Measuring The Cooper Companies Inc’s (NYSE:COO) track record of past performance is a useful exercise for investors. It enables us to understand whether or not the company has met or exceed expectations, which is an insightful signal for future performance. Today I will assess COO’s recent performance announced on 31 October 2017 and weigh these figures against its long-term trend and industry movements. See our latest analysis for Cooper Companies

How COO fared against its long-term earnings performance and its industry

For the purpose of this commentary, I like to use the ‘latest twelve-month’ data, which either annualizes the most recent 6-month earnings update, or in some cases, the most recent annual report is already the latest available financial data. This method allows me to examine different stocks in a uniform manner using the latest information. For Cooper Companies, its most recent bottom-line (trailing twelve month) is $372.9M, which, in comparison to the prior year’s level, has risen by 36.14%. Given that these figures may be fairly nearsighted, I’ve created an annualized five-year figure for Cooper Companies’s earnings, which stands at $250.4M. This shows that, on average, Cooper Companies has been able to increasingly raise its profits over the last couple of years as well.

What’s the driver of this growth? Let’s take a look at whether it is merely due to industry tailwinds, or if Cooper Companies has experienced some company-specific growth. The hike in earnings seems to be supported by a robust top-line increase overtaking its growth rate of costs. Though this has caused a margin contraction, it has made Cooper Companies more profitable. Scanning growth from a sector-level, the US industry industry has been growing its average earnings by double-digit 18.40% over the previous twelve months, and a less exciting 9.02% over the past five. This suggests that whatever tailwind the industry is profiting from, Cooper Companies is capable of amplifying this to its advantage.

What does this mean?

Cooper Companies’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. Positive growth and profitability are what investors like to see in a company’s track record, but how do we properly assess sustainability? I recommend you continue to research Cooper Companies to get a better picture of the stock by looking at:

1. Future Outlook: What are well-informed industry analysts predicting for COO’s future growth? Take a look at our free research report of analyst consensus for COO’s outlook.

2. Financial Health: Is COO’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.

3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

NB: Figures in this article are calculated using data from the trailing twelve months from 31 October 2017. This may not be consistent with full year annual report figures.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned.