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Cochlear
(Sydney:COH)
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Rating:69Neutral
Price Target:
AU$155.00
▲(12.45% Upside)
Action:Downgraded
Date:08/19/26
The score is driven primarily by solid underlying financial resilience (strong balance sheet and positive/free cash flow recovery) but is capped by the recent profitability step-down and ongoing margin pressures highlighted in guidance. Technicals are supportive in the near term but show signs of being stretched, and valuation looks relatively full despite a supportive ~3% dividend yield.
Positive Factors
Conservative Balance Sheet
Very low leverage gives Cochlear financial flexibility to fund research, product launches and capital investment without relying heavily on debt. This supports resilience through reimbursement delays, regional weakness or temporary earnings pressure.
Negative Factors
Margin and Profitability Compression
The sharp earnings decline shows that strong gross profitability is not currently translating into stable bottom-line returns. Flat margin guidance and a 14% underlying net margin, versus an 18% target, indicate a potentially prolonged recovery.
Read all positive and negative factors
Positive Factors
Negative Factors
Conservative Balance Sheet
Very low leverage gives Cochlear financial flexibility to fund research, product launches and capital investment without relying heavily on debt. This supports resilience through reimbursement delays, regional weakness or temporary earnings pressure.
Read all positive factors
Cochlear (COH) vs. iShares MSCI Australia ETF (EWA)
Market Cap
AU$9.34B
Dividend Yield3.02%
Average Volume (3M)735.98K
Price to Earnings (P/E)63.4
Beta (1Y)1.03
Revenue Growth-0.90%
EPS Growth-62.14%
CountryAU
Employees5,400
SectorHealthcare
Sector Strength45
IndustryMedical - Devices
Share Statistics
EPS (TTM)2.25
Shares Outstanding65,398,920
10 Day Avg. Volume1,384,584
30 Day Avg. Volume735,977
Financial Highlights & Ratios
PEG Ratio-0.87
Price to Book (P/B)4.58
Price to Sales (P/S)3.41
P/FCF Ratio25.95
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
AU$140.64Price Target Upside2.03% Upside
Rating ConsensusHold
Number of Analyst Covering10
EPS Forecast (FY)5.22
Revenue Forecast (FY)AU$2.39B
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 hearing implant systems and supporting products and services over the life of a patient’s device. A major revenue stream is the sale of cochlear implant systems, which typically includes the internal impla...
Cochlear Earnings Call Summary
Earnings Call Date:Aug 17, 2026
(Q4-2026)
| % Change Since: |
Next Earnings Date:Feb 16, 2027
Earnings Call Sentiment Neutral
The call outlined clear strategic progress: a highly successful Nexa product launch, meaningful unit growth, strong services expansion in developed markets, disciplined cash and cost management, and continued heavy R&D investment into attractive pipeline programs (TICI, drug-eluting electrodes). However, material near-term challenges remain — a 3ppt gross margin decline to 71%, an underlying net profit margin below target (14% vs 18% medium-term goal), Western Europe weakness, China pricing headwinds, non-cash write-downs and FY'27 FX headwinds. Management has responded with cost optimization, targeted growth re-investment (DTC and professional referral pilots) and a conservative FY'27 outlook (low single-digit revenue growth; underlying NP $330m–$350m). Overall the call balanced tangible product and pipeline upside with notable geopolitical, reimbursement and margin pressures.Positive Updates
Solid Revenue and Second-Half Acceleration
FY'26 sales revenue grew 2% in constant currency to $2.3 billion, with second-half revenue up 6% versus the first half.
Negative Updates
Underlying Profit and Margin Shortfall
Underlying net profit was $322 million with a net profit margin of 14%, below the company's medium-term 18% target and below the original guidance set in August.
Read all updates
Q4-2026 Updates
Positive
Negative
Solid Revenue and Second-Half Acceleration
FY'26 sales revenue grew 2% in constant currency to $2.3 billion, with second-half revenue up 6% versus the first half.
Read all positive updates
Company Guidance
Guidance highlights: FY26 sales were $2.3bn (up 2% constant currency) with underlying net profit $322m (14% margin); Cochlear enabled >55,000 people to hear and >50,000 of its >800,000 recipients received a new speech processor. For FY27 management expects low single‑digit constant‑currency revenue growth and underlying net profit of $330–350m, with gross margin guided flat at 70–71% (assumes USD $0.70 / EUR $0.61; net‑profit sensitivity ~2% per $0.01 FX and FX net impact on FY27 profit ~‑10% after hedges; current hedging could deliver ~$25–30m). Key financial items: R&D rose 15% to $323m (14% of sales) and will be maintained at ≥12% of revenue; comparable OpEx down 1% (reported OpEx +5% including $32m restructuring and $37m STI provisioning); CapEx around $100m (FY26 ~$91m); cloud program ~$60m after tax in FY27 (total program just over $200m post‑tax); fixed costs cut by 2ppt of revenue (≈$40m run‑rate), $25m reallocated to growth, inventory reduced $75m (13% H2), working capital $789m and operating cash flow +$130m with free cash flow more than doubled. Operational guidance/assumptions include CI systems volumes +5% in FY26 (CI revenue flat; developed‑market CI revenue +1%), Nexa accounting for >95% of developed‑market implants by June with ~3% average price uplift, services +6% (developed +13%) and acoustics +1%, with services expected slightly lower in FY27 and Osia‑3 driving future acoustics growth; medium‑term target remains an 18% net‑profit margin.Cochlear Financial Statement Overview
Summary
Income Statement
62
Positive
Balance Sheet
82
Very Positive
Cash Flow
74
Positive
| Breakdown | Jun 2026 | Jun 2025 | Jun 2024 | Jun 2023 | Jun 2022 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 2.33B | 2.34B | 2.24B | 1.94B | 1.64B |
| Gross Profit | 1.65B | 1.73B | 1.67B | 1.47B | 1.23B |
| EBITDA | 407.00M | 619.90M | 579.50M | 487.10M | 475.40M |
| Net Income | 147.30M | 388.90M | 356.80M | 300.60M | 289.10M |
Balance Sheet | |||||
| Total Assets | 2.60B | 2.83B | 2.75B | 2.57B | 2.47B |
| Cash, Cash Equivalents and Short-Term Investments | 187.70M | 275.70M | 513.60M | 555.50M | 629.30M |
| Total Debt | 212.70M | 235.70M | 243.70M | 201.80M | 253.90M |
| Total Liabilities | 862.40M | 874.70M | 904.60M | 819.90M | 779.40M |
| Stockholders Equity | 1.74B | 1.95B | 1.84B | 1.75B | 1.69B |
Cash Flow | |||||
| Free Cash Flow | 306.90M | 175.20M | 326.40M | 266.50M | 299.30M |
| Operating Cash Flow | 368.00M | 237.60M | 388.80M | 362.40M | 376.50M |
| Investing Cash Flow | -104.50M | -115.20M | -105.70M | -125.70M | -138.90M |
| Financing Cash Flow | -344.10M | -366.90M | -323.80M | -310.40M | -220.70M |
Cochlear Technical Analysis
Positive
137.84
Price Trends
127.24
Positive
115.73
Positive
170.71
Negative
Market Momentum
3.97
Positive
63.39
Neutral
80.35
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AU:COH, the sentiment is Positive. The current price of 137.84 is above the 20-day moving average (MA) of 136.27, above the 50-day MA of 127.24, and below the 200-day MA of 170.71, indicating a neutral trend. The MACD of 3.97 indicates Positive momentum. The RSI at 63.39 is Neutral, neither overbought nor oversold. The STOCH value of 80.35 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 |
|---|---|---|---|---|---|---|---|
69 Neutral | AU$9.34B | 63.44 | 8.01% | 3.02% | -0.90% | -62.14% | |
61 Neutral | AU$49.94M | 227.27 | 0.93% | ― | 18.54% | ― | |
54 Neutral | AU$75.82M | -28.51 | -5.44% | ― | 2.73% | 25.00% | |
52 Neutral | AU$38.46M | -8.88 | -28.79% | 185.34% | 19.13% | 58.47% | |
51 Neutral | $7.86B | -0.30 | -43.30% | 2.27% | 22.53% | -2.21% | |
44 Neutral | AU$32.04M | -2.98 | -103.48% | ― | -22.43% | 15.02% | |
44 Neutral | AU$210.93M | -2.07 | -169.40% | ― | 3420.67% | 27.04% |
* Healthcare Sector Average
AU:COH
Cochlear
139.65
-153.36
-52.34%
AU:EYE
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0.24
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-54.00%
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0.06
0.03
77.14%
AU:EBR
EBR Systems, Inc. Shs Chess Depository Interests Repr 1 Sh
0.30
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Cochlear Corporate Events
Cochlear Files 2026 Corporate Governance Statement With ASX
Aug 17, 2026
Cochlear Limited has lodged its annual corporate governance statement for the year ended 30 June 2026, confirming compliance with ASX Listing Rules and Corporate Governance Council recommendations. The statement, approved by the board on 18 August...
Cochlear Details Global Tax Strategy in 2026 Contribution Report
Aug 17, 2026
Cochlear has released its Tax Contribution Report 2026, outlining its tax strategy, governance framework and approach to engagement with global revenue authorities. The report details how the company manages tax risk, its stance on tax planning an...
Cochlear Highlights Mission and Innovation Focus in FY26 Presentation
Aug 17, 2026
Cochlear reiterated its mission to transform how hearing loss is understood and treated by delivering a range of implantable hearing solutions that provide lifetime hearing outcomes. The FY26 analyst and media presentation, led by CEO and Presiden...
Cochlear FY26 Profit Falls as Mix and Margin Pressure Offset Implant Volume Growth
Aug 17, 2026
Cochlear reported FY26 sales revenue of $2.3 billion, up 2% in constant currency, with underlying net profit falling 21% to $322 million as gross margins declined and transitional costs weighed on earnings. Cochlear implant unit volumes rose 5%, b...
Cochlear Declares A$1.30 Interim Dividend for Half-Year to June 2026
Aug 17, 2026
Cochlear Limited has declared an interim dividend of A$1.30 per ordinary fully paid share for the six-month period ended 30 June 2026. The dividend will trade ex-dividend on 21 September 2026, with a record date of 22 September and payment schedul...
Cochlear outlines FY26 performance and sustainability strategy in 2026 Annual Report
Aug 17, 2026
Cochlear Limited has released its 2026 Annual Report, outlining its strategy to create long-term value for stakeholders and summarising financial and operational performance for the year ended 30 June 2026. The report also details the company̵...
Cochlear Profit Slumps and Dividend Cut Despite Steady Revenue
Aug 17, 2026
Cochlear Limited reported largely flat revenue for the year to 30 June 2026, with sales revenue dipping slightly to $2,343.4 million from $2,355.8 million and total revenue edging up to $2,347.6 million. The group’s focus remains on its core...
Cochlear Sets Key Dates for 2026 Hybrid AGM and Director Nominations
Aug 16, 2026
Cochlear Limited has scheduled its 2026 annual general meeting for 10:00am AEDT on Monday, 26 October 2026, to be held as a hybrid gathering that allows both in‑person and online participation. The company has set 5:00pm AEST on Monday, 24 A...
JPMorgan exits substantial holder position in Cochlear
Aug 6, 2026
JPMorgan Chase Co has notified Cochlear that it has ceased to be a substantial holder in the company as of 4 August 2026, following a series of changes in relevant interests across multiple affiliated entities. The move reflects adjustments in JP...
Cochlear sets FY26 results release and analyst briefing for 18 August
Jul 28, 2026
Cochlear Limited has scheduled the announcement of its FY26 financial results for 18 August 2026, accompanied by a management presentation accessible to analysts and media via a Teams Live webcast and conference call. The briefing will include a Q...
Cochlear Keeps U.S. Duty‑Free Access for Hearing Implants After Tariff Review
Jul 23, 2026
Cochlear has confirmed that its hearing implant systems will continue to enter the U.S. market duty‑free following the U.S. Government’s Section 301 investigations into goods produced with forced labor. The final determination preserve...
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.