LeMaitre (NASDAQ:LMAT) Misses Q4 Sales Targets, Stock Drops 11%

February 27, 2025 at 16:32 PM EST

LMAT Cover Image

Medical device company LeMaitre Vascular (NASDAQ: LMAT) missed Wall Street’s revenue expectations in Q4 CY2024, but sales rose 14% year on year to $55.72 million. Next quarter’s revenue guidance of $57.7 million underwhelmed, coming in 1.6% below analysts’ estimates. Its GAAP profit of $0.49 per share was in line with analysts’ consensus estimates.

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LeMaitre (LMAT) Q4 CY2024 Highlights:

Revenue: $55.72 million vs analyst estimates of $56.08 million (14% year-on-year growth, 0.7% miss)
EPS (GAAP): $0.49 vs analyst estimates of $0.49 (in line)
Adjusted EBITDA: $15.03 million vs analyst estimates of $16.01 million (27% margin, 6.1% miss)
Management’s revenue guidance for the upcoming financial year 2025 is $239.1 million at the midpoint, in line with analyst expectations and implying 8.7% growth (vs 13.7% in FY2024)
EPS (GAAP) guidance for the upcoming financial year 2025 is $2.24 at the midpoint, beating analyst estimates by 3.5%
Operating Margin: 23.1%, up from 20.9% in the same quarter last year
Organic Revenue rose 14% year on year (15.8% in the same quarter last year)
Market Capitalization: $2.32 billion

Chairman/CEO George LeMaitre said, “2024 was a productive year. More reps, higher ASPs, a better GM and controlled spending produced growth in sales (+14%), op. income (+42%) & EPS (+44%). $300mm of cash provides strategic optionality.”

Company Overview

Founded in 1983, LeMaitre Vascular (NASDAQ: LMAT) develops, manufactures, and markets medical devices and implants used in vascular (related to the circulatory system) surgeries.

Surgical Equipment & Consumables - Specialty

The surgical equipment and consumables industry provides tools, devices, and disposable products essential for surgeries and medical procedures. These companies therefore benefit from relatively consistent demand, driven by the ongoing need for medical interventions, recurring revenue from consumables, and long-term contracts with hospitals and healthcare providers. However, the high costs of R&D and regulatory compliance, coupled with intense competition and pricing pressures from cost-conscious customers, can constrain profitability. Over the next few years, tailwinds include aging populations, which tend to need surgical interventions at higher rates. The increasing integration of AI and robotics into surgical procedures could also create opportunities for differentiation and innovation. However, the industry faces headwinds including potential supply chain vulnerabilities, evolving regulatory requirements, and more widespread efforts to make healthcare less costly.

Sales Growth

A company’s long-term performance is an indicator of its overall quality. While any business can experience short-term success, top-performing ones enjoy sustained growth for years. Over the last five years, LeMaitre grew its sales at a solid 13.4% compounded annual growth rate. Its growth beat the average healthcare company and shows its offerings resonate with customers.

Long-term growth is the most important, but within healthcare, a half-decade historical view may miss new innovations or demand cycles. LeMaitre’s annualized revenue growth of 16.6% over the last two years is above its five-year trend, suggesting its demand was strong and recently accelerated. LeMaitre Year-On-Year Revenue Growth

We can dig further into the company’s sales dynamics by analyzing its organic revenue, which strips out one-time events like acquisitions and currency fluctuations that don’t accurately reflect its fundamentals. Over the last two years, LeMaitre’s organic revenue averaged 15.5% year-on-year growth. Because this number aligns with its normal revenue growth, we can see the company’s core operations (not acquisitions and divestitures) drove most of its results. LeMaitre Organic Revenue Growth

This quarter, LeMaitre’s revenue grew by 14% year on year to $55.72 million but fell short of Wall Street’s estimates. Company management is currently guiding for a 7.9% year-on-year increase in sales next quarter.

Looking further ahead, sell-side analysts expect revenue to grow 10.6% over the next 12 months, a deceleration versus the last two years. Despite the slowdown, this projection is healthy and indicates the market is baking in success for its products and services.

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Operating Margin

LeMaitre has been an efficient company over the last five years. It was one of the more profitable businesses in the healthcare sector, boasting an average operating margin of 21.1%.

Looking at the trend in its profitability, LeMaitre’s operating margin rose by 1.5 percentage points over the last five years, as its sales growth gave it operating leverage. This performance was mostly driven by its recent improvements as the company’s margin has increased by 7.2 percentage points on a two-year basis.

LeMaitre Trailing 12-Month Operating Margin (GAAP)

This quarter, LeMaitre generated an operating profit margin of 23.1%, up 2.2 percentage points year on year. This increase was a welcome development and shows it was recently more efficient because its expenses grew slower than its revenue.

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.

LeMaitre’s EPS grew at an astounding 17.1% compounded annual growth rate over the last five years, higher than its 13.4% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.

Diving into LeMaitre’s quality of earnings can give us a better understanding of its performance. As we mentioned earlier, LeMaitre’s operating margin expanded by 1.5 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.

In Q4, LeMaitre reported EPS at $0.49, up from $0.38 in the same quarter last year. This print was close to analysts’ estimates. Over the next 12 months, Wall Street expects LeMaitre’s full-year EPS of $1.94 to grow 11%.

Key Takeaways from LeMaitre’s Q4 Results

We enjoyed seeing LeMaitre beat analysts’ full-year EPS guidance expectations this quarter. We were also happy its organic revenue narrowly outperformed Wall Street’s estimates. On the other hand, its revenue guidance for next quarter missed significantly and its revenue fell slightly short of Wall Street’s estimates. Overall, this quarter could have been better. The stock traded down 11% to $89 immediately after reporting.

So do we think LeMaitre is an attractive buy at the current price? 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.

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