The Cooper Companies, Inc.COONASDAQ

Overview Intelligence Charts News Fundamentals

DCF Valuation

DCF Valuation Summary

Hold

Fair Value: $88.47 per share(market-calibrated)

+5.6%

Upside to Fair Value

Current

$83.78

Pure Model

$87.40

Fair Value

$88.47

Bull Case

$110.36

Bear Case

$67.04

Market Reality Check

Model Terminal Growth

3.00%

Market-Implied Growth

4.25%

Calibrated Growth

3.19%

Fair value uses 85% model / 15% market-implied terminal growth. Pure model: $87.40.

What's Driving This Ratingfor COO

↓

CapEx normalizing toward maintenance

Historical CapEx is 7.98% of revenue (heavy investment phase). Model fades this to 3.50% by Year 10, freeing up ~$275M in annual FCF. This is the biggest driver of long-term cash flow improvement.

↑

Margin expansion modeled

Current EBIT margin is 16.28% — below the sector mature average of 20.00%. Model expands margins as the business scales and operating leverage kicks in. Year 10 EBIT reaches $1.2B (19.03% margin).

→

Moderate revenue growth

Analyst consensus projects 5.56% revenue growth, fading to 3.00% by Year 10. Revenue reaches $6.1B (vs $4.1B today).

↔

Perpetuity and exit methods disagree

Perpetuity growth gives $65.70/share (20.2x terminal FCF) while exit multiple gives $109.10/share (36.6x terminal FCF). The 24x EV/EBITDA exit reflects current market multiples, while the perpetuity method with 3.00% growth is more conservative. The base case averages both methods.

🎯

Market pricing in higher long-term growth

To justify $83.78, the market implies 4.25% perpetual growth — 125bps above the model's 3.00%. This suggests the market sees additional growth catalysts (AI, new products, market expansion) not captured in analyst estimates.

✓

Strong cash flow conversion

Year 10 FCF/EBITDA conversion of 65.60% indicates efficient cash generation. FCF reaches $1.2B by Year 10 (18.78% FCF margin).

Weighted Average Cost of Capital (WACC)

Cost of Equity (CAPM)

Risk-Free Rate (Rf)4.50%

Beta (β)1.03

Market Risk Premium4.50%

*Using current implied premium (4.5% per Damodaran 2026), not historical (6.5%)

Cost of Equity (Re)9.12%

Cost of Debt

Pre-tax Cost of Debt2.87%

Tax Rate30.00%

After-tax Cost of Debt2.01%

Equity Weight (E/V)85.75%

Debt Weight (D/V)14.25%

WACC Calculation

WACC = (E/V × Re) + (D/V × Rd × (1-Tc))

WACC = (85.75% × 9.12%) + (14.25% × 2.01%)

= 8.11%

10-Year Free Cash Flow Projections(showing years 1, 3, 5, 7, 10)

Year	Year 1	Year 3	Year 5	Year 7	Year 10
Revenue	$4.3B	$4.8B	$5.3B	$5.6B	$6.1B
EBIT	$703M	$784M	$902M	$1.0B	$1.2B
Tax	$211M	$235M	$270M	$305M	$350M
NOPAT	$492M	$549M	$631M	$712M	$818M
+ Depreciation	$415M	$462M	$508M	$539M	$589M
- Capex	$345M	$336M	$317M	$280M	$215M
- Δ NWC	$50M	$58M	$34M	$36M	$39M
Free Cash Flow	$512M	$617M	$788M	$934M	$1.2B
Discount Factor	0.925	0.791	0.677	0.579	0.459
Present Value	$474M	$488M	$534M	$541M	$529M

FCF Formula: Free Cash Flow = NOPAT + Depreciation - Capex - Change in Net Working Capital

Terminal Value Calculation

Perpetuity Growth Method

Year 10 FCF$1.2B

Terminal Growth Rate3.00%

WACC8.11%

TV = FCF₁₀ × (1+g) / (WACC-g)

Terminal Value$23.2B

PV of Terminal Value$10.7B

Exit Multiple Method

Year 10 EBITDA$1.8B

Exit Multiple (EV/EBITDA)24.0x

TV = EBITDA₁₀ × Exit Multiple

Terminal Value$42.2B

PV of Terminal Value$19.3B

Valuation Summary

Perpetuity Growth Method

PV of Projected FCFs$5.2B

PV of Terminal Value$10.7B

Enterprise Value$15.8B

(-) Net Debt$2.7B

Equity Value$13.1B

Shares Outstanding200M

Price per Share$65.70

Exit Multiple Method

PV of Projected FCFs$5.2B

PV of Terminal Value$19.3B

Enterprise Value$24.5B

(-) Net Debt$2.7B

Equity Value$21.8B

Shares Outstanding200M

Price per Share$109.10

Pure Model Fair Value

$87.40

Average of perpetuity growth and exit multiple methods (before market calibration)

Sensitivity AnalysisPrice per Share

WACC ↓ / Growth →	2.00%	2.50%	3.00%	3.50%	4.00%
6.11%	$113.12	$118.82	$126.35	$136.77	$152.13
7.11%	$95.81	$99.11	$103.21	$108.45	$115.37
8.11%	$82.83	$84.91	$87.40	$90.44	$94.21
9.11%	$72.51	$73.91	$75.54	$77.46	$79.75
10.11%	$64.01	$64.99	$66.11	$67.40	$68.90

How to read: This table shows how the valuation changes with different WACC (discount rate) and terminal growth rate assumptions. Green = undervalued, Red = overvalued.

Scenario Analysis

Bear Case

$67.04

-20.0% vs current

• -25% vs analyst consensus
• Terminal growth: 2.5%
• Beta: 1.28

Base Case

$87.40

4.3% vs current

• Analyst consensus
• Terminal growth: 3.0%
• Beta: 1.03

Bull Case

$110.36

31.7% vs current

• +25% vs analyst consensus
• Terminal growth: 3.5%
• Beta: 0.87

Key Assumptions & Drivers• Healthcare Sector

Growth Assumptions (Select Years)

Year 1 Revenue Growth5.56%

Year 3 Revenue Growth5.85%

Year 5 Revenue Growth3.00%

Year 7 Revenue Growth3.00%

Year 10 Revenue Growth3.00%

Terminal Growth Rate3.00%

Margin & Efficiency

Current EBIT Margin16.28%

Terminal EBIT Margin20.00%

Tax Rate30.00%

Historical Capex / Rev7.98%

Terminal Capex / Rev3.50%

NWC / Revenue21.93%

Key Drivers: Revenue growth, operating margin expansion, capex efficiency, and working capital management are the primary drivers of cash flow generation. Terminal value assumptions significantly impact final valuation.

Institutional-Grade Methodology

Actual Company Data: Revenue, EBIT, Capex, NWC, Tax Rate, Interest Expense, Beta

Market Assumptions: Risk-free: 4.5% (10Y), MRP: 4.5% (Damodaran 2026), Exit: 24x EV/EBITDA (Healthcare sector)

This DCF model is for informational purposes only. Projections are based on assumptions that may not materialize. Past performance does not guarantee future results. Consult a financial advisor before making investment decisions.

Explore More

S&P 500 Screener

Filter and sort all 500 stocks

Market Movers

Today's biggest gainers and losers

Market Heatmap

Visual sector performance