What Happened?
Shares of medical device company CooperCompanies (NASDAQ: COO) fell 12.4% in the afternoon session after the company reported mixed second-quarter 2025 results, with its forecast for the upcoming quarter falling short of Wall Street's expectations.
For the second quarter, the company's revenue of $1.06 billion met analyst estimates, and its adjusted earnings per share of $1.10 beat consensus by 3%. CooperCompanies also slightly raised its adjusted earnings guidance for the full year. However, investors appeared to focus on the weaker aspects of the report. The company's revenue guidance for the third quarter came in 2.8% below projections.
Additionally, organic revenue grew by only 2% year on year, missing expectations, while operating margins contracted compared to the same period last year. The soft outlook and signs of slowing core growth overshadowed the earnings beat, prompting a significant sell-off in the stock.
The shares closed the day at $64.58, down 12.9% from previous close.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy CooperCompanies? Access our full analysis report here, it’s free.
What Is The Market Telling Us
CooperCompanies’s shares are not very volatile and have only had 8 moves greater than 5% over the last year. Moves this big are rare for CooperCompanies and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 6 days ago when the stock gained 3.2% on the news that the major indices rebounded, as Fed Chair Jerome Powell delivered dovish remarks at the much-awaited Jackson Hole symposium. Powell suggested that with inflation risks moderating and unemployment remaining low, the Federal Reserve might consider a shift in its monetary policy stance, including potential interest rate cuts. This outlook eased market concerns about prolonged high interest rates and their impact on economic growth. The prospect of lower borrowing costs bolstered investor confidence, particularly in sectors that have lagged, leading to a broad rally across the market.
CooperCompanies is down 28.6% since the beginning of the year, and at $64.75 per share, it is trading 41.8% below its 52-week high of $111.23 from September 2024. Investors who bought $1,000 worth of CooperCompanies’s shares 5 years ago would now be looking at an investment worth $819.91.
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