Diversified science and expertise firm Danaher 
DHR met Wall Streets income expectations in Q4 CY2025, with gross sales up 4.6% yr on yr to $6.84 billion. Its non-GAAP revenue of $2.23 per share was 1.8% above analysts’ consensus estimates.
Danaher (DHR) Q4 CY2025 Highlights:
- Revenue: $6.84 billion vs analyst estimates of $6.81 billion (4.6% year-on-year development, in line)
- Adjusted EPS: $2.23 vs analyst estimates of $2.19 (1.8% beat)
- Adjusted EPS steering for the upcoming monetary yr 2026 is $8.43 on the midpoint, in keeping with analyst estimates
- Operating Margin: 22%, in keeping with the identical quarter final yr
- Free Cash Flow Margin: 25.5%, up from 23% in the identical quarter final yr
- Organic Revenue rose 2.5% yr on yr (beat)
- Market Capitalization: $166.5 billion
Rainer M. Blair, President and Chief Executive Officer, said, “We delivered a strong finish to the year with better-than-expected performance across our portfolio. We were particularly encouraged by continued strength in our bioprocessing business, along with improved momentum in Diagnostics and Life Sciences. Our teams’ disciplined execution also enabled us to exceed our fourth quarter margin, earnings, and cash flow expectations.”
Company Overview
Born from an actual property funding belief that reworked into a producing powerhouse, Danaher DHR is a world science and expertise firm that gives specialised gear, software program, and providers for biotechnology, life sciences, and diagnostics.
Revenue Growth
An organization’s long-term efficiency is an indicator of its general high quality. Any enterprise can have short-term success, however a top-tier one grows for years. Unfortunately, Danaher’s 2% annualized income development during the last 5 years was tepid. This was beneath our requirements and is a tough place to begin for our evaluation.
Long-term development is a very powerful, however inside healthcare, a half-decade historic view might miss new improvements or demand cycles. Danaher’s annualized income development of 1.4% during the last two years aligns with its five-year pattern, suggesting its demand was constantly weak.
Danaher additionally stories natural income, which strips out one-time occasions like acquisitions and foreign money fluctuations that don’t precisely replicate its fundamentals. Over the final two years, Danaher’s natural income was flat. Because this quantity aligns with its two-year income development, we are able to see the corporate’s core operations (not acquisitions and divestitures) drove most of its outcomes.
This quarter, Danaher grew its income by 4.6% yr on yr, and its $6.84 billion of income was in keeping with Wall Street’s estimates.
Looking forward, sell-side analysts count on income to develop 3.8% over the following 12 months. While this projection suggests its newer services and products will catalyze higher top-line efficiency, it’s nonetheless beneath common for the sector.
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Operating Margin
Danaher has been an environment friendly firm during the last 5 years. It was one of many extra worthwhile companies within the healthcare sector, boasting a median working margin of 24.7%.
Looking on the pattern in its profitability, Danaher’s working margin decreased by 11 share factors during the last 5 years. The firm’s two-year trajectory additionally reveals it did not get its profitability again to the height as its margin fell by 3.7 share factors. This efficiency was poor irrespective of the way you have a look at it – it reveals its bills had been rising and it couldn’t cross these prices onto its prospects.
This quarter, Danaher generated an working margin revenue margin of twenty-two%, in keeping with the identical quarter final yr. This signifies the corporate’s general price construction has been comparatively steady.
Earnings Per Share
Revenue tendencies clarify an organization’s historic development, however the long-term change in earnings per share (EPS) factors to the profitability of that development – for instance, an organization may inflate its gross sales by means of extreme spending on promoting and promotions.
Danaher’s EPS grew at an unimpressive 4.4% compounded annual development fee during the last 5 years. This efficiency was higher than its flat income however doesn’t inform us a lot about its enterprise high quality as a result of its working margin didn’t enhance.
Diving into the nuances of Danaher’s earnings may give us a greater understanding of its efficiency. A five-year view reveals that Danaher has repurchased its inventory, shrinking its share rely by 1.9%. This tells us its EPS outperformed its income not due to elevated operational effectivity however monetary engineering, as buybacks increase per share earnings.
In Q4, Danaher reported adjusted EPS of $2.23, up from $2.14 in the identical quarter final yr. This print beat analysts’ estimates by 1.8%. Over the following 12 months, Wall Street expects Danaher’s full-year EPS of $7.80 to develop 8.1%.
Key Takeaways from Danaher’s Q4 Results
Danaher roughly met analysts’ natural income expectations this quarter, resulting in in line income. EPS beat barely. Zooming out, we predict this was a advantageous quarter with out too many surprises good or dangerous. The inventory remained flat at $238 instantly following the outcomes.
So do we predict Danaher is a gorgeous purchase on the present value? The newest quarter does matter, however not practically as a lot as longer-term fundamentals and valuation, when deciding if the inventory is a purchase. We cover that in our actionable full research report which you can read here (it’s free).