Establishment Labs (NASDAQ:ESTA) Announces Quarterly Earnings Results

Key Points

• Q3 revenue rose 33.8% year over year to $71.99 million, exceeding analyst expectations, while U.S. revenue more than doubled. Management raised 2026 revenue guidance to above $274 million and expects approximately 25% growth in 2027.
• The company generated its first positive operating cash flow and free cash flow, at $7.7 million and $5.1 million, respectively, while adjusted EBITDA increased to $6.4 million. However, it reported a $0.35 per-share loss, missing the $0.26 consensus estimate, and remains unprofitable.
• Shares fell 7.8% following the earnings miss and lower-than-expected adjusted gross margin, though U.S. adoption continues to expand and analysts maintain a broadly positive outlook with a “Moderate Buy” consensus rating and a $95 average price target.

Establishment Labs (NASDAQ:ESTA - Get Free Report) posted its quarterly earnings data on Thursday. The company reported ($0.35) earnings per share (EPS) for the quarter, missing the consensus estimate of ($0.26) by ($0.09), Zacks reports. Establishment Labs had a negative return on equity of 196.69% and a negative net margin of 15.82%. The business had revenue of $71.99 million for the quarter, compared to analyst estimates of $66.81 million. During the same quarter last year, the business earned ($0.38) EPS. Establishment Labs's revenue for the quarter was up 33.8% compared to the same quarter last year.

Here are the key takeaways from Establishment Labs' conference call:

• Q3 revenue rose 33.9% to $72 million, led by 119% growth in the U.S. and 9.7% growth internationally. Management raised full-year 2026 revenue guidance to more than $274 million and expects 25% growth in 2027.
• The company generated its first-ever positive free cash flow, with $5.1 million in Q3 free cash flow and $7.7 million in operating cash flow. Adjusted EBITDA increased to $6.4 million, or an 8.9% margin, from $1.2 million a year earlier.
• U.S. adoption continues to expand, with Motiva available in 2,100 accounts and approximately 30% estimated market share. Management is shifting its focus toward increasing utilization among existing surgeons, while minimally invasive revenue is now expected to exceed $40 million for 2026.
• The company said its breast reconstruction submission is progressing, with FDA information requests addressed and site inspections completed; approval is expected in late 2026 or early 2027. However, hospital value-analysis processes could delay meaningful revenue contribution until the second half of 2027.
• Adjusted gross margin was 70.8%, below prior guidance, because distributor sales comprised 60% of OUS revenue rather than the expected 50%. Management maintained full-year adjusted gross margin guidance at approximately 70.7%, reflecting the lower-margin channel mix.

Establishment Labs Trading Down 7.8%

ESTA traded down $5.34 on Friday, reaching $63.07. 731,369 shares of the company's stock were exchanged, compared to its average volume of 517,360. The company's 50 day moving average is $67.25 and its 200-day moving average is $72.36. The company has a market cap of $1.88 billion, a price-to-earnings ratio of -47.95 and a beta of 1.06. Establishment Labs has a twelve month low of $47.00 and a twelve month high of $97.59. The company has a debt-to-equity ratio of 12.11, a quick ratio of 2.52 and a current ratio of 3.84.

Establishment Labs News Summary

Here are the key news stories impacting Establishment Labs this week:

• Positive Sentiment: Revenue rose 33.9% year over year to approximately $72.0 million, exceeding analyst expectations of $66.8 million. U.S. revenue more than doubled to $26.0 million, while the company expanded its commercial footprint to more than 2,100 U.S. accounts and trained over 400 surgeons on its Preservé breast implant system. Establishment Labs Q3 Revenue Rises 33.9% to $72.0 Million
• Positive Sentiment: Management raised its 2026 revenue outlook to more than $274 million and projected approximately 25% revenue growth for 2027, supporting the long-term growth narrative. The quarter also produced the company’s first positive operating cash flow and free cash flow, of roughly $7.7 million and $5.1 million, respectively. Establishment Labs 2027 Growth and 2026 Guidance
• Neutral Sentiment: Gross margin was a solid 69.1%, and cash and equivalents totaled $75.8 million at quarter-end. However, institutional ownership changes were mixed, with several large funds adding shares while others reduced positions.
• Negative Sentiment: Adjusted or GAAP loss came in at $0.35 per share, worse than the consensus loss estimate of $0.26–$0.27, although it improved from a $0.38 loss a year earlier. The earnings miss is likely the main near-term pressure on ESTA. Establishment Labs Q3 Loss and Revenue Results
• Negative Sentiment: Operating expenses increased to $52.3 million from $41.7 million, while the company remains unprofitable. Reported insider activity was also cautious: nine sales and no purchases were recorded over the past six months.

Analyst Ratings Changes

A number of research analysts have recently commented on the stock. Needham & Company LLC upped their price objective on shares of Establishment Labs from $86.00 to $95.00 and gave the company a "buy" rating in a research note on Thursday, August 6th. Citigroup raised shares of Establishment Labs from a "neutral" rating to a "buy" rating and set a $92.00 target price on the stock in a research report on Thursday, August 13th. TD Cowen dropped their price target on shares of Establishment Labs from $117.00 to $95.00 and set a "buy" rating for the company in a research report on Monday. Stifel Nicolaus initiated coverage on shares of Establishment Labs in a research note on Wednesday, October 14th. They set a "buy" rating and a $85.00 price target on the stock. Finally, BTIG Research decreased their price target on shares of Establishment Labs from $103.00 to $93.00 and set a "buy" rating on the stock in a report on Thursday. Nine research analysts have rated the stock with a Buy rating and one has given a Sell rating to the stock. Based on data from MarketBeat.com, Establishment Labs presently has an average rating of "Moderate Buy" and an average price target of $95.00.

Establishment Labs Company Profile

Establishment Labs Holdings Inc is a medical technology company focused on women's health and the breast aesthetics market. The company develops, manufactures and commercializes breast implants and related technologies designed for breast augmentation, reconstruction and revision procedures.

Its product portfolio includes the Motiva line of breast implants, which incorporates the company's proprietary implant materials, surface technologies and design features. Establishment Labs also offers Motiva Flora tissue expanders for use in breast reconstruction and has developed Mia Femtech, a minimally invasive breast enhancement procedure intended to provide a less invasive alternative to traditional augmentation techniques.

Founded in 2004, Establishment Labs is headquartered in Costa Rica and serves physicians, hospitals and patients in international markets.

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