We take a look at the 2nd quarter earnings for the 2020 fiscal year for CooperCompanies a company that supplies medical devices to the health industry. Has the company benefitted from the increased demand for medical goods due to the coronavirus pandemic?
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About CooperCompanies
CooperCompanies is a dynamic, innovative medical device company whose more than 12,000 employees improve lives around the world each and every day. Through our two business units - CooperVision and CooperSurgical – we provide a wide range of products and services designed to advance vision care and women's health. CooperVision is a world-leading manufacturer of contact lenses that addresses the most common and complex vision challenges, bringing a refreshing perspective that delivers real advantages for customers and wearers. CooperSurgical is committed to advancing the health of women, babies and families with its diversified portfolio of products and services focusing on women’s health, fertility and diagnostics.
Overview of CooperCompanies' 2nd quarter 2020 earnings report
The numbers we are interested in (for the quarter):
- Sales: $524.9 million (down from $654.3 million from the same quarter of the previous year)
- Sales decreased by -19.7% over the last 12 months
- Cost of sales: $201.4 million (down from $221.7 million for the same quarter of the previous year)
- Cost of sales decreased -9.2% over the last 12 months
- Net income: $11.5 million (down from $122.4 million for the same quarter of the previous year)
- Diluted earnings per share: $0.23 (down from $2.45 for the same quarter of the previous year)
- Dividend declared for the quarter: $0.16 (up from $0.14 for the same quarter of the previous year)
- Dividend yield: 2.4% (assuming the dividend paid this quarter is repeated for all quarters of the fiscal year)
- Diluted weighted-average shares outstanding: 49.6 million (up from 49.6 million for the same quarter of the previous year)
- Cash and cash equivalents: $79.8 million
- Cash and cash equivalents per share: $1.61
- Cash and cash equivalents makes up 0.51% of CooperCompanies's market capital
- Cash and cash equivalents makes up 1.22 % of CooperCompanies's total assets
- Trade receivable: $368.8 million
- Trade receivable makes up 5.7% of the CooperCompanies's total assets.
- Inventories: $568.2 million (up from $506.9 million for the same quarter of the previous year)
- Inventories makes up 8.7% of CooperCompanies's total assets
- CooperCompanies inventories grew by 12.1% over the last 12 months
- Stockholders equity in CooperCompanies: $3.627 billion
- Stockholders equity per share: $73.125
- The CooperCompany''s stock is trading at 4.3 times its stockholders equity per share which is outside the expected range of between 2 and 4 times that most firms tend to trade at
- For some perspective the average price to book value of firms in the S&P 500 is 3.7. Read more about the S&P 500 here
CooperCompanies' management commentary on their 2nd quarter 2020 earnings
SAN RAMON, Calif., June 04, 2020 (GLOBE NEWSWIRE) -- CooperCompanies (NYSE: COO) today announced financial results for the fiscal second quarter ended April 30, 2020.
Commenting on the results, Albert White, Cooper’s president and chief executive officer said, "The COVID-19 pandemic created unprecedented challenges and I’m extremely proud of our more than 12,000 employees and their level of commitment and dedication to our business, their communities and their families during this time. They’ve enabled us to keep our businesses running strong so we can continue supporting our customers and partners around the world. Because of them, we are well positioned to come out of this a stronger and more dynamic company.
Commenting on the results, Albert White, Cooper’s president and chief executive officer said, "The COVID-19 pandemic created unprecedented challenges and I’m extremely proud of our more than 12,000 employees and their level of commitment and dedication to our business, their communities and their families during this time. They’ve enabled us to keep our businesses running strong so we can continue supporting our customers and partners around the world. Because of them, we are well positioned to come out of this a stronger and more dynamic company.
- In fiscal Q2 2020, the company repurchased $47.8 million of common stock, roughly 160.8 thousand shares, under the existing share repurchase program at an average share price of $296.88. The program has $359.7 million of remaining availability and no expiration date.
Fiscal Year 2020 Guidance
Given the uncertainty on near-term financial results caused by the COVID-19 pandemic, the company is no longer providing fiscal year 2020 guidance
CooperCompanies (NYSE: COO) stock price history
The image below, obtained from Google, shows CooperCompanies stock price history for the last 5 years. And its been a good time for stockholders with the group's stock increasing from $175 a stock 5 years ago and its currently trading at $313.86 right now. That's a very strong return of 79.4% provided to CooperCompanies stockholders over the last 5 years.
CooperCompanies (COO) stock performance vs Abbot (ABT) stock performance
The image below shows the stock price performance of CooperCompanies (COO) compared to that of Abbot Laboratories (ABT) over the last 3 years. While the trends in the respective companies stock price performance is similar the levels of performance is very different though. The stock of Abbot Laboratories has easily outperformed that of CooperCompanies. Over the 3 year period the stock of CooperCompanies increased by 29.27% while the stock of Abbot increased by 80.95% over the same period of time
Recent coverage of CooperCompanies
The extract below covers the latest regarding CooperCompanies as obtained from Yahoo Finance
The Cooper Companies, Inc.’s COO second-quarter fiscal 2020 results are scheduled to release on Jun 4, after the closing bell. In the last reported quarter, the company reported a negative earnings surprise of 0.7%.
Fiscal Q2 Estimates
For the fiscal second quarter, the Zacks Consensus Estimate for revenues is pegged at $632.5 million, suggesting a decline of 3.3% from the year-ago quarter. The same for earnings stands at $2.63 per share, indicating a fall of 10.5% from the prior-year reported figure.
Factors to Note
Cooper Companies reports revenues under two major segments — CooperVision (CVI) and CooperSurgical (CSI). Better-than-expected performance across the Americas, Asia-Pacific and EMEA might get reflected in the company’s CVI segment’s fiscal second-quarter revenues. Further, accelerating growth in both Clariti and MyDay, and higher revenues from Single-use sphere lenses is likely to have contributed to the to-be-reported quarter’s revenues.
In fact, it is encouraging to note that for fiscal 2020, the company anticipates CVI sales of $2.07-$2.10billion, indicating growth of 5.5-7% at constant currency (cc)
Read the full article here
The Cooper Companies, Inc.’s COO second-quarter fiscal 2020 results are scheduled to release on Jun 4, after the closing bell. In the last reported quarter, the company reported a negative earnings surprise of 0.7%.
Fiscal Q2 Estimates
For the fiscal second quarter, the Zacks Consensus Estimate for revenues is pegged at $632.5 million, suggesting a decline of 3.3% from the year-ago quarter. The same for earnings stands at $2.63 per share, indicating a fall of 10.5% from the prior-year reported figure.
Factors to Note
Cooper Companies reports revenues under two major segments — CooperVision (CVI) and CooperSurgical (CSI). Better-than-expected performance across the Americas, Asia-Pacific and EMEA might get reflected in the company’s CVI segment’s fiscal second-quarter revenues. Further, accelerating growth in both Clariti and MyDay, and higher revenues from Single-use sphere lenses is likely to have contributed to the to-be-reported quarter’s revenues.
In fact, it is encouraging to note that for fiscal 2020, the company anticipates CVI sales of $2.07-$2.10billion, indicating growth of 5.5-7% at constant currency (cc)
Read the full article here
CooperCompanies (NYSE: COO) latest stock valuation
So based on CooperCompanies latest earnings report and financial guidance for their 2020 fiscal year, what is our target price for CooperCompanies? Our valuation models provide a target price (full value price) for CooperCompanies stock at $271.70 a stock (down slightly from last CooperCompanies stock valuation)
We therefore believe the stock of CooperCompanies is overvalued.
We usually recommend that long term fundamental and value investors look to enter the stock at around 10% below our target (full value) price of $271.70 a stock. So a good entry point into the stock of CooperCompanies would be at $244.50 or below. We therefore expect the stock of CooperCompanies to pull back from its current levels to levels closer to our target (full value) price in coming weeks and months.
We therefore believe the stock of CooperCompanies is overvalued.
We usually recommend that long term fundamental and value investors look to enter the stock at around 10% below our target (full value) price of $271.70 a stock. So a good entry point into the stock of CooperCompanies would be at $244.50 or below. We therefore expect the stock of CooperCompanies to pull back from its current levels to levels closer to our target (full value) price in coming weeks and months.
Next earnings release of CooperCompanies
It is expected that CooperCompanies will release their 3rd quarter 2020 earnings report in early September 2020