NVST Stock Up on Q4 Earnings and Revenue Beat, Operating Margin Crashes

Core Insights - Envista Holdings Corporation (NVST) reported a fourth-quarter 2024 adjusted earnings per share (EPS) of 24 cents, reflecting a 17.2% decline year over year, but exceeded the Zacks Consensus Estimate by 4.3% [1][2] - The company's full-year adjusted EPS was 73 cents, down 52.3% from 2023 [2] - Following the earnings announcement, NVST shares increased by 5.9% [2] Revenue Performance - NVST's revenues for the fourth quarter totaled $652.9 million, marking a 1.1% increase year over year and surpassing the Zacks Consensus Estimate by 1.1% [3] - Full-year revenues reached $2.51 billion, down 2.2% from the previous year [3] Segment Analysis - In Q4, revenues from the Specialty Products & Technologies segment were $410.9 million, down 1.2% year over year [4] - The Equipment & Consumables segment saw a revenue increase of 5.3% year over year, totaling $242 million [4] Operational Metrics - Gross profit for the quarter rose 10.8% year over year to $372.5 million, with a gross margin expansion of 498 basis points to 57.1% due to a 9.4% decline in cost of sales [5] - Selling, general and administrative expenses increased by 15.2% year over year to $299.7 million, while research and development expenses rose 32.2% to $26.7 million [5] - Operating profit fell 17.4% year over year to $46.1 million, with the operating margin contracting by 158 basis points to 7.1% [5] Financial Position - At the end of Q4 2024, NVST had cash and cash equivalents of $1.07 billion, up from $940 million at the end of 2023 [6] - Long-term debt decreased to $1.28 billion from $1.40 billion in the same period of 2023 [6] - Year-to-date net cash provided by operating activities was $336.5 million, compared to $275.7 million a year ago [6] Future Guidance - For 2025, NVST expects core sales growth between 1% to 3% and adjusted EBITDA margins around 14% [7] - The Zacks Consensus Estimate for 2025 revenues is $2.56 billion, indicating a 2.1% increase from the previous year [7] - Adjusted EPS for 2025 is anticipated to be in the range of $0.95 to $1.05, with the Zacks Consensus Estimate at $1.10 [8] Overall Assessment - NVST's fourth-quarter results were better than expected, with earnings and revenues exceeding estimates [9] - Positive growth was noted across both implant portfolios, although the Specialty Products & Technologies segment experienced a sales decline due to external factors [10]