Cochlear Earnings: Shares Remain Overvalued as Demand for Upgrades Softens

Wide-moat Cochlear's interim fiscal 2025 sales of AUD 1.2 billion and underlying net profit after tax of AUD 206 million, up 6% and 1% in constant currency, respectively, tracked slightly behind our full-year forecasts. While sales of cochlear and acoustic implants grew strongly on solid adult referral rates, services revenue moderated more than we expected, down 12% in constant currency. This was largely due to cost-of-living pressures in the US causing higher rates of cancellations, and the Nucleus 8 maturing in its product life cycle after a successful launch in 2023.