Cochlear (COH) AI Stock Analysis

• Market Cap: $12.60B
• Dividend Yield: 1.64%
• Average Volume (3M): 130.23K
• Price to Earnings (P/E): 26.4
• Beta (1Y): 0.37
• Revenue Growth: 4.32%
• EPS Growth: 9.24%
• Country: AU
• Employees: 4,996
• Sector: Healthcare
• Sector Strength: 45
• Industry: Medical - Devices
• EPS (TTM): 2.98
• Shares Outstanding: 65,398,680
• 10 Day Avg. Volume: 116,122
• 30 Day Avg. Volume: 130,233
• PEG Ratio: 5.50
• Price to Book (P/B): 10.08
• Price to Sales (P/S): 8.39
• P/FCF Ratio: 145.62
• Enterprise Value/Market Cap: 0.98
• Enterprise Value/Revenue: 5.22
• Enterprise Value/Gross Profit: 7.15
• Enterprise Value/Ebitda: 21.76
• 1Y Price Target: $254.35
• Price Target Upside: 36.87% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 10
• EPS Forecast (FY): 6.28
• Revenue Forecast (FY): $2.45B

• Rating: 65 Neutral
• Price Target: AU$214.00 ▲(15.16% Upside)
• Action: Reiterated Date: 02/14/26
• Date: Action: Reiterated 02/14/26

The score is driven primarily by strong underlying financial quality (high margins, solid growth, low leverage), tempered by weak technicals (price below major moving averages and negative MACD) and a high valuation (P/E 42.87). Earnings call commentary adds moderate support via FY '26 profit growth guidance, but is balanced by near-term headwinds (services decline, margin pressure, and China pricing).

Positive Factors

High profitability and margins

Cochlear's very high gross and healthy net and operating margins reflect efficient manufacturing, pricing power and product mix. Durable margins support reinvestment in R&D, fund ongoing product launches and buffer near-term headwinds, sustaining competitive positioning over months.

Conservative balance sheet and strong ROE

Low leverage and high ROE give Cochlear financial flexibility to fund R&D, capex and strategic initiatives without depending on external financing. A conservative capital structure enhances resilience to market shocks and supports multi-quarter investment in product development.

Nexa launch and product innovation

Nexa represents a structural differentiation: long development cycle, upgraded replacement pathway and potential diagnostics/neural-health features increase clinical stickiness and future upgrade revenue. Product leadership strengthens long-term installed-base monetization.

Negative Factors

Weak free cash flow generation

A sharp drop in free cash flow growth limits Cochlear's ability to self-fund R&D, factory expansion and shareholder returns without reducing flexibility. Persistently weaker cash conversion can constrain strategic options and increase sensitivity to margin or revenue shocks.

Decline in services revenue

Services and aftermarket revenues are steadier, higher-margin sources tied to the installed base. A sustained services decline reduces recurring cash flow, hurts lifecycle monetization and weakens predictability of revenue streams that support long-term margins.

China pricing and volume mix headwind

Structural volume-based pricing in a large market can permanently compress ASPs and margins. If sales shift to lower-priced tiers long-term, revenue growth may require materially higher unit volumes, making margin recovery and forecastability more difficult over coming quarters.

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 is headquartered in Sydney, Australia.

How the Company Makes Money

Cochlear generates revenue primarily through the sale of its hearing implant devices and accessories. The company has a well-defined revenue model that includes the direct sale of cochlear implants to hospitals and clinics, as well as ongoing revenues from replacement parts and upgrades of sound processors. Key revenue streams include initial device sales, which are often accompanied by surgical and rehabilitation services, as well as recurring revenues from consumables and accessories needed for the devices. Cochlear also benefits from partnerships with healthcare providers and audiology professionals, which enhance its market reach and facilitate the adoption of its products. Furthermore, Cochlear invests in research and development to innovate and expand its product offerings, thereby driving future growth and revenue.

Cochlear Financial Statement Overview

Summary

Strong profitability and revenue growth (gross margin 73.7%, net margin 16.6%, revenue +14.4%) and a conservative balance sheet (debt-to-equity 0.12, ROE 19.9%) are partially offset by weak cash generation, highlighted by a 49.5% decline in free cash flow growth.

Income Statement

Cochlear has demonstrated strong revenue growth with a 14.4% increase in the latest year. The company maintains healthy profitability with a gross profit margin of 73.7% and a net profit margin of 16.6%. EBIT and EBITDA margins are also robust at 22.6% and 26.5%, respectively. These metrics indicate efficient operations and strong market positioning in the medical devices industry.

Balance Sheet

The balance sheet reflects a solid financial structure with a low debt-to-equity ratio of 0.12, indicating conservative leverage. Return on equity is strong at 19.9%, showcasing effective use of shareholder funds. The equity ratio is healthy, suggesting a stable asset base. Overall, the company is well-capitalized with manageable debt levels.

Cash Flow

Cochlear's cash flow performance is mixed, with a significant decline in free cash flow growth by 49.5%. However, the operating cash flow to net income ratio is reasonable at 0.39, and the free cash flow to net income ratio is 0.57, indicating decent cash generation relative to earnings. The company needs to improve free cash flow generation to enhance financial flexibility.

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

• Technical Analysis Sentiment: Negative
• Last Price: 185.83
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AU:COH, the sentiment is Negative. The current price of 185.83 is below the 20-day moving average (MA) of 213.63, below the 50-day MA of 244.56, and below the 200-day MA of 277.30, indicating a bearish trend. The MACD of -17.47 indicates Positive momentum. The RSI at 19.46 is Positive, neither overbought nor oversold. The STOCH value of 16.15 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AU:COH.

Cochlear Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
COH	65 Neutral	$12.60B	26.40	20.11%	1.64%	4.32%	9.24%
PNV	62 Neutral	AU$607.94M	70,799.02	16.49%	―	23.31%	151.32%
ARX	56 Neutral	AU$210.74M	-47.06	-2.01%	―	16.93%	76.47%
4DX	53 Neutral	AU$2.32B	-3.16	-44.49%	―	55.91%	22.60%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%
CYC	44 Neutral	AU$97.09M	-6.27	-31.98%	―	34.20%	-23.90%
EMV	44 Neutral	AU$159.85M	-10.00	-70.55%	―	―	-257.32%

Cochlear Corporate Events

Cochlear Seeks ASX Quotation for Small Employee Share Issuance

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 capital-raising, signalling ongoing use of share-based incentives to attract and retain staff without materially impacting the company’s capital structure or shareholder dilution.

The most recent analyst rating on (AU:COH) stock is a Sell with a A$270.00 price target. To see the full list of analyst forecasts on Cochlear stock, see the AU:COH Stock Forecast page.

Cochlear Sets 13 February Date for HY26 Results Briefing

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, including a Q&A session for registered participants, and will later make all related result documents and an archived webcast available to shareholders through its investor relations website, underscoring its focus on transparent communication with the market and key stakeholders.

The most recent analyst rating on (AU:COH) stock is a Hold with a A$300.00 price target. To see the full list of analyst forecasts on Cochlear stock, see the AU:COH Stock Forecast page.

Cochlear Announces Lapse of 362 Conditional Service Rights

Cochlear Limited has notified the market of the cessation of 362 service rights (COHAB) after the conditional rights to securities lapsed because their vesting conditions were not met or became incapable of being satisfied as of 19 December 2025. The move represents a routine adjustment to the company’s issued capital structure under its employee or service-related equity arrangements, with limited direct impact on operations but reflecting ongoing governance and compliance around performance-based or conditional securities.

The most recent analyst rating on (AU:COH) stock is a Hold with a A$300.00 price target. To see the full list of analyst forecasts on Cochlear stock, see the AU:COH Stock Forecast page.

Cochlear Issues New Shares Following Exercise of Unquoted Options

Cochlear Limited has notified the market of the issue of 617 ordinary fully paid shares following the exercise or conversion of previously unquoted options or convertible securities. The new shares, issued on 19 December 2025, represent a minor increase in the company’s equity base and reflect the ongoing utilisation of its long-term incentive or employee equity plans, with negligible immediate impact on capital structure but signalling continued alignment of management and employee interests with shareholder value.

The most recent analyst rating on (AU:COH) stock is a Hold with a A$300.00 price target. To see the full list of analyst forecasts on Cochlear stock, see the AU:COH Stock Forecast page.