Lantheus (LNTH)

Radiopharmaceutical company Lantheus Holdings (NASDAQ:LNTH) beat Wall Street’s revenue expectations in Q3 CY2025, with sales up 1.4% year on year to $384 million. The company’s full-year revenue guidance of $1.5 billion at the midpoint came in 1.1% above analysts’ estimates. Its non-GAAP profit of $1.27 per share was in line with analysts’ consensus estimates.

Company Overview

Pioneering the "Find, Fight and Follow" approach to disease management, Lantheus Holdings (NASDAQGM:LNTH) develops and commercializes radiopharmaceuticals and other imaging agents that help healthcare professionals detect, diagnose, and treat diseases.

The medical devices and supplies industry, particularly those specializing in imaging and diagnostics, operates with a comparatively stable yet capital-intensive business model. Companies in this space benefit from consistent demand driven by the essential nature of diagnostic tools in patient care, as well as recurring revenue streams from consumables, service contracts, and equipment maintenance. However, the industry faces challenges such as significant upfront development costs, stringent regulatory requirements, and pricing pressures from hospitals and healthcare systems, which are increasingly focused on cost containment. Looking ahead, the industry should enjoy tailwinds from advancements in technology, including the integration of artificial intelligence to enhance diagnostic accuracy and workflow efficiency, as well as rising demand for imaging solutions driven by aging populations. On the other hand, headwinds could arise from a rethinking of healthcare costs potentially resulting in reimbursement cuts and slower capital equipment purchasing. Additionally, cybersecurity concerns surrounding connected medical devices could introduce new risks and complexities for manufacturers.

Lantheus Holdings competes with several companies in the radiopharmaceutical and medical imaging space. In the PSMA-PET imaging market, its competitors include Telix Pharmaceuticals, Novartis AG, and Blue Earth Diagnostics (a Bracco subsidiary). For its DEFINITY ultrasound enhancing agent, Lantheus competes with GE Healthcare and Bracco. In the SPECT radiopharmaceutical market, competitors include Curium, GE Healthcare, Bracco, Jubilant Life Sciences, and potentially BWXT Medical.

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 $1.53 billion in revenue over the past 12 months, Lantheus is a small company in an industry where scale matters. This makes it difficult to build trust with customers because healthcare is heavily regulated, complex, and resource-intensive. On the bright side, Lantheus’s smaller revenue base allows it to grow faster if it can execute well.

A company’s long-term performance is an indicator of its overall quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Luckily, Lantheus’s sales grew at an incredible 35.5% compounded annual growth rate over the last five years. Its growth beat the average healthcare company and shows its offerings resonate with customers, a helpful starting point for our analysis.

We at StockStory place the most emphasis on long-term growth, but within healthcare, a half-decade historical view may miss recent innovations or disruptive industry trends. Lantheus’s annualized revenue growth of 12.5% over the last two years is below its five-year trend, but we still think the results suggest healthy demand.

This quarter, Lantheus reported modest year-on-year revenue growth of 1.4% but beat Wall Street’s estimates by 5.2%.

Looking ahead, sell-side analysts expect revenue to decline by 5.2% over the next 12 months, a deceleration versus the last two years. This projection is underwhelming and implies its products and services will face some demand challenges. At least the company is tracking well in other measures of financial health.

Lantheus has managed its cost base well over the last five years. It demonstrated solid profitability for a healthcare business, producing an average operating margin of 19%.

Analyzing the trend in its profitability, Lantheus’s operating margin rose by 29.4 percentage points over the last five years, as its sales growth gave it immense operating leverage. Zooming in on its more recent performance, we can see the company’s trajectory is intact as its margin has also increased by 18.2 percentage points on a two-year basis. These data points are very encouraging and show momentum is on its side.

This quarter, Lantheus generated an operating margin profit margin of 11.4%, down 24 percentage points year on year. This contraction shows it was less efficient because its expenses grew faster than its revenue.

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.

Lantheus’s EPS grew at an astounding 48.1% compounded annual growth rate over the last five years, higher than its 35.5% 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 Lantheus’s earnings to better understand the drivers of its performance. As we mentioned earlier, Lantheus’s operating margin declined this quarter but expanded by 29.4 percentage points over the last five years. This was the most relevant factor (aside from the revenue impact) behind its higher earnings; interest expenses and taxes can also affect EPS but don’t tell us as much about a company’s fundamentals.

In Q3, Lantheus reported adjusted EPS of $1.27, down from $1.70 in the same quarter last year. This print was close to analysts’ estimates. Over the next 12 months, Wall Street expects Lantheus’s full-year EPS of $5.96 to shrink by 16.2%.

Although earnings are undoubtedly valuable for assessing company performance, we believe cash is king because you can’t use accounting profits to pay the bills.

Lantheus has shown robust cash profitability, giving it an edge over its competitors and the ability to reinvest or return capital to investors. The company’s free cash flow margin averaged 24.5% over the last five years, quite impressive for a healthcare business.

Taking a step back, we can see that Lantheus’s margin expanded by 19.6 percentage points during that time. This is encouraging because it gives the company more optionality.

Lantheus’s free cash flow clocked in at $94.67 million in Q3, equivalent to a 24.7% margin. The company’s cash profitability regressed as it was 17.4 percentage points lower than in the same quarter last year, but we wouldn’t read too much into the short term because investment needs can be seasonal, leading to 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).

Lantheus’s five-year average ROIC was 11.6%, higher than most healthcare businesses. This illustrates its management team’s ability to invest in profitable growth opportunities and generate value for shareholders.

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. Over the last few years, Lantheus’s ROIC has increased. This is a great sign when paired with its already strong returns, but we also recognize its lack of profitable growth during the COVID era was the primary reason for the change.

Lantheus reported $382 million of cash and $568.8 million 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 $547 million of EBITDA over the last 12 months, we view Lantheus’s 0.3× net-debt-to-EBITDA ratio as safe. We also see its $16.44 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.

We were impressed by how significantly Lantheus blew past analysts’ revenue expectations this quarter. We were also glad its full-year revenue guidance slightly exceeded Wall Street’s estimates. On the other hand, its full-year EPS guidance slightly missed. Overall, this print had some key positives. The stock traded up 7.5% to $61.50 immediately following the results.

Updated: December 4, 2025 at 10:49 PM EST

A common mistake we notice when investors are deciding whether to buy a stock or not is that they simply look at the latest earnings results. Business quality and valuation matter more, so we urge you to understand these dynamics as well.

We think Lantheus is a solid business. To kick things off, its revenue growth was exceptional over the last five years. And while its subscale operations give it fewer distribution channels than its larger rivals, its impressive operating margins show it has a highly efficient business model. On top of that, its rising cash profitability gives it more optionality.

Lantheus’s P/E ratio based on the next 12 months is 11.8x. Looking at the healthcare space right now, Lantheus trades at a compelling valuation. If you’re a fan of the business and management team, now is a good time to scoop up some shares.

Wall Street analysts have a consensus one-year price target of $80.93 on the company (compared to the current share price of $61.93), implying they see 30.7% upside in buying Lantheus in the short term.