Cooper Companies (COO) Economic Moat Analysis—

Moat—

Insufficient evidence for every rubric criterion; no category score is inferred.

structural advantage · 2/4 · Existing approvals and the substantial PMA evidence burden establish a real market-access hurdle. Reported intellectual-property enforcement and know-how add capabilities. However, regulatory burdens vary by class and named rivals already compete in the same lens categories; relative superiority and the economic contribution of protected products remain unquantified.

durability · 1/4 · Several-year PMA preparation and review can slow entry, but do not establish long-lived economic protection across Cooper's portfolio. Lower-burden device classes and established competitors limit the inference. Missing exclusivity periods, patent lives and demonstrated customer persistence leave the evidenced protection fragile as a company-wide moat.

customer dependency · — · Segment organic growth provides evidence of demand, but does not establish that customers depend on Cooper specifically. The catalog supplies no demonstrated switching burden, embedded workflow dependency, exclusive customer commitment or product-specific repeat-purchase evidence sufficient to grade this criterion.

erosion resilience · 2/4 · Fiscal 2025 organic growth and continued CooperSurgical growth support resilience, while third-quarter CooperVision organic revenue was flat. Manufacturing-cost pressure and substantial litigation expense show real vulnerabilities. Improved adjusted operating margin demonstrates some capacity to respond, without proving successful defense of market share or a durable competitive advantage.

Pricing power—

Insufficient evidence for every rubric criterion; no category score is inferred.

realized pricing · — · The supplied organic growth reconciliations remove currency and acquisition or divestiture effects, but do not isolate price from volume or mix. Neither growth nor margin performance establishes observed pricing outcomes. The prior assessment's pricing-pressure disclosures are absent from this catalog and cannot support a carried-forward grade.

retention · 2/4 · Fiscal 2025 organic growth and positive second-quarter growth in both segments provide indirect operating evidence of continuing demand. Third-quarter CooperVision stagnation and slower CooperSurgical organic growth temper that evidence. This is a mixed repeat-demand assessment, without a measured customer retention rate or demonstrated switching friction.

margin resilience · 2/4 · Third-quarter adjusted operating margin improved 30 basis points to 26%, supported by expense management and productivity. Adjusted gross margin declined 60 basis points from manufacturing costs and currency, and litigation drove a second-quarter GAAP operating loss. This demonstrates mixed profitability resilience, without evidence that pricing passed through higher costs.

contractual freedom · — · The current catalog supplies no customer-contract price-setting rights, repricing schedules, discount obligations or termination terms sufficient to assess commercial discretion. Disclosed borrowing terms concern Cooper's financing and cannot substitute for customer pricing contracts. The prior fixed-price and capitated-pricing evidence is unavailable here.

Predictability98

5 consecutive published annual periods. Equal weights: nondeclining revenue frequency; revenue-growth volatility (5–40pp); positive FCF frequency; FCF-margin volatility (3–20pp). Stability indicator, not a growth forecast.

Nondeclining revenue years (%)

100.00

Revenue growth volatility (pp)

2.90

Positive FCF years (%)

100.00

FCF margin volatility (pp)

4.32

observedAnnualPeriods

5.00

Financial strength52

Equal-weight grades: debt/FCF (1–8x), net debt/earnings before interest and tax (0–5x), interest service (1–12x), current ratio (0.75–2x). Earnings use reported operating income, an original issuer-reported unadjusted EBIT reconciled to net income, income tax and signed net interest, or reported pretax profit plus reported gross interest expense. Reported EBIT is distinct from GAAP operating income and gross interest. Interest service uses earnings/interest expense; if unavailable, it uses reported operating cash flow/cash interest paid, without relabeling cash paid as accrued expense. Nonpositive cash flow/earnings score 0 for their service component; reported zero interest with a positive numerator scores 100. Net cash scores 100 for net leverage. Missing disclosures remain unavailable. General nonfinancial-company rubric, not a credit rating; exceptional and nonoperating gains are not normalized out. IFRS finance-cost and cash-flow classifications retain their reported scope.

debtFcfGrade

31.76

netDebtEbitGrade

29.87

interestCoverageGrade

52.99

currentRatioGrade

91.43

Debt / FCF (x)

5.78

Net debt / operating income (x)

3.51

Interest coverage (x)

6.83

Current ratio (x)

1.89

Capital allocation77

Three-year equal-weight indicators: pretax return on average invested capital (0–25%; equity + debt − cash, each year and its prior year), share-count growth (0–5%, lower better), share-based cost/revenue (2–20%, lower better), consolidated FCF/net income (0–1x). Return uses reported operating income, an original issuer-reported unadjusted EBIT reconciled to net income, income tax and signed net interest, or EBIT calculated from reported pretax profit plus reported gross interest expense; the issuer-reported EBIT is distinct from GAAP operating income and gross interest; exceptional/nonoperating gains are not normalized out. Share-based cost uses the reported cash-flow add-back or, if absent, separately reported recognized compensation expense; the latter never becomes an FCF adjustment. Nonpositive net income scores 0 for cash conversion; absent income/FCF stays unavailable. ROIC remains undefined for nonpositive invested capital; the explicit asset-return alternative does not change the ROIC chart. Missing financial inputs alone never trigger an alternative. Does not establish acquisition quality or buyback timing.

3-year pre-tax operating return (%)

6.23

3-year average dilution (%)

0.32

3-year average SBC / revenue (%)

1.79

cashConversionGrade

88.26

Management56

Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.

capital discipline · 2/4 · Actual operating cash generation covered capital spending in fiscal 2025 and the latest quarter. Covenant compliance and available credit support financing flexibility. Substantial repurchases alongside higher net revolver borrowing, a December 2026 maturity and litigation expense temper discipline; investment returns and repurchase value creation remain unestablished.

incentive alignment · 3/4 · Actual fiscal 2025 CEO grants included 50% of equity value in three-year performance-conditioned PSUs. Executive share-retention requirements and disclosed NEO ownership compliance support alignment. Credit for unvested RSUs and target-level PSU acceleration after qualifying change-in-control termination weaken rigor. These are implemented arrangements, not proof of eventual vesting or superior outcomes.

execution · 2/4 · Organic growth, cash generation and adjusted operating-margin improvement support execution through operating evidence. Flat recent CooperVision revenue, manufacturing-cost pressure and substantial litigation expense demonstrate setbacks. Management reports agreements covering substantially all outstanding fertility-recall claims; this supports progress addressing exposure, without establishing complete resolution or elimination of future claims.

governance · 2/4 · Independent-director compensation decisions and actual board additions following shareholder engagement support functioning oversight. The tribunal decision largely supporting a failure to withhold acquisition-related payroll taxes is a concrete adverse compliance outcome. These disclosures support mixed governance; the new directors' effect on outcomes and broader control effectiveness remain unestablished.