Integer Reports Solid 2025 Growth but 2026 Outlook Unchanged Amid High Valuation

What happened

Integer Holdings Corporation announced fourth quarter and full year 2025 results, delivering 8% sales growth and a 21% increase in adjusted EPS. The company maintained its 2026 outlook from October, holding the midpoint of sales growth and the high end of adjusted EPS, despite previously flagging headwinds for that year. Management reiterated the long-term target to achieve 200 basis points above-market organic sales growth by 2027, aligning with strategic aspirations. However, these results come against a backdrop of elevated valuation multiples, with a P/E around 30 and EV/EBITDA near 58, and leverage remaining high at approximately 3.4x net debt/EBITDA. The unchanged 2026 guidance suggests that while 2025 execution was robust, near-term challenges persist, keeping the investment thesis cautious.

Implication

The solid 2025 growth validates Integer's operational capabilities but does little to alleviate concerns over its high valuation, which leaves minimal margin of safety. Maintaining the 2026 outlook indicates management's confidence in navigating acknowledged headwinds, yet it also signals that growth may decelerate before rebounding in 2027. Elevated leverage at ~3.4x net debt/EBITDA continues to pose financial risk, especially if free cash flow volatility or interest rate pressures emerge. Investors must closely monitor execution on new product ramps and supply chain stability, as any missteps could exacerbate valuation compression. Overall, the HOLD thesis is reinforced, requiring either a valuation pullback or clearer evidence that 2027 above-market growth targets are achievable without further dilution or debt increases.

Thesis delta

The news confirms Integer's ability to meet 2025 targets but does not alter the fundamental investment thesis, as valuation remains stretched and 2026 headwinds are unchanged. The HOLD recommendation persists, with shares still appearing fully priced relative to the risk-adjusted growth trajectory. No significant shift is warranted, but investors should watch for execution on 2027 goals or a valuation reset to consider a more bullish stance.