Glass and windows manufacturer Tecnoglass (NYSE: TGLS) beat Wall Street’s revenue expectations in Q1 CY2025, with sales up 15.4% year on year to $222.3 million. The company expects the full year’s revenue to be around $990 million, close to analysts’ estimates. Its non-GAAP profit of $0.92 per share was 12.2% above analysts’ consensus estimates.

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Company Overview

The first-ever Colombian company to trade on the NASDAQ, Tecnoglass (NYSE: TGLS) is a manufacturer of architectural glass, windows, and aluminum products.

Sales Growth

A company’s long-term sales performance is one signal of its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Over the last five years, Tecnoglass grew its sales at an incredible 17.5% compounded annual growth rate. Its growth surpassed the average industrials company and shows its offerings resonate with customers, a great starting point for our analysis.

We at StockStory place the most emphasis on long-term growth, but within industrials, a half-decade historical view may miss cycles, industry trends, or a company capitalizing on catalysts such as a new contract win or a successful product line. Tecnoglass’s annualized revenue growth of 8.3% over the last two years is below its five-year trend, but we still think the results were respectable.

This quarter, Tecnoglass reported year-on-year revenue growth of 15.4%, and its $222.3 million of revenue exceeded Wall Street’s estimates by 3.3%.

Looking ahead, sell-side analysts expect revenue to grow 7% over the next 12 months, similar to its two-year rate. This projection doesn't excite us and indicates its products and services will face some demand challenges. At least the company is tracking well in other measures of financial health.

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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 procuring and manufacturing its products, marketing and selling those products, and most importantly, keeping them relevant through research and development.

Tecnoglass has been a well-oiled machine over the last five years. It demonstrated elite profitability for an industrials business, boasting an average operating margin of 27.3%. This result isn’t surprising as its high gross margin gives it a favorable starting point.

Looking at the trend in its profitability, Tecnoglass’s operating margin rose by 7.1 percentage points over the last five years, as its sales growth gave it immense operating leverage.

This quarter, Tecnoglass generated an operating profit margin of 26.7%, up 5.4 percentage points year on year. The increase was solid, and because its operating margin rose more than its gross margin, we can infer it was more efficient with expenses such as marketing, R&D, and administrative overhead.

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.

Tecnoglass’s EPS grew at an astounding 43.8% compounded annual growth rate over the last five years, higher than its 17.5% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.

Diving into the nuances of Tecnoglass’s earnings can give us a better understanding of its performance. As we mentioned earlier, Tecnoglass’s operating margin expanded by 7.1 percentage points over the last five years. This was the most relevant factor (aside from the revenue impact) behind its higher earnings; taxes and interest expenses can also affect EPS but don’t tell us as much about a company’s fundamentals.

Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.

For Tecnoglass, EPS didn’t budge over the last two years, a regression from its five-year trend. Given the merits in other parts of its business, we’re hopeful it can revert to earnings growth in the coming years.

In Q1, Tecnoglass reported EPS at $0.92, up from $0.66 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects Tecnoglass’s full-year EPS of $3.91 to grow 6.4%.

Key Takeaways from Tecnoglass’s Q1 Results

We enjoyed seeing Tecnoglass beat analysts’ revenue expectations this quarter. We were also glad its EBITDA outperformed Wall Street’s estimates. Zooming out, we think this was a good print with some key areas of upside. The stock traded up 2.8% to $72.69 immediately following the results.

Sure, Tecnoglass had a solid quarter, but if we look at the bigger picture, is this stock a buy? We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free.