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Cochlear Limited (CHEOF)
OTHER OTC:CHEOF

Cochlear (CHEOF) AI Stock Analysis

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

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
85
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
78
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
80
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.
Breakdown
TTMJun 2024Jun 2023Jun 2022Jun 2021Jun 2020
Income StatementTotal Revenue
2.32B2.24B1.96B1.64B1.49B1.35B
Gross Profit
1.74B1.67B1.47B1.23B1.08B1.01B
EBIT
527.80M521.50M412.40M361.70M327.90M259.00M
EBITDA
587.30M579.50M487.10M475.40M451.90M-181.90M
Net Income Common Stockholders
370.50M356.80M300.60M289.10M326.50M-238.30M
Balance SheetCash, Cash Equivalents and Short-Term Investments
546.70M513.60M555.50M629.30M609.60M930.00M
Total Assets
2.47B2.75B2.57B2.47B2.43B2.58B
Total Debt
250.40M243.70M201.80M253.90M264.30M704.50M
Net Debt
-271.30M-269.90M-353.70M-375.40M-345.30M139.50M
Total Liabilities
751.40M904.60M819.90M779.40M736.50M1.18B
Stockholders Equity
1.72B1.84B1.75B1.69B1.69B1.40B
Cash FlowFree Cash Flow
267.40M299.00M266.50M299.30M198.70M-288.30M
Operating Cash Flow
341.60M388.80M362.40M376.50M265.40M-157.80M
Investing Cash Flow
-109.10M-105.70M-125.70M-138.90M279.90M-509.70M
Financing Cash Flow
-343.90M-323.80M-310.40M-220.70M-495.10M1.15B

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
$11.43B46.6220.61%1.61%
54
Neutral
$5.31B3.26-45.10%2.79%16.76%0.02%
$589.36M144.648.30%
AUARX
54
Neutral
AU$179.35M-4.06%15.90%8.52%
AUEMV
48
Neutral
AU$151.79M-58.61%-74.88%
AUCYC
44
Neutral
AU$116.69M-35.20%4.68%-155.42%
AU4DX
42
Neutral
AU$139.65M-52.37%471.29%-4.58%
* Healthcare Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
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.