Cochlear (ASX:COH) share price sinks: How did its result compare to expectations?

The Cochlear Limited (ASX: COH) share price has been the worst performer on the S&P/ASX 200 Index (ASX: XJO) on Friday.

In late afternoon trade, the hearing solutions company's shares are down 7% to $237.81.

Why is the Cochlear share price under pressure?

Investors have been selling down the Cochlear share price on Friday following the release of its full year results.

Although the company delivered a profit result in line with its guidance, it fell short of the market's expectations.

Unfortunately for the Cochlear share price, this was the case for its guidance for FY 2022 as well. This has left analysts scrambling to adjust their estimates and recommendations today.

How did Cochlear's result compare to expectations?

Goldman Sachs has been running the rule over the Cochlear result. It notes that the company's revenue was in line with expectations, but its earnings fell short.

The broker commented: "FY21 revenue in-line, earnings (2)% below. Revenue of $1,489m was in-line with consensus, with YoY growth of +19% representing a +1% CAGR from FY19. Gross margins fell 200bps from 75% to 73% (half driven by FX), whilst opex grew +5%, contributing to a (2)% earnings miss, albeit still comfortably within the middle of guided range ($237m vs. $225-245m)."

While that was disappointing, the biggest impact on the Cochlear share price appears to have been its guidance.

Goldman explained: "COH targets earnings of $265-285m in FY22, representing growth of +12-20% on a heavily Covid-impacted comparator, approximately (12)-(5)% below current consensus."

"Developed markets are expected to grow in FY22 but COH highlights that surgery rates remain highly variable and that, whilst guidance factors some continuing Covid impact, it does not consider a more material disruption that significantly impacts sales."

Goldman added: "It is worth highlighting that FY22 earnings guidance implies a +0-2% 3-year CAGR from FY19, suggesting the recovery will likely still take longer than for many other stocks in the sector."

Are its shares in the buy zone?

While Goldman Sachs hasn't updated its recommendation yet, it previously had a sell rating and $189.00 price target.

Given the above, it seems highly unlikely that the broker's opinion will change on the Cochlear share price once it has fully digested the result.