Cochlear Limited (AU:COH)
ASX:COH
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Cochlear
(Sydney:COH)
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Rating:65Neutral
Price Target:
AU$178.00
▲(3.27% Upside)
Action:ReiteratedDate:03/26/26
The score is supported primarily by strong underlying financial performance (high margins, strong ROE, low leverage) but is pulled down materially by very weak technicals (price below all major DMAs and bearish momentum). Valuation is moderately unattractive at a 26.4x P/E despite a 2.6% yield, and the latest earnings call was mixed with lower-end guidance and FX/cash-flow pressures offsetting Nexa-driven adoption momentum.
Positive Factors
High margins and revenue growth
Consistently high gross (73.7%) and operating margins, alongside double‑digit revenue growth, indicate durable product-level pricing power and manufacturing efficiency. This supports sustained R&D reinvestment, stable profitability through product cycles and long-term capacity to fund strategic initiatives.
Negative Factors
Significant free cash flow decline
A near‑50% drop in free cash flow materially reduces financial flexibility to fund capex, cloud transition and working capital needs. Persistently weak FCF would constrain discretionary investment, shareholder returns and the company’s ability to absorb operational or FX shocks over coming quarters.
Read all positive and negative factors
Positive Factors
Negative Factors
High margins and revenue growth
Consistently high gross (73.7%) and operating margins, alongside double‑digit revenue growth, indicate durable product-level pricing power and manufacturing efficiency. This supports sustained R&D reinvestment, stable profitability through product cycles and long-term capacity to fund strategic initiatives.
Read all positive factors
Cochlear (COH) vs. iShares MSCI Australia ETF (EWA)
Market Cap
AU$11.27B
Dividend Yield1.64%
Average Volume (3M)130.23K
Price to Earnings (P/E)26.4
Beta (1Y)0.55
Revenue Growth4.32%
EPS Growth9.24%
CountryAU
Employees4,996
SectorHealthcare
Sector Strength45
IndustryMedical - Devices
Share Statistics
EPS (TTM)2.98
Shares Outstanding65,398,680
10 Day Avg. Volume116,122
30 Day Avg. Volume130,233
Financial Highlights & Ratios
PEG Ratio5.50
Price to Book (P/B)10.08
Price to Sales (P/S)8.39
P/FCF Ratio145.62
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
AU$247.69Price Target Upside43.71% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering11
EPS Forecast (FY)6.25
Revenue Forecast (FY)AU$2.44B
Cochlear Business Overview & Revenue Model
Company Description
Cochlear Limited provides implantable hearing solutions for children and adults worldwide. It offers cochlear implant systems, sound processor upgrades, bone conduction systems, accessories, and other products. The company was founded in 1981 and ...
How the Company Makes Money
Cochlear makes money primarily by selling hearing implant systems and the recurring accessories and upgrade components used with them. Its largest revenue stream is cochlear implants, which typically include an internal implant and an external sou...
Cochlear Earnings Call Summary
Earnings Call Date:Feb 12, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Aug 13, 2026
Earnings Call Sentiment Neutral
The call conveyed a mixed picture: strategically positive with a largely successful Nexa launch, clear adoption in developed markets, services momentum and significant long‑term investments (cloud, R&D, capacity). However, near‑term financials were weaker than expected — H1 revenue down 2% cc, margin compression to 73%, A$103M cash decline and an A$30M potential FX hit for H2 — and the company experienced short‑term market share pressure during contracting and some softness in Acoustics. Management expects a stronger second half but guided to the lower end of prior FY guidance and emphasized that FX and timing delays constrained H1 results.Positive Updates
Successful Nexa Launch and Adoption
By December, over 80% of developed market sales were Nexa; November–December saw a ~10% year‑over‑year lift in cochlear implant units in key developed markets once Nexa was installed.
Negative Updates
Sales Revenue Decline
Sales revenue declined ~2% in constant currency in the half, driven by timing of Nexa rollouts, delayed price implementation, and China volume‑based pricing effects.
Read all updates
Q2-2026 Updates
Positive
Negative
Successful Nexa Launch and Adoption
By December, over 80% of developed market sales were Nexa; November–December saw a ~10% year‑over‑year lift in cochlear implant units in key developed markets once Nexa was installed.
Read all positive updates
Company Guidance
The company reiterated that FY26 is weighted to the second half and now expects to finish at the lower end of its original guidance range (AUD 435–460m) before FX, while aiming to help ~60,000 people this year; H1 sales were down 2% in constant currency with underlying net profit of $195m (underlying margin 17%), gross margin 73% (‑2ppt), CI sales down 2% CC, Acoustics down 3% CC and Services up 4% in developed markets; by December >80% of developed‑market sales were Nexa and Nov–Dec saw a ~10% uplift in CI units in key developed markets after Nexa installs, with a low single‑digit price uplift achieved where possible; balance‑sheet and cash impacts included working capital +$48m, net cash down $103m, capex $40m, Chengdu a ~0.5ppt gross‑margin headwind, cloud spend ~$34m (with $24m cloud‑related expense below the line) and a $9.6m fair‑value loss on Saluda; FX is a material short‑term headwind (current spot AUD would be ~A$30m net‑profit hit to the half, with ~A$3m per cent vs USD and ~A$4m per cent vs EUR exposure, noting only partial hedging of cash flows).Cochlear Financial Statement Overview
Summary
Income Statement
85
Very Positive
Balance Sheet
78
Positive
Cash Flow
70
Positive
| Breakdown | TTM | Jun 2025 | Jun 2024 | Jun 2023 | Jun 2022 | Jun 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 2.36B | 2.34B | 2.24B | 1.94B | 1.64B | 1.49B |
| Gross Profit | 1.73B | 1.73B | 1.67B | 1.47B | 1.23B | 1.08B |
| EBITDA | 567.00M | 619.90M | 579.50M | 487.10M | 475.40M | 451.90M |
| Net Income | 345.30M | 388.90M | 356.80M | 300.60M | 289.10M | 326.50M |
Balance Sheet | ||||||
| Total Assets | 2.79B | 2.83B | 2.75B | 2.57B | 2.47B | 2.43B |
| Cash, Cash Equivalents and Short-Term Investments | 187.10M | 275.70M | 513.60M | 555.50M | 629.30M | 609.60M |
| Total Debt | 427.80M | 235.70M | 243.70M | 201.80M | 253.90M | 264.30M |
| Total Liabilities | 855.60M | 874.70M | 904.60M | 819.90M | 779.40M | 736.50M |
| Stockholders Equity | 1.94B | 1.95B | 1.84B | 1.75B | 1.69B | 1.69B |
Cash Flow | ||||||
| Free Cash Flow | 201.20M | 135.00M | 299.00M | 266.50M | 299.30M | 198.70M |
| Operating Cash Flow | 264.50M | 237.60M | 388.80M | 362.40M | 376.50M | 265.40M |
| Investing Cash Flow | -118.10M | -115.20M | -105.70M | -125.70M | -138.90M | 279.90M |
| Financing Cash Flow | -337.50M | -366.90M | -323.80M | -310.40M | -220.70M | -495.10M |
Cochlear Technical Analysis
Neutral
172.36
Price Trends
204.27
Negative
234.95
Negative
263.72
Negative
Market Momentum
-8.63
Negative
40.27
Neutral
79.38
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AU:COH, the sentiment is Neutral. The current price of 172.36 is above the 20-day moving average (MA) of 171.06, below the 50-day MA of 204.27, and below the 200-day MA of 263.72, indicating a neutral trend. The MACD of -8.63 indicates Negative momentum. The RSI at 40.27 is Neutral, neither overbought nor oversold. The STOCH value of 79.38 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for AU:COH.
Cochlear Peers Comparison
UnderperformOutperform
Sector (51)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
65 Neutral | AU$11.27B | 26.40 | 17.76% | 1.64% | 4.32% | 9.24% | |
55 Neutral | AU$129.26M | 52.88 | -5.31% | ― | 21.65% | 81.40% | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% | |
48 Neutral | AU$24.72M | -1.40 | -98.14% | ― | 14.84% | 39.64% | |
45 Neutral | AU$35.61M | -2.79 | -44.16% | ― | 25.47% | 14.08% | |
44 Neutral | AU$265.65M | -4.94 | -152.49% | ― | ― | ― | |
42 Neutral | AU$54.93M | 62.66 | 0.48% | ― | 2.23% | -263.16% |
* Healthcare Sector Average
AU:COH
Cochlear
172.36
-75.99
-30.60%
AU:EYE
Nova Eye Medical
0.13
0.04
45.35%
AU:CMP
Compumedics Limited
0.28
-0.01
-5.17%
AU:SOM
Somnomed Limited
0.59
0.16
37.21%
AU:CBL
Control Bionics Ltd.
0.06
<0.01
17.65%
AU:EBR
EBR Systems, Inc. Shs Chess Depository Interests Repr 1 Sh
0.59
-0.80
-57.55%
Cochlear Corporate Events
Pinnacle Investment Exits Substantial Holder Position in Cochlear
Mar 12, 2026
Pinnacle Investment Management Group Limited and its listed subsidiaries have notified Cochlear Ltd that they have ceased to be substantial holders in the company as of 9 March 2026. The change, lodged under Australian Corporations Act disclosure ...
Cochlear Director Bruce Robinson Increases Indirect Shareholding
Feb 27, 2026
Cochlear Limited has disclosed a change in director Bruce Gregory Robinson’s indirect interest in the company’s shares. Robinson, through his self-managed superannuation structure Brak Super Pty Ltd as trustee for the Brak Superfund, h...
Cochlear Director Karen Penrose Increases Indirect Shareholding via On-Market Purchase
Feb 19, 2026
Cochlear Limited has disclosed a change in director Karen Lee Collett Penrose’s indirect shareholding in the company following an on-market trade. Penrose, whose interest is held via GKP Acquisitions Pty Ltd as trustee for the Karen Lee Supe...
Cochlear Seeks ASX Quotation for Small Employee Share Issuance
Jan 28, 2026
Cochlear Limited has applied for quotation on the ASX of 86 additional ordinary fully paid shares, to be issued on 29 January 2026 under an employee incentive scheme. The small issuance reflects routine equity-based remuneration rather than a capi...
Cochlear Sets 13 February Date for HY26 Results Briefing
Jan 19, 2026
Cochlear Limited has scheduled the release of its HY26 financial results for 13 February 2026, when management will brief analysts and media via a webcast and conference call. The company will provide live access to its results presentation, inclu...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.