Electronic equipment provider Vontier (NYSE: VNT) beat Wall Street’s revenue expectations in Q4 CY2025, with sales up 4.1% year on year to $808.5 million. Revenue guidance for the full year exceeded analysts’ estimates, but next quarter’s guidance of $735 million was less impressive, coming in 2.1% below expectations. Its non-GAAP profit of $0.86 per share was in line with analysts’ consensus estimates.

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“Vontier delivered a strong finish to the year, marked by attractive topline performance and adjusted earnings per share growth of 11 percent on a full year basis,” said Mark Morelli, President and Chief Executive Officer.

Company Overview

A spin-off of a spin-off, Vontier (NYSE: VNT) provides electronic products and systems to the transportation, automotive, and manufacturing sectors.

Revenue Growth

Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can have short-term success, but a top-tier one grows for years. Regrettably, Vontier’s sales grew at a sluggish 2.6% compounded annual growth rate over the last five years. This fell short of our benchmarks and is a rough starting point for our analysis.

Long-term growth is the most important, but within industrials, a half-decade historical view may miss new industry trends or demand cycles. Vontier’s recent performance shows its demand has slowed as its revenue was flat over the last two years.

We can better understand 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, Vontier’s organic revenue averaged 2.8% year-on-year growth. Because this number is better than its two-year revenue growth, we can see that some mixture of divestitures and foreign exchange rates dampened its headline results.

This quarter, Vontier reported modest year-on-year revenue growth of 4.1% but beat Wall Street’s estimates by 5.7%. Company management is currently guiding for flat sales next quarter.

Looking further ahead, sell-side analysts expect revenue to remain flat over the next 12 months. This projection is underwhelming and suggests its newer products and services will not accelerate its top-line performance yet.

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Operating Margin

Vontier 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 18.3%. This result isn’t surprising as its high gross margin gives it a favorable starting point.

Looking at the trend in its profitability, Vontier’s operating margin decreased by 1.2 percentage points over the last five years. This raises questions about the company’s expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability.

In Q4, Vontier generated an operating margin profit margin of 18.9%, in line with the same quarter last year. This indicates the company’s cost structure has recently been stable.

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.

Vontier’s flat EPS over the last five years was below its 2.6% annualized revenue growth. This tells us the company became less profitable on a per-share basis as it expanded due to non-fundamental factors such as interest expenses and taxes.

We can take a deeper look into Vontier’s earnings to better understand the drivers of its performance. As we mentioned earlier, Vontier’s operating margin was flat this quarter but declined by 1.2 percentage points over the last five years. This was the most relevant factor (aside from the revenue impact) behind its lower earnings; interest expenses and taxes 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 Vontier, its two-year annual EPS growth of 5.4% was higher than its five-year trend. Accelerating earnings growth is almost always an encouraging data point.

In Q4, Vontier reported adjusted EPS of $0.86, up from $0.80 in the same quarter last year. This print beat analysts’ estimates by 1.1%. Over the next 12 months, Wall Street expects Vontier’s full-year EPS of $3.20 to grow 6.4%.

Key Takeaways from Vontier’s Q4 Results

We were impressed by how significantly Vontier blew past analysts’ organic revenue expectations this quarter. We were also excited its revenue outperformed Wall Street’s estimates by a wide margin. On the other hand, its revenue guidance for next quarter missed and its EPS guidance for next quarter fell short of Wall Street’s estimates. Overall, this print was mixed but still had some key positives. The stock traded up 8.1% to $42 immediately following the results.

Sure, Vontier had a solid quarter, but if we look at the bigger picture, is this stock a buy? When making that decision, it’s important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here (it’s free).