Coloplast Still Pricey Even As A High-Quality Med-Tech Growth Name

2025-01-09 15:44:14 ET

Summary

• I see some credible, if modest, concerns for fiscal Q1'25 numbers, with the possibility of an organic revenue growth and margin miss.
• Coloplast has multiple credible long-term growth drivers, including share growth in the U.S., overall share growth in wound care, and new product introductions.
• Coloplast has recently been missing margin expectations by a modest amount and share growth in the U.S. has arguably come slower than bulls expected.
• Despite high quality growth potential, Coloplast's current valuation doesn't offer a compelling risk/reward trade-off today.

The last six months haven’t been very good to Coloplast ( OTCPK:CLPBY ) ( OTCPK:CLPBF ) (COLO-B.CO), as this Danish leader in ostomy, continence, wound, and voice/respiratory care has missed a couple of quarterly margin expectations. This has caused sell-side expectations to come down a little on revenue and margins in response to a host of minor issues. At the same time, though, important launches have continued to perform well and the company does still have a credible path toward increased market share in the U.S. – a major market where the company punches below its weight....

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