Artivion (AORT)

Medical device company Artivion (NYSE:AORT) reported Q3 CY2025 results topping the market’s revenue expectations, with sales up 18.4% year on year to $113.4 million. The company’s full-year revenue guidance of $442 million at the midpoint came in 0.9% above analysts’ estimates. Its non-GAAP profit of $0.16 per share was in line with analysts’ consensus estimates.

Company Overview

Formerly known as CryoLife until its 2022 rebranding, Artivion (NYSE:AORT) develops and manufactures medical devices and preserves human tissues used in cardiac and vascular surgical procedures for patients with aortic disease.

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.

Artivion competes with several major medical device companies across its product lines. In mechanical heart valves, its main competitors include Abbott Laboratories, Medtronic, and Corcym. For aortic stent grafts, it competes with Medtronic, Gore, Terumo, Cook, and BD. In the surgical sealants market, Artivion faces competition from Baxter, Ethicon, and Integra LifeSciences.

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 $422.6 million in revenue over the past 12 months, Artivion 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.

A company’s long-term sales performance can indicate its overall quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. Over the last five years, Artivion grew its sales at a decent 10.6% compounded annual growth rate. Its growth was slightly above the average healthcare company and shows its offerings resonate with customers.

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. Artivion’s annualized revenue growth of 11.5% over the last two years aligns with its five-year trend, suggesting its demand was stable.

This quarter, Artivion reported year-on-year revenue growth of 18.4%, and its $113.4 million of revenue exceeded Wall Street’s estimates by 2.6%.

Looking ahead, sell-side analysts expect revenue to grow 12.4% over the next 12 months, similar to its two-year rate. This projection is admirable and indicates the market is baking in success for its products and services.

Operating margin is an important measure of profitability as it shows the portion of revenue left after accounting for all core expenses – everything from the cost of goods sold to advertising and wages. It’s also useful for comparing profitability across companies with different levels of debt and tax rates because it excludes interest and taxes.

Artivion’s operating margin might fluctuated slightly over the last 12 months but has generally stayed the same, averaging 4.8% over the last five years. This profitability was paltry for a healthcare business and caused by its suboptimal cost structure.

Analyzing the trend in its profitability, Artivion’s operating margin of 6.1% for the trailing 12 months may be around the same as five years ago, but it has increased by 4.1 percentage points over the last two years.

This quarter, Artivion generated an operating margin profit margin of 11.1%, up 6.5 percentage points year on year. This increase was a welcome development and shows it was more efficient.

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.

Artivion’s EPS grew at an astounding 23.8% compounded annual growth rate over the last five years, higher than its 10.6% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.

In Q3, Artivion reported adjusted EPS of $0.16, up from $0.12 in the same quarter last year. This print beat analysts’ estimates by 5.3%. Over the next 12 months, Wall Street expects Artivion’s full-year EPS of $0.46 to grow 60.3%.

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.

Artivion broke even from a free cash flow perspective over the last five years, giving the company limited opportunities to return capital to shareholders.

Taking a step back, an encouraging sign is that Artivion’s margin expanded by 7.8 percentage points during that time. The company’s improvement shows it’s heading in the right direction, and we can see it became a less capital-intensive business because its free cash flow profitability rose while its operating profitability was flat.

Artivion’s free cash flow clocked in at $17.65 million in Q3, equivalent to a 15.6% margin. This result was good as its margin was 7.4 percentage points higher than in the same quarter last year, building on its favorable historical trend.

EPS and free cash flow tell us whether a company was profitable while growing its revenue. But was it capital-efficient? Enter ROIC, a metric showing how much operating profit a company generates relative to the money it has raised (debt and equity).

Artivion historically did a mediocre job investing in profitable growth initiatives. Its five-year average ROIC was 2.4%, 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. Over the last few years, Artivion’s ROIC averaged 4.1 percentage point increases each year. This is a good sign, and we hope the company can continue improving.

Artivion reported $73.43 million of cash and $259.1 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 $84.49 million of EBITDA over the last 12 months, we view Artivion’s 2.2× net-debt-to-EBITDA ratio as safe. We also see its $18.23 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 enjoyed seeing Artivion beat analysts’ revenue expectations this quarter. We were also glad its full-year revenue guidance slightly exceeded Wall Street’s estimates. Overall, this print had some key positives. The stock remained flat at $47.50 immediately after reporting.

Updated: December 3, 2025 at 11:04 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.

Artivion isn’t a terrible business, but it doesn’t pass our bar. Although its revenue growth was good over the last five years and is expected to accelerate over the next 12 months, its subscale operations give it fewer distribution channels than its larger rivals. And while the company’s rising cash profitability gives it more optionality, the downside is its relatively low ROIC suggests management has struggled to find compelling investment opportunities.

Artivion’s P/E ratio based on the next 12 months is 59.8x. This multiple tells us a lot of good news is priced in - we think there are better stocks to buy right now.

Wall Street analysts have a consensus one-year price target of $51.71 on the company (compared to the current share price of $45.47).