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Highlights
- COH designs innovative hearing implants globally
- Healthcare stocks offer resilient, sticky revenue
- Valuation suggests COH trading below 5-year average
Cochlear Ltd (ASX:COH) has seen a slight uplift of 0.3% in its share price since the beginning of 2025. As a key player in the ASX200 stocks category, Cochlear continues to draw attention from market participants looking at long-term opportunities in the healthcare space.
A Global Leader in Hearing Solutions
Founded in Sydney in 1981, Cochlear Ltd (COH) has established itself as a global leader in the field of hearing implants. The company designs and manufactures a suite of implantable hearing devices, addressing various medical needs for individuals with hearing impairments. With over 750,000 devices provided globally and operations across 50 countries, COH supports its mission to enhance the quality of life for individuals with hearing challenges. The organisation employs over 5,000 professionals and is recognised for its technological innovation and patient-centric approach.
The Case for Healthcare in ASX200 Stocks
The healthcare sector, represented by the S&P/ASX200 Healthcare Index (ASX:XHJ), has underperformed the broader ASX200 over the past five years. However, its long-term resilience makes it a sector worth monitoring.
- Resilient Revenue Base
Healthcare spending typically remains stable even during economic downturns. Unlike cyclical industries, the demand for healthcare services tends to persist, resulting in more predictable revenue streams. This stability was evident during the Global Financial Crisis when healthcare was among the best-performing sectors.
- Strong Growth Outlook
Global healthcare expenditure continues to rise, especially in regions like the United States, which accounts for more than 40% of worldwide spending. Between 2022 and 2027, healthcare spend in the U.S. is projected to grow at 7% annually, reaching US$819 billion. Sub-sectors such as healthcare IT and SaaS-based solutions are expected to exceed 15% annual growth from 2024 through 2030.
- Appeal for Ethical Investing
With growing interest in sustainable and ethical investing, healthcare companies offering vital services stand out. Sectors that contribute positively to society, such as healthcare, are increasingly being included in sustainable portfolios, reflecting a broader investment shift.
A Glance at Valuation
One way to assess COH’s current share price is through the price-to-sales (P/S) multiple. Cochlear Ltd currently trades at a P/S ratio of 8.62x, slightly below its 5-year average of 9.18x. This suggests that while revenue has been climbing over recent years, the share price hasn’t kept pace proportionally — a potential indicator of value.
While this metric offers a snapshot, it should be used alongside other valuation approaches for a comprehensive view.
Cochlear Ltd (COH), as part of the ASX200 stocks, presents a combination of innovative capability, revenue stability, and alignment with sustainable investing trends — characteristics that continue to support its relevance in today's healthcare landscape.
