Stabilus (XTRA:STM) Q4 Margin Squeeze Turns EPS Negative, Reinforcing Bearish Profitability Narrative

Stabilus (XTRA:STM) just closed out FY 2025 with fourth quarter revenue of €316.2 million and a basic EPS of -€0.46, setting a cautious tone around the latest earnings print. The company has seen quarterly revenue hold broadly around the mid-€300 million mark this year, from €325.96 million in Q1 and €337.98 million in Q2 to €316.02 million in Q3, while EPS moved from €0.56 and €0.44 earlier in the year to €0.40 in Q3 before slipping negative in Q4. This puts the spotlight squarely on how management plans to stabilise margins from here.

See our full analysis for Stabilus.

With the headline numbers on the table, the next step is to weigh them against the prevailing narratives around Stabilus and to test where the community’s expectations align with the latest margin picture and where the story might need updating.

See what the community is saying about Stabilus

Margins Squeezed, Net Income Swings Negative

• Net profit margin over the last year sits at 1.9%, down from 5.4% a year earlier, with FY 2025 Q4 net income of negative €11.4 million following positive quarterly net income in the prior three quarters.
• Bears argue that heavy exposure to weaker demand and pricing pressure could keep margins under strain, and the recent numbers give them some support:
  • Trailing twelve month net income has fallen to €24.2 million from €70.2 million a year ago, even though trailing revenue is broadly flat at about €1.3 billion.
  • Consensus narrative highlights double digit revenue declines in some regions and ongoing price cuts in APAC, which is consistent with the step down in margins from 5.4% to 1.9%.

Analysts watching Stabilus closely point to the margin slide and negative Q4 net income as signs that operational fixes must start showing through before the next cycle upswing feels secure. 🐻 Stabilus Bear Case

Forecast 34.4% Earnings Growth Versus Slower 3.7% Sales

• Earnings are forecast to grow about 34.4% per year while revenue is expected to grow only 3.7% per year, slower than the 6.3% projected for the wider German market.
• Supporters of the bullish view see this gap as proof that cost cuts and automation can drive profit faster than sales, and the current data partly backs that argument:
  • The consensus narrative points to past EBIT margins around 11% and strong free cash flow even at lower sales, which helps explain why analysts expect margins to improve from 3.9% to 6.3% over three years.
  • At the same time, the decline in trailing earnings from €76.0 million to €24.2 million and the weak 1.9% net margin mean the step up to forecast earnings of €91.0 million will require a clear turnaround in profitability, not just modest revenue growth.

Bulls are essentially betting that stabilising demand and efficiency gains will be strong enough to close the gap between today’s thin margins and those much higher earnings forecasts. 🐂 Stabilus Bull Case

Share Price Trails DCF And Target Valuations

• With the share price at €18.76, the stock trades below both the €36.60 analyst price target and the €40.91 DCF fair value, and on a 19.1x P/E that is cheaper than the German machinery industry at 21.1x and peers at 22.4x.
• What is striking for both bulls and bears is how this discounted valuation sits alongside weaker profitability and balance sheet pressure:
  • Trailing net income of €24.2 million and a 1.9% margin mean the company currently earns much less on roughly €1.3 billion of revenue than it did a year ago, when margin was 5.4%.
  • Risks analysis notes that interest payments are not well covered by earnings and that the dividend record is unstable, so the apparent discount to DCF fair value and analyst targets comes with clear financial and income reliability trade offs.

Next Steps

To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for Stabilus on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.

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A great starting point for your Stabilus research is our analysis highlighting 3 key rewards and 3 important warning signs that could impact your investment decision.

Explore Alternatives

Stabilus faces thinning margins, negative recent earnings and pressure on interest coverage, which together raise questions about the resilience of its balance sheet.

If those vulnerabilities concern you, use our solid balance sheet and fundamentals stocks screener (1937 results) to quickly refocus on companies built on stronger finances, lower leverage and healthier liquidity before you commit fresh capital.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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