Cochlear (CHEOF) AI Stock Analysis

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Cochlear (CHEOF) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$11.43B

Dividend Yield1.61%

Average Volume (3M)96.00

Price to Earnings (P/E)46.6

Beta (1Y)0.34

Revenue GrowthN/A

EPS GrowthN/A

CountryUS

Employees4,996

SectorHealthcare

Sector Strength41

IndustryMedical - Devices

Share Statistics

EPS (TTM)2.02

Shares Outstanding65,397,000

10 Day Avg. Volume1

30 Day Avg. Volume96

Financial Highlights & Ratios

PEG Ratio12.96

Price to Book (P/B)9.44

Price to Sales (P/S)0.00

P/FCF Ratio65.50

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$182.23

Price Target Upside4.43% Upside

Rating ConsensusHold

Number of Analyst Covering3

Cochlear Business Overview & Revenue Model

Company DescriptionCochlear 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 Earnings Call Summary

Earnings Call Date:Feb 13, 2025

(Q2-2025)

% Change Since: -9.01%|

Next Earnings Date:Aug 14, 2025

Earnings Call Sentiment Neutral

The earnings call presented a mixed outlook. There were strong performances in Cochlear implants and acoustics, and the company maintained a robust cash position with dividend increases. However, challenges such as declining services revenue, underperformance in emerging markets, and increased cloud investment weigh on the overall sentiment.

Q2-2025 Updates

Positive Updates

Strong Cochlear Implant Revenue Growth

Cochlear implant sales revenue grew by 13% with unit growth of 6%. Developed markets saw 6% growth, and there was a notable 10% growth in adults and seniors.

Acoustics Revenue Surge

Acoustics revenue increased by 22%, driven by a 50% increase in Osia system surgeries and continued strong performance of the Baha system.

Robust Cash Position

The company's balance sheet remains strong with $383 million in cash, even after building up inventory ahead of new product launches.

Dividend Increase

The dividend was increased by 8% to $2.15, showing a commitment to shareholder returns.

Negative Updates

Decline in Services Revenue

Services revenue declined by 12%, attributed to cost of living pressures causing higher cancellation rates, especially in the U.S.

Emerging Markets Below Expectations

Emerging markets growth was below expectations, with only 3% growth in the first half, due to lower tender volumes in countries like India.

Increased Cloud Investment

The company increased its cloud investment by $100 million to $250 million, which will impact profit margins due to expanded scope.

Operating Expenses Rise

Operating expenses increased by 10%, outpacing sales growth, driven by continued investment in R&D and growth initiatives.

Company Guidance

In the call discussing Cochlear Limited's Half Year 2025 results, the company reported a mixed performance with Cochlear implant revenue growth at 13%, Acoustics revenue growth at 22%, and a 12% decline in Services revenue, leading to a net sales increase of 6% in constant currency. The underlying net profit rose by 7% to $206 million, while operating expenses increased by 10%. The gross margin remained in line with targets at 75%, despite anticipated headwinds from the Chengdu site's ramp-up. Cochlear's balance sheet reflected a strong cash position of $383 million, although inventory levels increased by $69.5 million due to upcoming product launches. The company maintained its full-year guidance range but anticipated results at the lower end, influenced by decreased Services revenue and heightened cloud investment, which was increased by $100 million to $250 million to support a final phase of cloud transition. Looking forward, Cochlear expects Cochlear implant unit growth of around 10% for the year, with plans to launch a next-generation Cochlear implant mid-year, pending regulatory approvals.

Cochlear Financial Statement Overview

Summary

Cochlear Limited exhibits strong financial health with consistent revenue and profit growth. The balance sheet is robust with low leverage and effective equity utilization. Cash flow is solid, supported by positive free cash flow growth and healthy cash conversion ratios, indicating a well-managed financial position.

Income Statement

Very Positive

Cochlear Limited demonstrates strong revenue growth with a 15.49% increase from 2023 to 2024. The gross profit margin is robust at 75.14% in 2024, indicating effective cost management. Net profit margin improved to 15.80%, showcasing enhanced profitability. EBIT and EBITDA margins are healthy at 23.09% and 25.67%, respectively, highlighting operational efficiency.

Balance Sheet

Positive

The company's balance sheet is solid with a low debt-to-equity ratio of 0.13, suggesting conservative leverage. ROE is strong at 19.39%, reflecting efficient use of equity. The equity ratio of 67.06% in 2024 indicates a strong equity base, contributing to financial stability.

Cash Flow

Positive

Cochlear's free cash flow grew by 12.20% from 2023 to 2024, a positive indicator of cash generation. The operating cash flow to net income ratio is 1.09, suggesting healthy cash conversion. The free cash flow to net income ratio stands at 0.84, showing effective cash utilization.

TTM	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Breakdown
Income Statement		Total Revenue
2.32B	2.24B	1.96B	1.64B	1.49B	1.35B
	Gross Profit
1.74B	1.67B	1.47B	1.23B	1.08B	1.01B
	EBIT
527.80M	521.50M	412.40M	361.70M	327.90M	259.00M
	EBITDA
587.30M	579.50M	487.10M	475.40M	451.90M	-181.90M
	Net Income Common Stockholders
370.50M	356.80M	300.60M	289.10M	326.50M	-238.30M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
546.70M	513.60M	555.50M	629.30M	609.60M	930.00M
	Total Assets
2.47B	2.75B	2.57B	2.47B	2.43B	2.58B
	Total Debt
250.40M	243.70M	201.80M	253.90M	264.30M	704.50M
	Net Debt
-271.30M	-269.90M	-353.70M	-375.40M	-345.30M	139.50M
	Total Liabilities
751.40M	904.60M	819.90M	779.40M	736.50M	1.18B
	Stockholders Equity
1.72B	1.84B	1.75B	1.69B	1.69B	1.40B
Cash Flow		Free Cash Flow
267.40M	299.00M	266.50M	299.30M	198.70M	-288.30M
	Operating Cash Flow
341.60M	388.80M	362.40M	376.50M	265.40M	-157.80M
	Investing Cash Flow
-109.10M	-105.70M	-125.70M	-138.90M	279.90M	-509.70M
	Financing Cash Flow
-343.90M	-323.80M	-310.40M	-220.70M	-495.10M	1.15B

Cochlear Peers Comparison

Overall Rating

UnderperformOutperform

Sector (54)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CHEOF		$11.43B	46.62	20.61%	1.61%	―	―
Sector *	54 Neutral	$5.31B	3.26	-45.10%	2.79%	16.76%	0.02%
CALZF		$589.36M	144.64	8.30%	―	―	―
ARX	54 Neutral	AU$179.35M	―	-4.06%	―	15.90%	8.52%
EMV	48 Neutral	AU$151.79M	―	-58.61%	―	―	-74.88%
CYC	44 Neutral	AU$116.69M	―	-35.20%	―	4.68%	-155.42%
4DX	42 Neutral	AU$139.65M	―	-52.37%	―	471.29%	-4.58%

* Healthcare Sector Average

Performance Comparison

CHEOF

Cochlear

174.16

-37.66

-17.78%

CALZF

Polynovo Limited

0.81

-0.69

-46.00%

AU:CYC

Cyclopharm Limited

1.07

-0.51

-32.28%

AU:ARX

Aroa Biosurgery Ltd

0.52

-0.09

-14.75%

AU:EMV

EMvision Medical Devices Ltd.

1.78

-0.16

-8.25%

AU:4DX

4DMedical Ltd

0.30

-0.36

-54.55%

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

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.