Lifting and material handling equipment company Terex (NYSE: TEX) beat Wall Street’s revenue expectations in Q4 CY2025, with sales up 6.2% year on year to $1.32 billion. The company’s full-year revenue guidance of $7.8 billion at the midpoint came in 40.1% above analysts’ estimates. Its GAAP profit of $0.95 per share was 4.6% below analysts’ consensus estimates.

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Jennifer Kong-Picarello, Senior Vice President and Chief Financial Officer, said, "I am very pleased that we delivered on all our key 2025 financial expectations, including $325 million of free cash flow reflecting 147% cash conversion. By completing the REV merger, we enter 2026 with even more opportunities to create value for our shareholders. "

Company Overview

With humble beginnings as a dump truck company, Terex (NYSE: TEX) today manufactures lifting and material handling equipment designed to move and hoist heavy goods and materials.

Revenue Growth

A company’s long-term sales performance can indicate its overall quality. Any business can have short-term success, but a top-tier one grows for years. Thankfully, Terex’s 12% annualized revenue growth over the last five years was impressive. Its growth beat the average industrials company and shows its offerings resonate with customers.

We at StockStory place the most emphasis on long-term growth, but within industrials, a half-decade historical view may miss cycles, industry trends, or a company capitalizing on catalysts such as a new contract win or a successful product line. Terex’s recent performance shows its demand has slowed significantly as its annualized revenue growth of 2.6% over the last two years was well below its five-year trend. We also note many other Construction Machinery businesses have faced declining sales because of cyclical headwinds. While Terex grew slower than we’d like, it did do better than its peers.

This quarter, Terex reported year-on-year revenue growth of 6.2%, and its $1.32 billion of revenue exceeded Wall Street’s estimates by 0.8%.

Looking ahead, sell-side analysts expect revenue to grow 3.1% over the next 12 months, similar to its two-year rate. This projection is underwhelming and suggests its newer products and services will not lead to better top-line performance yet.

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Operating Margin

Operating margin is an important measure of profitability as it shows the portion of revenue left after accounting for all core expenses – everything from the cost of goods sold to advertising and wages. It’s also useful for comparing profitability across companies with different levels of debt and tax rates because it excludes interest and taxes.

Terex’s operating margin might fluctuated slightly over the last 12 months but has remained more or less the same, averaging 9.9% over the last five years. This profitability was solid for an industrials business and shows it’s an efficient company that manages its expenses well. This result was particularly impressive because of its low gross margin, which is mostly a factor of what it sells and takes huge shifts to move meaningfully. Companies have more control over their operating margins, and it’s a show of well-managed operations if they’re high when gross margins are low.

Looking at the trend in its profitability, Terex’s operating margin might fluctuated slightly but has generally stayed the same over the last five years. This raises questions about the company’s expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability.

In Q4, Terex generated an operating margin profit margin of 10.4%, up 6.1 percentage points year on year. The increase was solid, and because its operating margin rose more than its gross margin, we can infer it was more efficient with expenses such as marketing, R&D, and administrative overhead.

Earnings Per Share

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.

Terex’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.

Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.

Sadly for Terex, its EPS declined by 33.7% annually over the last two years while its revenue grew by 2.6%. This tells us the company became less profitable on a per-share basis as it expanded.

In Q4, Terex reported EPS of $0.95, up from negative $0.03 in the same quarter last year. Despite growing year on year, this print missed analysts’ estimates, but we care more about long-term EPS growth than short-term movements. Over the next 12 months, Wall Street expects Terex’s full-year EPS of $3.34 to grow 61.9%.

Key Takeaways from Terex’s Q4 Results

We were impressed by Terex’s optimistic full-year EBITDA guidance, which blew past analysts’ expectations. We were also glad its full-year revenue guidance trumped Wall Street’s estimates. On the other hand, its EPS missed and its EBITDA fell slightly short of Wall Street’s estimates. Overall, we think this was a mixed quarter. The stock remained flat at $59.76 immediately after reporting.

Indeed, Terex had a rock-solid quarterly earnings result, but is this stock a good investment here? 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).