Medical technology company Enovis Corporation (NYSE: ENOV) met Wall Street’s revenue expectations in Q1 CY2025, with sales up 8.3% year on year to $558.8 million. The company’s full-year revenue guidance of $2.24 billion at the midpoint came in 1% above analysts’ estimates. Its non-GAAP profit of $0.81 per share was 8.9% above analysts’ consensus estimates.
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Enovis (ENOV) Q1 CY2025 Highlights:
- Revenue: $558.8 million vs analyst estimates of $558.9 million (8.3% year-on-year growth, in line)
- Adjusted EPS: $0.81 vs analyst estimates of $0.74 (8.9% beat)
- Adjusted EBITDA: $99.2 million vs analyst estimates of $98.78 million (17.8% margin, in line)
- The company lifted its revenue guidance for the full year to $2.24 billion at the midpoint from $2.21 billion, a 1.4% increase
- Management lowered its full-year Adjusted EPS guidance to $3.03 at the midpoint, a 4.7% decrease
- EBITDA guidance for the full year is $390 million at the midpoint, below analyst estimates of $409 million
- Operating Margin: -8.4%, down from -6.8% in the same quarter last year
- Free Cash Flow was -$44.86 million compared to -$73.08 million in the same quarter last year
- Market Capitalization: $1.96 billion
“We delivered a strong start to 2025, with first-quarter revenues and margins exceeding expectations,” said Matt Trerotola, 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.
Sales Growth
Examining a company’s long-term performance can provide clues about its quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. Enovis’s demand was weak over the last five years as its sales fell at a 9.1% annual rate. This wasn’t a great result 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 16.2% over the last two years is above its five-year trend, suggesting its demand recently accelerated. 
This quarter, Enovis grew its revenue by 8.3% year on year, and its $558.8 million of revenue was in line with Wall Street’s estimates.
Looking ahead, sell-side analysts expect revenue to grow 4.7% over the next 12 months, a deceleration versus the last two years. This projection is underwhelming and implies its products and services will face some demand challenges.
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Operating Margin
Operating margin is one of the best measures of profitability because it tells us how much money a company takes home after subtracting all core expenses, like marketing and R&D.
Enovis’s high expenses have contributed to an average operating margin of negative 9% 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.
Looking at the trend in its profitability, Enovis’s operating margin decreased by 41.9 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 32.5 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.
Enovis’s operating margin was negative 8.4% this quarter. 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.
Enovis’s EPS grew at a remarkable 9.1% compounded annual growth rate over the last five years, higher than its 9.1% annualized revenue declines. However, we take this with a grain of salt because its operating margin didn’t expand and it didn’t repurchase its shares, meaning the delta came from reduced interest expenses or taxes.
In Q1, Enovis reported EPS at $0.81, up from $0.50 in the same quarter last year. This print beat analysts’ estimates by 8.9%. Over the next 12 months, Wall Street expects Enovis’s full-year EPS of $3.14 to grow 4.5%.
Key Takeaways from Enovis’s Q1 Results
It was encouraging to see Enovis beat analysts’ EPS expectations this quarter. We were also glad its full-year revenue guidance slightly exceeded Wall Street’s estimates. On the other hand, its full-year EPS guidance missed significantly and its full-year EBITDA guidance fell short of Wall Street’s estimates. Overall, this was a weaker quarter. The stock traded down 7.8% to $31.49 immediately following the results.
Enovis may have had a tough quarter, but does that actually create an opportunity to invest right now? The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free.
