CooperCompanies Q2 FY2025 results: Revenue tops $1bn, but stock hits 52-week low

Why Did CooperCompanies Stock Fall Despite a Strong Q2 FY2025?

CooperCompanies (NASDAQ: COO), a global leader in medical devices through its CooperVision and CooperSurgical units, reported second-quarter results for fiscal 2025 that reflected stable growth and strong operational execution. Revenue for the quarter ended April 30 stood at $1.002 billion, marking a 6% year-over-year increase and 7% growth in constant currency terms. Non-GAAP diluted EPS rose to $0.96, up 14% from the previous year’s $0.85. However, despite the solid earnings report and improved margins, CooperCompanies’ stock plunged to a 52-week low of $67.33 in the immediate aftermath of the results.

The contradiction between business performance and market reaction underscores the growing importance of forward-looking sentiment and revised outlooks in the medtech sector. The contact lens and fertility equipment maker’s decision to maintain a moderate revenue guidance range, amid sector-wide pressure from inflation-adjusted healthcare spend and global interest rate sensitivity, may have tempered institutional enthusiasm.

How Did CooperVision and CooperSurgical Drive Performance in the Quarter?

Revenue growth in Q2 FY2025 was led by both of CooperCompanies’ major divisions. CooperVision (CVI), which accounts for approximately 67% of total company revenue, generated $669.6 million in sales, a 5% increase from the same period last year and 7% on an organic basis. The Americas region delivered the strongest performance with 8% constant currency growth, followed by EMEA at 6% and Asia-Pacific at 5%.

Notably, CVI’s toric and multifocal lenses saw a 7% year-over-year rise, while sphere and other lenses gained 6%, reflecting consistent consumer demand across optical segments. CEO Al White credited the double-digit growth in the daily silicone hydrogel portfolio for underpinning the division’s strong showing and stated that capacity expansions remained on track to support future growth.

CooperSurgical (CSI), meanwhile, posted revenue of $332.7 million—an 8% reported increase and 7% organic growth. Office and surgical products within CSI delivered a 13% year-over-year jump, partially offset by a slower 2% rise in the fertility category. The divergence reflects the broader sector trend of elective procedures rebounding faster than fertility cycles, which are still regaining pre-pandemic momentum in certain geographies.

What Do the Profitability Metrics Reveal About CooperCompanies’ Financial Health?

The company’s margin profile improved in Q2, indicating positive operational leverage. Gross margin rose to 68% from 67% in the prior-year period, driven by efficiencies and favorable product mix across both divisions. Non-GAAP gross margin also stood at 68%, showcasing consistency.

Operating margin expanded from 17% to 18% on a GAAP basis, while the non-GAAP operating margin reached 25%, up from 24% last year. These improvements stemmed from targeted expense discipline, better utilization across manufacturing footprints, and a lower interest burden.

Indeed, interest expense declined from $28.9 million to $24.2 million year-over-year, aided by reduced debt levels and a more favorable rate environment. Capital expenditures stood at $78.1 million, against cash flow from operations of $96.2 million, resulting in free cash flow of $18.1 million—a figure that, while modest, demonstrates underlying liquidity strength.

Why Did Analyst Sentiment Turn Cautious After the Report?

Despite financial strength, sentiment turned bearish post-results, with major analysts downgrading the stock. JPMorgan downgraded CooperCompanies from “Overweight” to “Neutral,” citing concerns around the company’s full-year revenue outlook and its ability to sustain growth beyond Q3. Wells Fargo also slashed its price target, indicating that recent performance may already be priced in amid sector-wide normalization post-COVID.

Analysts noted that while the company continues to outperform peers in specific lens categories, the total addressable market for both vision correction and fertility-related products may face cyclical headwinds in 2025. Reimbursement pressure, competitive pricing, and regulatory scrutiny in Europe under MDR and IVDR rules were also flagged as medium-term risk factors.

What Does the Shareholder Activity Reveal About Institutional Confidence?

The stock’s drop to a 52-week low of $67.33 came despite continued support from heavyweight institutional investors such as Vanguard Group and BlackRock, who retain sizable positions. However, smaller adjustments from players like the California State Teachers Retirement System—who slightly reduced their holdings—signaled a softening in passive support.

Notably, CooperCompanies repurchased 537,200 shares during the quarter, worth $40.6 million at an average price of $75.60. The company still has $215.8 million available in its existing share buyback program. While not enough to offset market pessimism, the repurchase indicates confidence in long-term value from management’s perspective and acts as a cushion during periods of price volatility.

What Is CooperCompanies’ FY2025 Outlook and How Does It Compare With Sector Peers?

For the full fiscal year 2025, CooperCompanies now expects revenue between $4.107 billion and $4.146 billion, with organic growth projected at 5%–6%. CVI is expected to contribute between $2.759 billion and $2.786 billion in revenue (6%–7% organic growth), while CSI is forecasted to deliver between $1.347 billion and $1.359 billion (3.5%–4.5% organic growth).

The company also reaffirmed non-GAAP EPS guidance of $4.05 to $4.11. This comes at a time when other medtech peers, including Alcon and Bausch + Lomb, have faced pressure to revise their own forecasts due to macroeconomic headwinds, supply chain normalization, and slower-than-expected elective care recovery in some markets.

This consistent guidance places CooperCompanies in a comparatively stronger position in the sector, especially as it continues investing in strategic capacity expansions, product innovation, and international market penetration—particularly in Asia-Pacific.

What Are the Risks and Tailwinds Ahead for Investors?

On the risk side, ongoing regulatory compliance under EU MDR, potential currency volatility, and concentrated exposure to vision and fertility markets remain key concerns. Meanwhile, any delays in product approvals or commercial rollout in emerging markets could impact sequential growth.

Conversely, strong balance sheet metrics, moderate debt levels, and consistent free cash flow generation position the company to weather macroeconomic fluctuations. Analysts also point to the potential for selective M&A activity, especially in fertility diagnostics and vision correction tools, as a future growth lever in FY2026 and beyond.

Should Investors Buy, Sell, or Hold CooperCompanies Stock?

At its current 52-week low, CooperCompanies presents an intriguing valuation entry point for long-term investors. While short-term sentiment remains cautious due to lowered expectations and analyst downgrades, the fundamentals—including margin expansion, diversified product growth, and global scale—support a “Hold-to-Accumulate” outlook.

Institutional sentiment is stabilizing rather than bullish, and recent downgrades suggest more volatility may lie ahead. Retail investors may consider monitoring Q3 results for a clearer directional cue, while institutional players may look to scale in during further dips given the company’s predictable earnings stream.