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Cochlear
(Sydney:COH)
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Rating:66Neutral
Price Target:
AU$127.00
▼(-24.61% Downside)
Action:Reiterated
Date:04/23/26
The score is supported by strong underlying fundamentals (profitability, revenue growth, and low leverage) but held back by very weak technical momentum and a mixed near-term outlook from the earnings call (lower-end guidance, margin/cash pressure, and FX risk). Valuation is moderate-to-premium, partly balanced by a high dividend yield.
Positive Factors
High margins & revenue growth
Cochlear's sustained high gross (73.7%) and net margins (16.6%) with recent revenue growth indicate durable pricing power and operating efficiency in implantable hearing systems. These margins support ongoing R&D, capacity investments and product lifecycle economics, preserving long-term profitability despite cyclical pressures.
Negative Factors
Weak free cash flow & cash decline
A near 50% fall in free cash flow and a reported net cash decline reduce Cochlear's near-term financial flexibility. Weaker cash conversion limits ability to accelerate strategic investments, fund working capital for launches, or pursue buybacks/dividends until cash generation stabilizes.
Read all positive and negative factors
Positive Factors
Negative Factors
High margins & revenue growth
Cochlear's sustained high gross (73.7%) and net margins (16.6%) with recent revenue growth indicate durable pricing power and operating efficiency in implantable hearing systems. These margins support ongoing R&D, capacity investments and product lifecycle economics, preserving long-term profitability despite cyclical pressures.
Read all positive factors
Cochlear (COH) vs. iShares MSCI Australia ETF (EWA)
Market Cap
AU$7.72B
Dividend Yield1.64%
Average Volume (3M)130.23K
Price to Earnings (P/E)22.4
Beta (1Y)0.84
Revenue Growth2.04%
EPS Growth-6.63%
CountryAU
Employees4,996
SectorHealthcare
Sector Strength45
IndustryMedical - Devices
Share Statistics
EPS (TTM)5.28
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 Ratio112.21
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
AU$123.47Price Target Upside-26.71% Downside
Rating ConsensusHold
Number of Analyst Covering11
EPS Forecast (FY)4.73
Revenue Forecast (FY)AU$2.33B
Cochlear Business Overview & Revenue Model
Company Description
Globally, Cochlear Limited specializes in the development and provision of implantable auditory solutions for both children and adults. The company's diverse offerings include advanced cochlear implant systems, upgrades for sound processors, bone ...
How the Company Makes Money
Cochlear primarily makes money by selling implantable hearing systems and the ongoing accessories and services that support those systems. Its revenue model is anchored in (1) initial system sales and (2) recurring aftermarket sales over the life ...
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 | 175.20M | 326.40M | 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
168.46
Price Trends
105.17
Positive
147.23
Negative
210.34
Negative
Market Momentum
2.79
Negative
64.77
Neutral
83.09
Negative
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 168.46 is above the 20-day moving average (MA) of 106.60, above the 50-day MA of 105.17, and below the 200-day MA of 210.34, indicating a neutral trend. The MACD of 2.79 indicates Negative momentum. The RSI at 64.77 is Neutral, neither overbought nor oversold. The STOCH value of 83.09 is Negative, 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 |
|---|---|---|---|---|---|---|---|
66 Neutral | AU$7.72B | 22.35 | 17.76% | 1.64% | 2.04% | -6.63% | |
55 Neutral | AU$117.21M | -44.21 | -5.31% | ― | 18.21% | 65.00% | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% | |
49 Neutral | AU$33.78M | -3.98 | -98.14% | ― | 14.88% | 35.94% | |
46 Neutral | AU$29.91M | -4.10 | -40.41% | ― | 26.59% | 33.42% | |
42 Neutral | AU$47.94M | 600.00 | 0.48% | ― | 24.45% | ― | |
42 Neutral | AU$236.24M | -2.74 | -179.23% | ― | ― | 48.35% |
* Healthcare Sector Average
AU:COH
Cochlear
118.03
-176.49
-59.92%
AU:EYE
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0.11
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0.24
-0.02
-5.88%
AU:SOM
Somnomed Limited
0.54
-0.11
-17.69%
AU:CBL
Control Bionics Ltd.
0.08
0.05
182.76%
AU:EBR
EBR Systems, Inc. Shs Chess Depository Interests Repr 1 Sh
0.37
-0.75
-66.91%
Cochlear Corporate Events
Cochlear Seeks ASX Quotation for Small Employee Share Issue
Apr 29, 2026
Cochlear Limited has applied for quotation of 236 ordinary fully paid shares on the Australian Securities Exchange. The new securities, issued on 30 April 2026 under an employee incentive scheme, are to be quoted and are not subject to transfer re...
BNY Mellon Group Ceases to Be Substantial Holder in Cochlear
Apr 28, 2026
The Bank of New York Mellon Corporation and its related group entities have notified Cochlear Ltd that they have ceased to be substantial shareholders in the company as of 27 April 2026. The change reflects a reduction in BNY Mellon’s releva...
AustralianSuper exits substantial holder position in Cochlear
Apr 28, 2026
AustralianSuper Pty Ltd has disclosed that it has ceased to be a substantial shareholder in Cochlear Ltd, following a change in its relevant interest in the company’s voting securities. According to the notice, the change was effected throug...
Cochlear Cuts FY26 Profit Guidance as Market Softens but Doubles Down on Growth Investment
Apr 21, 2026
Cochlear has warned of softer-than-expected trading conditions in developed markets and rising uncertainty in the Middle East, prompting a cut to its FY26 underlying net profit guidance to $290 million-$330 million. The company cites hospital capa...
Cochlear Reports Lapse and Expiry of Equity Incentive Securities
Apr 6, 2026
Cochlear Limited has notified the market of the cessation of several classes of equity-linked securities, including options, performance rights, deferred performance rights and service rights. The affected instruments, which collectively cover sev...
Cochlear Issues 6,196 New Shares Following Conversion of Unquoted Securities
Apr 6, 2026
Cochlear Limited has issued 6,196 new fully paid ordinary shares on 31 March 2026 following the exercise or conversion of previously unquoted equity securities. The modest share issuance reflects ongoing participation in the company’s equity...
Cochlear Issues New Unquoted Service Rights Under Employee Incentive Plan
Apr 6, 2026
Cochlear Limited has notified the market of the issue of 8,156 unquoted service rights under its employee incentive scheme, effective 31 March 2026. The new rights, which will not be quoted on the ASX, form part of the company’s ongoing appr...
BNY Mellon Ceases to Be Substantial Shareholder in Cochlear
Apr 6, 2026
The Bank of New York Mellon Corporation and its related group entities have notified Cochlear Ltd that they have ceased to be substantial shareholders in the company as of 2 April 2026. This reduction in BNY Mellon’s holding may slightly alt...
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.