ICU Medical (ICUI)

Medical device company ICU Medical (NASDAQ:ICUI) reported Q4 CY2025 results exceeding the market’s revenue expectations, but sales fell by 13% year on year to $540.7 million. Its non-GAAP profit of $1.91 per share was 12.8% above analysts’ consensus estimates.

Company Overview

Founded in 1984 and named for its initial focus on intensive care units, ICU Medical (NASDAQ:ICUI) develops and manufactures medical products for infusion therapy, vascular access, and vital care applications used in hospitals and other healthcare settings.

The medical devices and supplies industry, particularly in the fields of cardiology, neurology, and vascular care, benefits from a business model that balances innovation with relatively predictable revenue streams. These companies focus on developing life-saving devices such as stents, pacemakers, neurostimulation implants, and vascular access tools, which address critical and often chronic conditions. The recurring need for these devices, coupled with growing global demand for advanced treatments, provides stability and opportunities for long-term growth. However, the industry faces hurdles such as high research and development costs, rigorous regulatory approval processes, and reliance on reimbursement from healthcare systems, which can exert downward pressure on pricing. Looking ahead, the industry is positioned to benefit from tailwinds such as aging populations (which tend to have higher rates of disease) and technological advancements like minimally invasive procedures and connected devices that improve patient monitoring and outcomes. Innovations in robotic-assisted surgery and AI-driven diagnostics are also expected to accelerate adoption and expand treatment capabilities. However, potential headwinds include pricing pressures stemming from value-based care models and continued complexity changing from navigating regulatory frameworks that may prioritize further lowering healthcare costs.

ICU Medical's primary competitors include Becton Dickinson (NYSE:BDX), Baxter International (NYSE:BAX), and B. Braun Medical in the consumables and infusion systems markets. In the vital care segment, the company competes with Edwards Lifesciences (NYSE:EW) and Fresenius (ETR:FRE).

Larger companies benefit from economies of scale, where fixed costs like infrastructure, technology, and administration are spread over a higher volume of goods or services, reducing the cost per unit. Scale can also lead to bargaining power with suppliers, greater brand recognition, and more investment firepower. A virtuous cycle can ensue if a scaled company plays its cards right.

With just $2.22 billion in revenue over the past 12 months, ICU Medical lacks scale in an industry where it matters. This makes it difficult to build trust with customers because healthcare is heavily regulated, complex, and resource-intensive.

A company’s long-term sales performance is one signal of its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Thankfully, ICU Medical’s 12.4% annualized revenue growth over the last five years was solid. Its growth beat the average healthcare company and shows its offerings resonate with customers.

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

This quarter, ICU Medical’s revenue fell by 13% year on year to $540.7 million but beat Wall Street’s estimates by 1.9%.

Looking ahead, sell-side analysts expect revenue to decline by 3.4% over the next 12 months, a deceleration versus the last two years. This projection doesn't excite us and suggests its products and services will face some demand challenges.

Operating margin is one of the best measures of profitability because it tells us how much money a company takes home after subtracting all core expenses, like marketing and R&D.

ICU Medical was profitable over the last five years but held back by its large cost base. Its average operating margin of 2.9% was weak for a healthcare business.

Analyzing the trend in its profitability, ICU Medical’s operating margin decreased by 5.6 percentage points over the last five years, but it rose by 2.7 percentage points on a two-year basis. Still, shareholders will want to see ICU Medical become more profitable in the future.

This quarter, ICU Medical generated an operating margin profit margin of 1%, down 6.4 percentage points year on year. This contraction shows it was less efficient because its expenses increased relative to its revenue.

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.

ICU Medical’s EPS grew at an unimpressive 1.7% compounded annual growth rate over the last five years, lower than its 12.4% annualized revenue growth. This tells us the company became less profitable on a per-share basis as it expanded.

We can take a deeper look into ICU Medical’s earnings to better understand the drivers of its performance. As we mentioned earlier, ICU Medical’s operating margin declined by 5.6 percentage points over the last five years. Its share count also grew by 14.2%, meaning the company not only became less efficient with its operating expenses but also diluted its shareholders.

In Q4, ICU Medical reported adjusted EPS of $1.91, down from $2.11 in the same quarter last year. Despite falling year on year, this print easily cleared analysts’ estimates. Over the next 12 months, Wall Street expects ICU Medical’s full-year EPS of $7.76 to grow 2.4%.

Free cash flow isn't a prominently featured metric in company financials and earnings releases, but we think it's telling because it accounts for all operating and capital expenses, making it tough to manipulate. Cash is king.

ICU Medical has shown mediocre cash profitability over the last five years, giving the company limited opportunities to return capital to shareholders. Its free cash flow margin averaged 3.4%, subpar for a healthcare business.

Taking a step back, we can see that ICU Medical’s margin dropped by 11.4 percentage points during that time. This along with its unexciting margin put the company in a tough spot, and shareholders are likely hoping it can reverse course. If the trend continues, it could signal it’s becoming a more capital-intensive business.

ICU Medical’s free cash flow clocked in at $35.95 million in Q4, equivalent to a 6.6% margin. This result was good as its margin was 4.1 percentage points higher than in the same quarter last year, but we wouldn’t put too much weight on the short term because investment needs can be seasonal, causing temporary swings. Long-term trends carry greater meaning.

EPS and free cash flow tell us whether a company was profitable while growing its revenue. But was it capital-efficient? A company’s ROIC explains this by showing how much operating profit it makes compared to the money it has raised (debt and equity).

ICU Medical historically did a mediocre job investing in profitable growth initiatives. Its five-year average ROIC was 1.9%, lower than the typical cost of capital (how much it costs to raise money) for healthcare companies.

We like to invest in businesses with high returns, but the trend in a company’s ROIC is what often surprises the market and moves the stock price. Unfortunately, ICU Medical’s ROIC averaged 1.2 percentage point decreases each year over the last few years. Paired with its already low returns, these declines suggest its profitable growth opportunities are few and far between.

ICU Medical reported $308 million of cash and $1.28 billion of debt on its balance sheet in the most recent quarter. As investors in high-quality companies, we primarily focus on two things: 1) that a company’s debt level isn’t too high and 2) that its interest payments are not excessively burdening the business.

With $403.8 million of EBITDA over the last 12 months, we view ICU Medical’s 2.4× net-debt-to-EBITDA ratio as safe. We also see its $83.03 million of annual interest expenses as appropriate. The company’s profits give it plenty of breathing room, allowing it to continue investing in growth initiatives.

It was good to see ICU Medical beat analysts’ EPS expectations this quarter. We were also happy its revenue outperformed Wall Street’s estimates. Overall, this print had some key positives. The stock remained flat at $149.95 immediately following the results.

Updated: February 19, 2026 at 10:34 PM EST

Are you wondering whether to buy ICU Medical or pass? We urge investors to not only consider the latest earnings results but also longer-term business quality and valuation as well.

ICU Medical isn’t a terrible business, but it doesn’t pass our quality test. Although its revenue growth was solid over the last five years, it’s expected to deteriorate over the next 12 months and its cash profitability fell over the last five years. And while the company’s operating margins are in line with the overall healthcare sector, the downside is its relatively low ROIC suggests management has struggled to find compelling investment opportunities.

ICU Medical’s P/E ratio based on the next 12 months is 18.9x. Investors with a higher risk tolerance might like the company, but we think the potential downside is too great. We're fairly confident there are better stocks to buy right now.

Wall Street analysts have a consensus one-year price target of $181.83 on the company (compared to the current share price of $149.95).

Although the price target is bullish, readers should exercise caution because analysts tend to be overly optimistic. The firms they work for, often big banks, have relationships with companies that extend into fundraising, M&A advisory, and other rewarding business lines. As a result, they typically hesitate to say bad things for fear they will lose out. We at StockStory do not suffer from such conflicts of interest, so we’ll always tell it like it is.