Biotechnology company United Therapeutics (NASDAQ: UTHR) missed Wall Street’s revenue expectations in Q4 CY2025, but sales rose 7.4% year on year to $790.2 million. Its GAAP profit of $7.70 per share was 14% above analysts’ consensus estimates.
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United Therapeutics (UTHR) Q4 CY2025 Highlights:
- Revenue: $790.2 million vs analyst estimates of $810.4 million (7.4% year-on-year growth, 2.5% miss)
- EPS (GAAP): $7.70 vs analyst estimates of $6.76 (14% beat)
- Operating Margin: 45.1%, down from 48.6% in the same quarter last year
- Market Capitalization: $20.38 billion
Company Overview
Founded by a mother seeking treatment for her daughter's pulmonary arterial hypertension, United Therapeutics (NASDAQ: UTHR) develops and commercializes medications for chronic lung diseases and other life-threatening conditions, with a focus on pulmonary hypertension treatments.
Revenue Growth
A company’s long-term performance is an indicator of its overall quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Thankfully, United Therapeutics’s 16.5% annualized revenue growth over the last five years was solid. Its growth surpassed the average healthcare company and shows its offerings resonate with customers, a great starting point for our analysis.
Long-term growth is the most important, but within healthcare, a half-decade historical view may miss new innovations or demand cycles. United Therapeutics’s annualized revenue growth of 16.9% over the last two years aligns with its five-year trend, suggesting its demand was predictably strong. 
This quarter, United Therapeutics’s revenue grew by 7.4% year on year to $790.2 million, missing Wall Street’s estimates.
Looking ahead, sell-side analysts expect revenue to remain flat over the next 12 months, a deceleration versus the last two years. This projection doesn't excite us and implies its products and services will face some demand challenges. At least the company is tracking well in other measures of financial health.
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Operating Margin
United Therapeutics has been a well-oiled machine over the last five years. It demonstrated elite profitability for a healthcare business, boasting an average operating margin of 46.5%.
Analyzing the trend in its profitability, United Therapeutics’s operating margin rose by 13.9 percentage points over the last five years, as its sales growth gave it operating leverage. Zooming into its more recent performance, however, we can see the company’s margin has decreased by 4 percentage points on a two-year basis. Given its business quality, we’re optimistic that United Therapeutics can correct course and return to expansion.
In Q4, United Therapeutics generated an operating margin profit margin of 45.1%, down 3.5 percentage points year on year. This contraction shows it was less efficient because its expenses grew faster than its revenue.
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.
United Therapeutics’s EPS grew at an astounding 19.3% compounded annual growth rate over the last five years, higher than its 16.5% 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 United Therapeutics’s earnings quality to better understand the drivers of its performance. As we mentioned earlier, United Therapeutics’s operating margin declined this quarter but expanded by 13.9 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 Q4, United Therapeutics reported EPS of $7.70, up from $6.19 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects United Therapeutics’s full-year EPS of $27.90 to grow 3.7%.
Key Takeaways from United Therapeutics’s Q4 Results
It was good to see United Therapeutics beat analysts’ EPS expectations this quarter. On the other hand, its revenue missed. Overall, this was a weaker quarter. The stock traded down 3.9% to $454.81 immediately after reporting.
United Therapeutics didn’t show it’s best hand this quarter, but does that create an opportunity to buy the stock right now? What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here (it’s free).
