Diagnostic imaging company RadNet (NASDAQ:RDNT) announced better-than-expected revenue in Q4 CY2025, with sales up 14.8% year on year to $547.7 million. Its non-GAAP profit of $0.23 per share was 12.6% above analysts’ consensus estimates.

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

Revenue: $547.7 million vs analyst estimates of $517.9 million (14.8% year-on-year growth, 5.8% beat)

Adjusted EPS: $0.23 vs analyst estimates of $0.20 (12.6% beat)

Adjusted EBITDA: $87.71 million vs analyst estimates of $84.08 million (16% margin, 4.3% beat)

Operating Margin: 5.1%, in line with the same quarter last year

Free Cash Flow was -$100.3 million compared to -$44.04 million in the same quarter last year

Market Capitalization: $5.4 billion

Dr. Howard Berger, President and Chief Executive Officer of RadNet, commented, “I am very pleased with the fourth quarter performance. Relative to last year’s fourth quarter, Total Company Revenue increased 14.8% and Adjusted EBITDA(1) increased 16.9%, resulting in margin improvement of 29 basis points. This performance was driven by strong aggregate and same center procedural growth, combined with a continued focus on driving operating and clinical efficiencies within the Imaging Center segment. These factors, amongst others, contributed to RadNet exceeding 2025 Revenue and Adjusted EBITDA(1) guidance levels in the Imaging Center segment, which had been amended upwards throughout the year.”

With over 350 imaging facilities across seven states and a growing artificial intelligence division, RadNet (NASDAQ:RDNT) operates a network of outpatient diagnostic imaging centers across the United States, offering services like MRI, CT scans, PET scans, mammography, and X-rays.

A company’s long-term sales performance can indicate its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Luckily, RadNet’s sales grew at a solid 13.7% compounded annual growth rate over the last five years. Its growth beat 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. RadNet’s annualized revenue growth of 12.3% over the last two years is below its five-year trend, but we still think the results suggest healthy demand.

This quarter, RadNet reported year-on-year revenue growth of 14.8%, and its $547.7 million of revenue exceeded Wall Street’s estimates by 5.8%.

Looking ahead, sell-side analysts expect revenue to grow 11.7% over the next 12 months, similar to its two-year rate. This projection is commendable and implies the market is forecasting success for its products and services.

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Operating margin is one of the best measures of profitability because it tells us how much money a company takes home after subtracting all core expenses, like marketing and R&D.

RadNet was profitable over the last five years but held back by its large cost base. Its average operating margin of 4.8% was weak for a healthcare business.

Looking at the trend in its profitability, RadNet’s operating margin decreased by 3.2 percentage points over the last five years. The company’s two-year trajectory also shows it failed to get its profitability back to the peak as its margin fell by 3.1 percentage points. This performance was poor no matter how you look at it - it shows its expenses were rising and it couldn’t pass those costs onto its customers.

This quarter, RadNet generated an operating margin profit margin of 5.1%, in line with the same quarter last year. This indicates the company’s overall cost structure has been relatively stable.

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.

RadNet’s full-year EPS flipped from negative to positive over the last five years. This is encouraging and shows it’s at a critical moment in its life.

In Q4, RadNet reported adjusted EPS of $0.23, up from $0.22 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 RadNet’s full-year EPS of $0.39 to grow 78.6%.

We were impressed by how significantly RadNet blew past analysts’ revenue expectations this quarter. We were also glad its EPS outperformed Wall Street’s estimates. Zooming out, we think this quarter featured some important positives. The stock traded up 1.3% to $76.07 immediately following the results.

RadNet put up rock-solid earnings, but one quarter doesn’t necessarily make the stock a buy. Let’s see if this is a good investment. We think that the latest quarter is just one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free.