Buffett Brain · Research note
Score updated 6 Oct 2026
CBHD.DE· Healthcare
Coloplast
Coloplast's 20.3% 5y ROIC is sector-leading, but management's capital allocation raises questions.
Buffett fit
Partial fit
Owner
78
Durability
80
Management
24
Price
100
Score updated 6 Oct 2026
Buffett's checklist
Each number against Buffett's bar, and where it ranks among Healthcare stocks in our database.
How much profit the business makes on each dollar invested in it. Higher is better.
What is left of each sale after the cost of making the product. A high number often means pricing power.
The cash the business earns for its owners, compared with the price of the whole company.
How fast sales grew each year over the last five years.
How many years of today's profit you pay for at today's price. Lower means cheaper.
How much the company owes compared with what it owns outright. Lower is safer.
The four pillars
How the business measures up on each of Buffett's four tests.
If we owned Coloplast entirely, the primary focus would be on improving cash conversion given the /Net Income ratio of 0.28.
The full reasoning comes with a free account.
Coloplast's 5y of 20.3% suggests a durable competitive advantage, likely from brand strength in niche healthcare segments.
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Management's is questionable, as indicated by the share count CAGR of 1.8%, which suggests potential dilution.
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Coloplast's valuation appears attractive with a of 2.2 and an earnings yield of 44.58%, suggesting the market has priced in significant risks.
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- The full reasoning behind all four pillars
- The 5-year price target and the return it implies
- What would change the call
- Graham, Lynch and Greenblatt on the same stock
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For and against
The strongest points on each side, with the numbers behind them.
In its favor
5- 120.3% 5y is top-quintile in healthcare, indicating strong returns on invested capital.
- 2 of 27.0% is well above the sector's top-quintile cutoff of 16.2%.
- 3Net margin of 18.7% places it in the top quintile within the healthcare sector.
- 4Interest coverage ratio of 9.0 shows the ability to comfortably meet interest obligations.
Concerns
5- 1/Net Income ratio of 0.28 suggests issues with cash flow conversion.
- 2Share count CAGR of 1.8% indicates potential dilution over the past five years.
- 3Net debt/EBITDA of 2.58 exceeds Buffett's comfort zone, indicating concerns.
- 4EPS CAGR of -0.25% over five years shows stagnation in earnings growth.
Price history
$54.56-60.8%· 5-year return
Weekly closing prices. Touch or hover the line for a date.
The business
How the business works
Coloplast develops and sells healthcare products across various segments, including ostomy and continence care. Revenue is $27.03B, with a net margin of 18.7%, indicating strong profitability. The company's is 27.0%, placing it in the top quintile within healthcare. However, the /Net Income ratio of 0.28 suggests cash conversion issues, impacting unit economics.
How this analysis has moved
The call has held across 3 reviews.
Sep 27, 2026 → Oct 5, 2026
What other investors would say
The same company, judged by three other documented playbooks.
Keep researching
Similar companies in Healthcare
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