Diversified solutions provider Matthews International (NASDAQ:MATW) reported revenue ahead of Wall Streets expectations in Q4 CY2025, but sales fell by 29.1% year on year to $284.8 million. Its non-GAAP loss of $0.19 per share was significantly below analysts’ consensus estimates.

Is now the time to buy Matthews? Find out in our full research report.

Revenue: $284.8 million vs analyst estimates of $282.5 million (29.1% year-on-year decline, 0.8% beat)

Adjusted EPS: -$0.19 vs analyst estimates of $0.05 (significant miss)

Adjusted EBITDA: $35.24 million vs analyst estimates of $32.4 million (12.4% margin, 8.8% beat)

EBITDA guidance for the full year is $180 million at the midpoint, in line with analyst expectations

Operating Margin: 34.2%, up from 1.7% in the same quarter last year

Free Cash Flow was -$57.25 million compared to -$34.54 million in the same quarter last year

Market Capitalization: $820.7 million

Originally a death care company, Matthews International (NASDAQ:MATW) is a diversified company offering ceremonial services, brand solutions and industrial technologies.

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 the best consistently grow over the long haul. Over the last five years, Matthews’s demand was weak and its revenue declined by 1.9% per year. This wasn’t a great result and suggests it’s a low quality business.

We at StockStory place the most emphasis on long-term growth, but within consumer discretionary, a stretched historical view may miss a company riding a successful new product or trend. Matthews’s recent performance shows its demand remained suppressed as its revenue has declined by 14.3% annually over the last two years.

This quarter, Matthews’s revenue fell by 29.1% year on year to $284.8 million but beat Wall Street’s estimates by 0.8%.

Looking ahead, sell-side analysts expect revenue to decline by 21.4% 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 see some demand headwinds.

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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.

Matthews’s operating margin has been trending up over the last 12 months and averaged 7% over the last two years. The company’s higher efficiency is a breath of fresh air, but its suboptimal cost structure means it still sports inadequate profitability for a consumer discretionary business.

In Q4, Matthews generated an operating margin profit margin of 34.2%, up 32.6 percentage points year on year. This increase was a welcome development, especially since its revenue fell, showing it was more efficient because it scaled down its expenses.

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.

Sadly for Matthews, its EPS declined by 22% annually over the last five years, more than its revenue. However, its operating margin actually improved during this time, telling us that non-fundamental factors such as interest expenses and taxes affected its ultimate earnings.

In Q4, Matthews reported adjusted EPS of negative $0.19, down from $0.14 in the same quarter last year. This print missed analysts’ estimates. We also like to analyze expected EPS growth based on Wall Street analysts’ consensus projections, but there is insufficient data.

It was encouraging to see Matthews beat analysts’ EBITDA expectations this quarter. We were also happy its revenue narrowly outperformed Wall Street’s estimates. On the other hand, its EPS missed. Overall, this quarter could have been better. The stock remained flat at $26.46 immediately after reporting.

Should you buy the stock or not? When making that decision, it’s important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it’s free.