Medical device company LeMaitre Vascular (NASDAQ: LMAT) missed Wall Street’s revenue expectations in Q2 CY2026, but sales rose 9.6% year on year to $70.38 million. Next quarter’s revenue guidance of $67.3 million underwhelmed, coming in 3% below analysts’ estimates. Its GAAP profit of $0.74 per share was 8.3% below analysts’ consensus estimates.

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Chairman/CEO George LeMaitre said, “Our focus on the Artegraft international launch paid off in Q2. The product is now approved in 56 countries, accounting for 21% of sales. So our largest product is now our fastest-growing product. To underpin the Artegraft launch and pave the way for RFA, we continue to build our sales force, go direct in new countries and we’re now undertaking six international warehouse expansions. $376m of cash provides strategic optionality.”

Company Overview

Founded in 1983 and named after a pioneering vascular surgeon, LeMaitre Vascular (NASDAQGM:LMAT) develops and manufactures specialized medical devices used by vascular surgeons to treat peripheral vascular disease and other circulatory conditions.

Revenue Growth

A company’s long-term performance is an indicator of its overall quality. Any business can have short-term success, but a top-tier one grows for years. Over the last five years, LeMaitre grew its sales at a decent 11.8% compounded annual growth rate. Its growth was slightly above 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. LeMaitre’s annualized revenue growth of 13% over the last two years is above its five-year trend, suggesting its demand recently accelerated.

We can dig further into the company’s sales dynamics by analyzing its organic revenue, which strips out one-time events like acquisitions and currency fluctuations that don’t accurately reflect its fundamentals. Over the last two years, LeMaitre’s organic revenue averaged 13.1% year-on-year growth. Because this number aligns with its two-year revenue growth, we can see the company’s core operations (not acquisitions and divestitures) drove most of its results.

This quarter, LeMaitre’s revenue grew by 9.6% year on year to $70.38 million, missing Wall Street’s estimates. Company management is currently guiding for a 10.2% year-on-year increase in sales next quarter.

Looking further ahead, sell-side analysts expect revenue to grow 12% over the next 12 months, similar to its two-year rate. Still, this projection is noteworthy and implies the market is forecasting success for its products and services.

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Operating Margin

Operating margin is a key measure of profitability. Think of it as net income - the bottom line - excluding the impact of taxes and interest on debt, which are less connected to business fundamentals.

LeMaitre has been an efficient company over the last five years. It was one of the more profitable businesses in the healthcare sector, boasting an average operating margin of 22.7%.

Analyzing the trend in its profitability, LeMaitre’s operating margin rose by 8.7 percentage points over the last five years, as its sales growth gave it 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 6 percentage points on a two-year basis.

This quarter, LeMaitre generated an operating margin profit margin of 29%, up 3.9 percentage points year on year. This increase was a welcome development and shows it was more efficient.

Earnings Per Share

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.

LeMaitre’s EPS grew at 15.2% compounded annual growth rate over the last five years, higher than its 11.8% 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 LeMaitre’s earnings to better understand the drivers of its performance. As we mentioned earlier, LeMaitre’s operating margin expanded by 8.7 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 Q2, LeMaitre reported EPS of $0.74, up from $0.60 in the same quarter last year. Despite growing year on year, this print missed analysts’ estimates, but we care more about long-term EPS growth than short-term movements. Over the next 12 months, Wall Street expects LeMaitre’s full-year EPS to grow 10.9% from $2.81 to $3.12.

Key Takeaways from LeMaitre’s Q2 Results

We struggled to find many positives in these results. Its full-year EPS guidance missed and its revenue guidance for next quarter fell short of Wall Street’s estimates. Overall, this was a softer quarter. The stock traded down 11.6% to $93.53 immediately following the results.

LeMaitre’s earnings report left more to be desired. Let’s look forward to see if this quarter has created an opportunity to buy the stock. If you’re making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here (it’s free).