With marginal growth across key metrics during the third quarter, The Cooper Companies Inc. (NASDAQ:COO) also finalized its strategic review process, which was initially announced in December last year.
In Cooper Companies (COO) Bets on Fertility Growth Despite Weakness in CooperVision, we highlighted the company’s 1% year-over-year topline growth during the recently reported quarter, which also included 1% organic growth. Adjusted diluted EPS of $1.15 represented a 4% jump from Q3 FY25.
The strategic review represents a comprehensive effort by the management to examine various aspects of the business. Some of these include the underlying portfolio, capital deployment priorities, strategic alternatives, and corporate structure & strategy.
Copyright: nimon / 123RF Stock Photo
CooperSurgical Retention and Expanded Buyback Program
A key talking point of the strategic review revolved around sale of the company’s CooperSurgical unit. However, following a detailed assessment of various alternatives, the Board decided to retain the business in the interest of shareholders. The Board also acknowledged certain temporary drivers of the unit’s valuation gap, as indicated by the offers received. The unanimous view was that the offers were not in shareholders’ best interest.
Share buyback was another important component of the strategic review process. The Board reiterated its commitment to carry out buybacks, viewing them as value-driver for shareholders. It authorized the expansion of existing repurchase program from $2 billion to $3 billion, after $445 million buybacks had already been executed during the ongoing fiscal year.
On the operational front, various areas of improvement were identified. The company aims to grow the CooperVision’s global sales and marketing organization. At the same time, it will push to introduce some cost-cutting and efficiency measures. Acceleration of product launches and revised inventory and logistics initiatives will also be prioritized.
Weaknesses in Recent Quarter
Bears point to notable weaknesses in the third quarter print. Adjusted gross margins went down by 60 basis points compared to the same period last year, amid higher manufacturing costs and currency fluctuations. CooperVision segment delivered flat organic growth due to challenges across the Asia Pacific and Americas regions. Organic revenues across other product categories were also affected. The sphere and other lens category declined 1% organically year-over-year.
Institutional Sentiment
Institutional interest across 1,000+ hedge funds tracked by Insider Monkey shows marginal increase in institutional exposure in the stock. According to 13F filing data, total number of hedge funds that held positions in the stock jumped to 52 by the end of second quarter in 2026, relative to 49 funds in the previous quarter. Short interest in the stock sits above 4%, which indicates modest level of active betting against the stock.
With 15.03 million shares, BlackRock is the largest institutional investor in The Cooper Companies, owning 7.71% of the outstanding shares. Other notable institutional names include Vanguard Capital Management and State Street Corporation, which held approximately 6.54% and 4.56% of outstanding stock, respectively.
Way Forward
For The Cooper Companies, the strategic review preserves CooperSurgical’s potential long-term upside after the Board concluded that retaining the business was in shareholders’ best interest. Expanded buyback program signals management confidence in business fundamentals. Operational and commercial improvements are also expected to enhance profitability and market position across both its CooperVision and CooperSurgical segments.
READ NEXT: 12 Best Industrial Stocks With More Than 50% Upside and 10 Best Stocks Under $10 That Could Triple.
