Enovis Corporation’s first quarter results prompted a negative market reaction, as investors weighed both solid top-line growth and concerns about margin pressures. Management attributed the quarter’s revenue gains to strong performance in the Reconstruction (Recon) segment—particularly in U.S. extremities and international markets—along with healthy contributions from Prevention & Recovery (P&R) products. CEO Matthew Trerotola highlighted the impact of recent product launches, noting that the company delivered “well above market rates in the U.S.” and benefited from expanding its global position. However, ongoing investments in research and supply chain adjustments, as well as the effects of new tariffs, weighed on operating margins.
Is now the time to buy ENOV? Find out in our full research report (it’s free).
Enovis (ENOV) Q1 CY2025 Highlights:
- Revenue: $558.8 million vs analyst estimates of $558.9 million (8.3% year-on-year growth, in line)
- Adjusted EPS: $0.81 vs analyst estimates of $0.74 (8.9% beat)
- Adjusted EBITDA: $99.2 million vs analyst estimates of $98.78 million (17.8% margin, in line)
- The company lifted its revenue guidance for the full year to $2.24 billion at the midpoint from $2.21 billion, a 1.4% increase
- Management lowered its full-year Adjusted EPS guidance to $3.03 at the midpoint, a 4.7% decrease
- EBITDA guidance for the full year is $390 million at the midpoint, below analyst estimates of $409 million
- Operating Margin: -8.4%, down from -6.8% in the same quarter last year
- Organic Revenue rose 9.1% year on year (4.8% in the same quarter last year)
- Market Capitalization: $1.84 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions Enovis’s Q1 Earnings Call
- Vik Chopra (Wells Fargo) asked about which tariff mitigation actions would be most durable, with CEO Matthew Trerotola pointing to shifting sourcing out of China as the most sustainable approach.
- Vijay Kumar (Evercore ISI) questioned if strong gross margin gains were sustainable. CFO Ben Berry responded that favorable business mix and new products were key, with only temporary headwinds expected from tariffs.
- Robert Marcus (JPMorgan) inquired about free cash flow progression and leverage, with Berry noting seasonality and confirming expectations for improved cash flow and leverage in the 3-3.5x range by year-end.
- Young Li (Jefferies) sought clarification on why the P&R growth outlook remained conservative despite a strong start. Trerotola explained that the segment faces the greatest tariff impact and diverse end-market risks, warranting a cautious full-year approach.
- Russell Yuen (William Blair) asked about pricing trends under inflation and tariff scenarios, with Trerotola highlighting a stable pricing environment in P&R but some downward pressure in Recon, partially offset by richer product mix.
Catalysts in Upcoming Quarters
In the quarters ahead, the StockStory team will be watching (1) the rate and effectiveness of Enovis’s tariff mitigation and supply chain diversification, (2) the commercial uptake and surgeon adoption of newly launched Recon and P&R products, and (3) the company’s ability to sustain gross margin improvements despite ongoing cost pressures. Execution on integration synergies and cash flow conversion will also be important indicators of operational progress.
Enovis currently trades at $32.26, down from $34.14 just before the earnings. In the wake of this quarter, is it a buy or sell? Find out in our full research report (it’s free).
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