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Highlights:
Cochlear Ltd’s share price has decreased by approximately 7.5% since the start of 2025.
The company continues to lead in the global hearing device market with a broad international presence.
Currently, Cochlear Ltd shares are trading at a price-sales ratio lower than their historical average.
Cochlear Ltd (ASX:COH) is a prominent medical device company based in Sydney, specializing in the design, manufacture, and distribution of hearing implants for individuals with hearing impairments. Established in 1981, Cochlear has grown to become a leader in its field, providing innovative solutions that significantly improve the quality of life for individuals affected by hearing-related conditions. With a presence in over fifty countries and a dedicated workforce of more than 5,000 employees, Cochlear has cemented its place as a global leader in hearing devices, having delivered over 750,000 implantable devices worldwide.
Business Operations of Cochlear Ltd
Cochlear’s primary focus is on the development of three distinct types of hearing implants, each tailored to different medical requirements. These implants are designed to address a range of hearing loss scenarios, from severe to profound hearing impairment. The company’s mission revolves around enhancing the quality of life for its customers, with a commitment to providing advanced medical technologies that help individuals regain or improve their ability to hear.
Cochlear Ltd's operations span across diverse international markets, and its growth is driven by continued advancements in hearing technologies. The company's global presence and strong product portfolio have contributed to its reputation as an innovator in the healthcare industry.
Current Share Price Valuation
In early 2025, Cochlear Ltd's share price has experienced a decline of approximately 7.5%, raising questions about the company's current valuation. To assess whether the shares are appropriately priced, examining the price-to-sales ratio can provide useful insights into the company's market valuation relative to its revenue. Currently, Cochlear Ltd shares have a price-sales ratio of around 7.95x. This compares to the company's five-year average of 9.18x, indicating that the shares are currently trading below their historical valuation levels.
While this could suggest a reduction in the company's share price or an increase in its sales, the context behind this ratio is crucial. Over the past three years, Cochlear has seen revenue growth, which has contributed to the company’s overall financial performance. However, it’s important to note that the price-sales ratio is just one of many metrics used to assess a company's valuation, and it should not be relied upon in isolation when evaluating the overall financial health of a business.
Cochlear vs. JB Hi-Fi Ltd
To gain a broader perspective on the performance of Cochlear Ltd shares, it is useful to look at other companies in different sectors, such as JB Hi-Fi Ltd. Founded in 1974, JB Hi-Fi is one of Australia's largest retailers of electronics and home entertainment products. The company operates through several segments, including JB Hi-Fi Australia, JB Hi-Fi New Zealand, and The Good Guys, which was acquired in 2016.
While Cochlear is a growth-focused company in the healthcare sector, JB Hi-Fi follows a cost-leadership strategy, often competing through pricing strategies and product discounts. JB Hi-Fi’s share price has seen significant growth in 2025, reaching approximately 83.9% above its 52-week low. This contrast in performance between the two companies highlights the different dynamics of their respective industries—healthcare and retail.
