Medical technology company Enovis Corporation (NYSE: ENOV) fell short of the market’s revenue expectations in Q4 CY2025 as sales rose 2.6% year on year to $575.8 million. The company’s full-year revenue guidance of $2.34 billion at the midpoint came in 0.7% below analysts’ estimates. Its non-GAAP profit of $0.95 per share was 13.1% above analysts’ consensus estimates.

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“Our 2025 performance reflects a year of meaningful operational progress for the Company. We advanced our second-year Lima integration priorities, operated effectively in a dynamic global environment, and continued to demonstrate above-market organic growth with sustainable year-over-year operating improvements which included positive free cash flow and debt reduction,” said Damien McDonald, Chief Executive Officer of Enovis.

Company Overview

With a focus on helping patients regain or maintain their natural motion, Enovis (NYSE: ENOV) develops and manufactures medical devices for orthopedic care, from injury prevention and pain management to joint replacement and rehabilitation.

Revenue Growth

Examining a company’s long-term performance can provide clues about its quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Enovis struggled to consistently generate demand over the last five years as its sales dropped at a 6% annual rate. This was below our standards and suggests it’s a low quality business.

We at StockStory place the most emphasis on long-term growth, but within healthcare, a half-decade historical view may miss recent innovations or disruptive industry trends. Enovis’s annualized revenue growth of 14.8% over the last two years is above its five-year trend, suggesting its demand recently accelerated.

This quarter, Enovis’s revenue grew by 2.6% year on year to $575.8 million, falling short of Wall Street’s estimates.

Looking ahead, sell-side analysts expect revenue to grow 5% over the next 12 months, a deceleration versus the last two years. This projection is underwhelming and indicates its products and services will see some demand headwinds.

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Operating Margin

Operating margin is an important measure of profitability as it shows the portion of revenue left after accounting for all core expenses – everything from the cost of goods sold to advertising and wages. It’s also useful for comparing profitability across companies with different levels of debt and tax rates because it excludes interest and taxes.

Enovis’s high expenses have contributed to an average operating margin of negative 22.8% over the last five years. Unprofitable healthcare companies require extra attention because they could get caught swimming naked when the tide goes out. It’s hard to trust that the business can endure a full cycle.

Analyzing the trend in its profitability, Enovis’s operating margin decreased by 48.4 percentage points over the last five years. The company’s two-year trajectory also shows it failed to get its profitability back to the peak as its margin fell by 46.2 percentage points. This performance was poor no matter how you look at it - it shows its expenses were rising and it couldn’t pass those costs onto its customers.

In Q4, Enovis generated a negative 87.2% operating margin. The company's consistent lack of profits raise a flag.

Earnings Per Share

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

Sadly for Enovis, its EPS and revenue declined by 4.6% and 6% annually over the last five years. We tend to steer our readers away from companies with falling revenue and EPS, where diminishing earnings could imply changing secular trends and preferences. If the tide turns unexpectedly, Enovis’s low margin of safety could leave its stock price susceptible to large downswings.

In Q4, Enovis reported adjusted EPS of $0.95, down from $0.98 in the same quarter last year. Despite falling year on year, this print easily cleared analysts’ estimates. Over the next 12 months, Wall Street expects Enovis’s full-year EPS of $3.30 to grow 3%.

Key Takeaways from Enovis’s Q4 Results

We were impressed by how significantly Enovis blew past analysts’ full-year EPS guidance expectations this quarter. We were also glad its EPS outperformed Wall Street’s estimates. On the other hand, its revenue slightly missed and its full-year revenue guidance fell slightly short of Wall Street’s estimates. Zooming out, we think this was a mixed quarter. The stock remained flat at $22.34 immediately after reporting.

Is Enovis an attractive investment opportunity right now? When making that decision, it’s important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here (it’s free).