Manufacturing company Dover (NYSE: DOV) announced better-than-expected revenue in Q4 CY2025, with sales up 8.8% year on year to $2.10 billion. Its non-GAAP profit of $2.51 per share was 1% above analysts’ consensus estimates.

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Dover's President and Chief Executive Officer, Richard J. Tobin, said, "Our fourth quarter results reflect broad-based top line strength across the portfolio, with organic growth reaching its highest level of the year. Revenue performance was driven by robust trends in our secular-growth-exposed markets as well as improving conditions in retail fueling and refrigerated door cases and services. Our sustained strong bookings rates continue to support underlying momentum across the portfolio, providing confidence in the durability of demand as we enter the new year.

Company Overview

A company that manufactured critical equipment for the United States military during World War II, Dover (NYSE: DOV) manufactures engineered components and specialized equipment for numerous industries.

Revenue Growth

A company’s long-term performance is an indicator of its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Regrettably, Dover’s sales grew at a sluggish 3.9% compounded annual growth rate over the last five years. This fell short of our benchmark for the industrials sector and is a tough 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. Dover’s recent performance shows its demand has slowed as its annualized revenue growth of 2.6% over the last two years was below its five-year trend.

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, Dover’s organic revenue was flat. Because this number is lower than its two-year revenue growth, we can see that some mixture of acquisitions and foreign exchange rates boosted its headline results.

This quarter, Dover reported year-on-year revenue growth of 8.8%, and its $2.10 billion of revenue exceeded Wall Street’s estimates by 0.9%.

Looking ahead, sell-side analysts expect revenue to grow 5.6% over the next 12 months. While this projection indicates its newer products and services will fuel better top-line performance, it is still below average for the sector.

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Operating Margin

Operating margin is a key measure of profitability. Think of it as net income - the bottom line - excluding the impact of taxes and interest on debt, which are less connected to business fundamentals.

Dover’s operating margin has risen over the last 12 months and averaged 16.2% over the last five years. On top of that, its profitability was elite for an industrials business thanks to its efficient cost structure and economies of scale. This result isn’t surprising as its high gross margin gives it a favorable starting point.

Looking at the trend in its profitability, Dover’s operating margin might fluctuated slightly but has generally stayed the same 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, Dover generated an operating margin profit margin of 16.5%, up 1.2 percentage points year on year. The increase was encouraging, 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

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

Dover’s EPS grew at a solid 11.1% compounded annual growth rate over the last five years, higher than its 3.9% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.

We can take a deeper look into Dover’s earnings quality to better understand the drivers of its performance. A five-year view shows that Dover has repurchased its stock, shrinking its share count by 5.9%. This tells us its EPS outperformed its revenue not because of increased operational efficiency but financial engineering, as buybacks boost per share earnings.

Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business.

For Dover, its two-year annual EPS growth of 4.6% was lower than its five-year trend. We hope its growth can accelerate in the future.

In Q4, Dover reported adjusted EPS of $2.51, up from $2.20 in the same quarter last year. This print was close to analysts’ estimates. Over the next 12 months, Wall Street expects Dover’s full-year EPS of $9.62 to grow 10.6%.

Key Takeaways from Dover’s Q4 Results

We were impressed by how significantly Dover blew past analysts’ EBITDA expectations this quarter. We were also happy its organic revenue narrowly outperformed Wall Street’s estimates. On the other hand, its full-year EPS guidance slightly missed. Overall, this print had some key positives. The stock remained flat at $205.93 immediately following the results.

Should you buy the stock or not? 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).