Healthcare products company West Pharmaceutical Services (NYSE: WST) reported Q4 CY2025 results beating Wall Street’s revenue expectations, with sales up 7.5% year on year to $805 million. The company expects the full year’s revenue to be around $3.25 billion, close to analysts’ estimates. Its non-GAAP profit of $2.04 per share was 11.5% above analysts’ consensus estimates.
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West Pharmaceutical Services (WST) Q4 CY2025 Highlights:
- Revenue: $805 million vs analyst estimates of $793.4 million (7.5% year-on-year growth, 1.5% beat)
- Adjusted EPS: $2.04 vs analyst estimates of $1.83 (11.5% beat)
- Adjusted EPS guidance for the upcoming financial year 2026 is $8.02 at the midpoint, beating analyst estimates by 3.4%
- Operating Margin: 19.5%, down from 21.3% in the same quarter last year
- Free Cash Flow Margin: 21.7%, up from 11.4% in the same quarter last year
- Market Capitalization: $17.71 billion
"Our strong finish to 2025 was a result of the team's relentless execution of our growth strategy," said Eric M. Green, West's President, Chief Executive Officer and Chair of the Board.
Company Overview
Founded in 1923 and serving as a critical link in the pharmaceutical supply chain, West Pharmaceutical Services (NYSE: WST) manufactures specialized packaging, containment systems, and delivery devices for injectable drugs and healthcare products.
Revenue Growth
A company’s long-term sales performance can indicate its overall quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Regrettably, West Pharmaceutical Services’s sales grew at a mediocre 7.4% compounded annual growth rate over the last five years. This was below our standard for the healthcare sector and is a poor baseline for our analysis.
We at StockStory place the most emphasis on long-term growth, but within healthcare, a half-decade historical view may miss recent innovations or disruptive industry trends. West Pharmaceutical Services’s recent performance shows its demand has slowed as its annualized revenue growth of 2.1% over the last two years was below its five-year trend. We’re wary when companies in the sector see decelerations in revenue growth, as it could signal changing consumer tastes aided by low switching costs. 
This quarter, West Pharmaceutical Services reported year-on-year revenue growth of 7.5%, and its $805 million of revenue exceeded Wall Street’s estimates by 1.5%.
Looking ahead, sell-side analysts expect revenue to grow 5.5% over the next 12 months, an improvement versus the last two years. This projection is above the sector average and implies its newer products and services will spur better top-line performance.
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Operating Margin
West Pharmaceutical Services 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%.
Looking at the trend in its profitability, West Pharmaceutical Services’s operating margin decreased by 7.5 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 3.9 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.
In Q4, West Pharmaceutical Services generated an operating margin profit margin of 19.5%, down 1.9 percentage points year on year. This reduction is quite minuscule and indicates the company’s overall cost structure has been relatively stable.
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.
West Pharmaceutical Services’s solid 8.9% annual EPS growth over the last five years aligns with its revenue performance. This tells us it maintained its per-share profitability as it expanded.
In Q4, West Pharmaceutical Services reported adjusted EPS of $2.04, up from $1.82 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 West Pharmaceutical Services’s full-year EPS of $7.29 to grow 5.5%.
Key Takeaways from West Pharmaceutical Services’s Q4 Results
We enjoyed seeing West Pharmaceutical Services beat analysts’ full-year EPS guidance expectations this quarter. We were also glad its EPS outperformed Wall Street’s estimates. Overall, we think this was a solid quarter with some key areas of upside. The stock traded up 7.4% to $264.50 immediately following the results.
West Pharmaceutical Services had an encouraging quarter, but one earnings result doesn’t necessarily make the stock a buy. Let’s see if this is a good investment. 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).
