U.S. Veterans Affairs hearing-aid market: August VA data shows continued momentum for Demant’s Oticon Zeal as Sonova and GN lose share

Overview

This industry update tracks August 2026 U.S. Veterans Affairs hearing-aid purchasing and share data. Bernstein finds that Demant’s Oticon Zeal continued to gain traction after launch, while the VA channel’s product-sensitive customer base and monthly data make it a useful early indicator for broader competitive trends.

Core views

VA hearing-aid unit sales increased 3% year on year in August, following 6% growth in July, although Bernstein notes that monthly volatility is normal and the comparisons do not adjust for trading days. The report emphasizes the channel’s strategic importance: VA accounted for 15% of U.S. hearing-aid units in 2025 despite veterans representing about 6% of the U.S. adult population. Since 2000, VA unit sales grew at a 7% CAGR against 4% in the private market, though its five-year CAGR has slowed to 3% following a slower post-pandemic reopening and audiologist shortages. Demant was the principal August share winner. Its overall VA share rose 80bp month on month to 23.9%, after gains of 30bp in July and 50bp in June. The report links this momentum to the May launch of Oticon Zeal, a custom ITE multiprocessor product priced at a $695 ASP, a 42% premium to Demant’s rechargeable RIC device. Zeal’s share of the combined rechargeable and multiprocessor ITE categories rose from about 22% in June to 24% in July and 27% in August, moving Demant ahead of Starkey for second place. Bernstein views this sustained post-launch progression positively because market share often fades in the months after a new product enters the channel. Sonova’s overall VA share declined roughly 50bp in August after a 45bp gain in July, but it remained the leader in the combined ITE rechargeable and multiprocessor categories at 42%, down from 44% in July. Its Virto R launch had supported significant share gains since November 2025, while Sphere Ultra represented about 52% of Sonova’s rechargeable RIC units in both July and August. Bernstein notes that a larger Sphere mix could lift average selling prices because Sphere carries an approximately 10% premium to standard Infinio in the VA channel. The report expects EON Sphere’s expected November channel entry to create a fuller shift toward Sphere, while noting that early Sphere uptake had been constrained by receiver-durability issues, now resolved, and potentially by the device’s larger size for the VA’s younger, predominantly male users. GN Hearing lost 20bp of VA share in August following a 30bp decline in July. Bernstein attributes recent pressure partly to share moving toward ITE devices after the launches of Virto R and Zeal. GN’s last channel launch, the high-powered ReSound Enzo IA in November 2025, initially helped rechargeable BTE share and lifted overall share by about 10bp to 10.3% in December. The report also places this performance in historical context: GN’s VA share fell from 21% in 2017 to 10% in 2025, reflecting challenges with the ReSound One M&RIE form factor and restricted access to VA audiologists during the pandemic. The report explains why VA share data matter beyond the channel itself. VA customers are relatively young, face no direct device cost, and place greater value on technology, connectivity and rechargeable products; audiologists also have an important role in product recommendation. The channel therefore provides the only granular monthly manufacturer-share dataset and can signal how new products may perform in the wider market. Bernstein identifies November data, released in December, as an early indicator of competitiveness among new RIC products. VA contracts cover the five major manufacturers—GN Store Nord, Sonova, Starkey, Demant and WS Audiology—and centralized purchasing lowers ASPs. Bernstein estimates a VA hearing-aid ASP of around $480, compared with $600–$1,100 in the private wholesale market. Lower VA ASPs reduce gross margins, but the report notes that lower selling and marketing costs limit the effect on EBITA margins. Exposure differs meaningfully: VA represents about 13% of Sonova’s hearing-aid wholesale sales, versus 5% for Demant and 4% for GN.

Analysis framework

Bernstein analyzes monthly VA unit-volume and manufacturer-share data, then links changes to product launches, device features, category mix and historical channel behavior. It supplements the current-month analysis with manufacturer exposure estimates, long-term channel growth and procurement economics to assess the relevance of VA trends for the hearing-aid market.

Methodology notes

• Industry AnalysisVolume-price decomposition

  Monthly unit-volume, market-share and average-selling-price analysis

  The report combines VA unit growth and manufacturer share movements with product price premiums to explain competitive momentum and potential revenue-mix effects.

• Valuation methodsP/E and PEG Valuation

  P/E-based target-price analysis for Demant and Sonova

  Bernstein assigns 70% weight to P/E valuation for each company, using 18.0x 2026E EPS for Demant and 21x 2026/27E EPS for Sonova.

• Valuation methodsDCF (Discounted Cash Flow)

  DCF target-price component for Demant and Sonova

  The report assigns 30% weight to DCF valuation, using an 8% WACC and 3% terminal growth rate for both companies.

• Valuation methodsSOTP (Sum-of-the-Parts) Valuation

  Sum-of-the-parts valuation for GN

  GN’s target price values the hearing business through the cash and share components of the sale price plus continuing operations using a 10x 2026 adjusted EBIT multiple.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Demant A/S (DEMANT.DC)

  Zeal’s VA share gains support the report’s positive product-read-through.

  Strengths

  Overall VA share reached 23.9%; Zeal rose to 27% of the combined ITE categories.

  Weaknesses

  VA exposure is about 5% of hearing-aid wholesale sales.

  Comparison

  Passed Starkey for second place in the relevant ITE categories; gained share while Sonova, GN and WSA declined.

  Risks

  Economic weakness, reimbursement-policy changes, stronger competitor launches and expansion of the U.S. OTC market are cited downside risks.

• Sonova Holding AG (SOON.SW)

  VA share data track the performance of Virto R and Sphere products.

  Strengths

  Continues to lead the combined ITE categories with 42% share; Sphere carries an approximately 10% price premium to Infinio.

  Weaknesses

  Overall VA share fell about 50bp in August and ITE-category share fell from 44% to 42%.

  Comparison

  Has the largest VA exposure among the three companies, at about 13% of hearing-aid wholesale sales.

  Risks

  Unexpected competitor launches, a weaker macro environment and Swiss-franc strengthening are cited downside risks.

• GN Store Nord A/S (GN.DC)

  VA trends highlight continued competitive pressure on GN Hearing.

  Strengths

  ReSound Enzo IA previously supported gains in rechargeable BTE products.

  Weaknesses

  VA share declined 20bp in August after a 30bp decline in July; historical VA share declined from 21% in 2017 to 10% in 2025.

  Comparison

  Its estimated VA exposure is about 4% of hearing-aid wholesale sales, below Demant and Sonova.

  Risks

  The report cites upside target-price risks from an unexpected product launch, stronger macro and consumer conditions, and Danish-krone weakness.

Key data

• VA hearing-aid unit growth, August 2026+3% YoYFollowed +6% growth in July; trading-day differences are not adjusted.
• Demant VA market share, August 202623.9%Up 80bp month on month.
• Sonova VA market share, August 202650.9%Down 50bp month on month.
• Demant ITE-category share, August 202627%Up from 24% in July and about 22% in June.
• Sonova ITE-category share, August 202642%Down from 44% in July but still category-leading.
• Sphere share of Sonova rechargeable RIC units52%Unchanged from July to August.
• VA share of U.S. hearing-aid units, 202515%VA unit-sales CAGR was 7% since 2000 and 3% over the latest five years.
• Estimated VA hearing-aid ASPabout $480Compared with private wholesale ASPs of $600–$1,100.

Impact & implications

Bernstein regards Demant’s successive Zeal gains as encouraging evidence of product acceptance in an influential channel. Sonova retains category leadership but faces near-term share pressure, while a higher Sphere mix could support ASPs. The upcoming November VA data are positioned as an important read-through on product competitiveness.

Risks

• For Demant, Bernstein cites weaker hearing-aid demand, reimbursement-policy changes, stronger competitor launches and expansion of the U.S. OTC market as downside risks.
• For Sonova, cited downside risks include an unexpected competitor product launch, weaker macro conditions and Swiss-franc appreciation.
• VA market growth has slowed as the channel reopened more slowly after the pandemic and faced audiologist shortages.

What to watch

• November VA data, expected to be released in December, for an early view of competition among new RIC products.
• Whether Demant’s Zeal can sustain share gains after its initial launch period.
• Whether Sonova can raise Sphere’s product mix and capture its approximately 10% ASP premium.
• The expected November entry of EON Sphere into the VA channel.