Conestoga Capital Advisors, an asset management company, released its fourth-quarter 2025 investor letter. As many believe, US equities experienced solid returns in 2025, with double-digit gains across all major indices, yet underlying conditions revealed extreme volatility and market leadership. A copy of the letter can be downloaded here. In Q4 2025, Conestoga Capital Advisors Small Cap Strategy returned -1.89% net-of-fees, trailing the Russell 2000 Growth Index’s 1.22% return. The returns were volatile i ...

Stevanato Group to Report Fourth Quarter and Fiscal Year 2025 Financial Results on March 4, 2026Feb 19, 2026 6:30 AM Eastern Standard Time# Stevanato Group to Report Fourth Quarter and Fiscal Year 2025 Financial Results on March 4, 2026Share---PIOMBINO DESE, Italy--([BUSINESS WIRE])-- [Stevanato Group S.p.A.](NYSE: STVN), a leading global provider of drug containment, drug delivery, and diagnostic solutions to the pharmaceutical, biotechnology, and life sciences industries, announced today that it will issu ...

Core Viewpoint - Investors in the Medical - Drugs sector should consider Stevanato Group (STVN) and Madrigal (MDGL) for potential value opportunities, with STVN currently presenting a more favorable investment outlook [1] Valuation Metrics - Stevanato Group has a Zacks Rank of 2 (Buy), indicating a positive earnings estimate revision trend, while Madrigal has a Zacks Rank of 4 (Sell), suggesting a less favorable outlook [3] - STVN has a forward P/E ratio of 24.26, significantly lower than MDGL's forward P/E of 216.74, indicating STVN may be undervalued [5] - The PEG ratio for STVN is 1.42, compared to MDGL's PEG ratio of 4.66, further suggesting STVN's better valuation relative to its expected earnings growth [5] - STVN's P/B ratio is 3.11, while MDGL's P/B ratio is 17.44, reinforcing the notion that STVN is more attractively priced based on its book value [6] - Based on these metrics, STVN earns a Value grade of B, whereas MDGL receives a Value grade of D, highlighting STVN's superior valuation profile [6] Earnings Outlook - STVN is noted for its improving earnings outlook, which enhances its attractiveness in the Zacks Rank model, positioning it as the superior value option compared to MDGL [7]

Core Insights - The Alger Small Cap Focus Fund's fourth-quarter 2025 investor letter highlights a strong performance in the US equity market, with the S&P 500 rising by 2.7% due to better-than-expected corporate earnings and a supportive macroeconomic environment [1] - The letter notes a divergence in market performance, particularly regarding AI investments, which face skepticism due to various challenges [1] - The Fund's Class A shares outperformed the Russell 2000 Growth Index, with contributions from the Utilities and Financials sectors, while Consumer Discretionary and Information Technology sectors negatively impacted performance [1] Company Insights - Stevanato Group S.p.A. (NYSE:STVN) is identified as a key holding, specializing in pharmaceutical-grade glass packaging for the biopharma and healthcare industries [2][3] - The stock of Stevanato Group experienced a one-month return of -3.80% and a 52-week decline of 13.57%, closing at $19.75 per share with a market capitalization of $5.392 billion as of January 16, 2026 [2] - Concerns regarding Stevanato's performance stem from shipment timing issues, with expectations for fourth-quarter results being lower due to earlier shipments in the third quarter, alongside worries about competition from oral GLP-1 drugs affecting demand for its injectable delivery components [3]

Group 1 - The article discusses the role of buy-side hedge professionals who conduct fundamental, income-oriented, long-term analysis across various sectors in developed markets globally [1] - It emphasizes the importance of engaging in discussions about investment ideas and strategies among professionals in the hedge fund industry [1] Group 2 - The article does not provide specific financial data or performance metrics related to any companies or sectors [2][3]

Core Insights - Investors in the Medical - Drugs sector may consider Sandoz Group AG Sponsored ADR (SDZNY) and Stevanato Group (STVN) as potential undervalued stocks [1] Valuation Metrics - Sandoz Group AG has a Zacks Rank of 2 (Buy), indicating a stronger earnings outlook compared to Stevanato Group, which has a Zacks Rank of 3 (Hold) [3] - The forward P/E ratio for SDZNY is 21.93, while STVN has a forward P/E of 38.10, suggesting SDZNY is more attractively priced [5] - SDZNY has a PEG ratio of 1.17, compared to STVN's PEG ratio of 2.17, indicating SDZNY's expected earnings growth is more favorable [5] - The P/B ratio for SDZNY is 3.56, while STVN's P/B ratio is 3.98, further supporting SDZNY's valuation advantage [6] - Based on various valuation metrics, SDZNY holds a Value grade of B, while STVN has a Value grade of C, indicating SDZNY is currently the superior value option [6]

Summary of Stevanato Group Conference Call Company Overview - **Company**: Stevanato Group (NYSE: STVN) - **Industry**: Pharmaceutical packaging and delivery systems - **Experience**: Over 70 years in the industry, with a focus on the pharmaceutical sector for the last 25 years [2][3] Core Business Segments - **Integrated Platform**: Stevanato Group offers an end-to-end value proposition for the biopharmaceutical industry, focusing on injection-related products [3][4] - **Product Offerings**: Includes traditional vials, syringes (including Nexa and Alba technologies), double chamber syringes, and cartridge-ready products [3][4][6] - **Market Position**: - Market leader in cartridges and vials - Second in syringes globally [5][6] Financial Performance - **Revenue Growth**: - Doubled revenue over the last five years despite challenges such as inventory stocking and foreign exchange issues [7] - Achieved over 40% of revenue from biologics in the first nine months of the year [16] - **Investment**: Raised $1.1 billion from the IPO in 2021, with significant reinvestment into R&D and capacity expansion [8][10] Market Dynamics - **Biopharmaceutical Growth**: The market is experiencing robust growth, particularly among top 25 global customers with rich pipelines in phases two and three [6][7] - **High-Value Products**: Increasing demand for high-value solutions, with a focus on biologics and auto-injectors [15][16] - **GLP-1 Drugs**: Expected to be a strong contributor to revenue, with a projected market share of around 30% for oral formulations in the medium term [46][47] Capacity and Production - **Capacity Expansion**: - Ongoing investments in facilities in Piombino Dese and Fisher, Indiana, with a total investment of $500 million expected to generate $500 million in revenue by 2028 [14][15] - Plans to increase capacity for cartridges and syringes, particularly in response to the growing demand for biologics [13][15] - **Normalization of Vial Orders**: Anticipated growth of 1%-2% for bulk vials and double-digit growth for easy-fill vials by 2026 [36][37] Strategic Focus - **Integrated Systems Strategy**: Aiming to provide a holistic solution for pharmaceutical companies by integrating various components of the supply chain [44][45] - **Client Relationships**: Emphasis on building long-term partnerships with clients to ensure a stable supply chain and meet evolving needs [9][11] Challenges and Outlook - **COVID-19 Impact**: Experienced both tailwinds and headwinds due to the pandemic, with a recovery expected in vial volumes [32][34] - **Biosimilar Market**: Anticipated growth in biosimilars, with similar economic opportunities as originator products [17][22] Engineering Segment - **Operational Upgrades**: Recent enhancements in the engineering division, including increased capacity and improved project management [48][50] - **Healthy Pipeline**: Positive outlook for new opportunities, although conversion to confirmed orders is slower than expected [51] This summary encapsulates the key points discussed during the Stevanato Group conference call, highlighting the company's strategic direction, market position, and financial performance.

Summary of Stevanato Group Conference Call Company Overview - **Company**: Stevanato Group (NYSE: STVN) - **Industry**: Pharmaceutical packaging and automation solutions - **Core Products**: Glass primary packaging components (vials, cartridges, syringes) and modular automated production machinery [1][2] Key Growth Drivers - **Market Position**: Stevanato is well-positioned to leverage growth in biologics, with a long track record of double-digit organic growth [4][5] - **Capital Expenditure**: Significant investments in new plants, including $500 million in Fishers, Indiana, expected to ramp up by 2028, and another plant in Italy [4][5] - **Customer Base**: Serves 23 of the 25 largest pharmaceutical companies, indicating strong demand and high barriers to entry due to capital and expertise requirements [5][6] Financial Performance - **Growth Outlook**: Anticipates mid to high single-digit growth in 2025, with normalization expected in 2026 [7][11] - **High-Value Solutions**: Revenue from high-value solutions reached approximately $520 million, with a 50% growth in Q3 [14][15] - **Profit Margins**: High-value products have gross profit margins of 40%-70%, compared to 15%-35% for non-high-value products, indicating a significant opportunity for margin expansion [18][23] Market Dynamics - **Destocking Effects**: The company has moved past destocking challenges and is seeing a recovery in demand, particularly for sterile vials and high-performance syringes [7][10] - **Competitive Landscape**: Opportunities to gain market share due to disruptions among competitors and the company's innovative product offerings [12][13] Policy and Regulatory Environment - **MFN and Reshoring**: Recent policy changes, including MFN (Most Favored Nation) pricing, are seen as positive for the company, providing more certainty and potential for increased demand [24][25] - **GLP-1 Market**: The company views the growth of the GLP-1 market as a tailwind, with expectations of increased demand for biologics and related packaging solutions [39][41] Engineering Segment - **Engineering Demand**: The engineering segment is currently experiencing timing issues but is expected to recover as new orders are confirmed [50][52] - **Automation Trends**: Increased automation in manufacturing is seen as a key advantage, particularly in developed markets like the U.S. [34][35] Future Outlook - **Long-Term Growth**: The company is optimistic about future growth driven by high-value solutions, increased capacity, and favorable market conditions [23][54] - **Biosimilars and Annex One**: The push towards biosimilars and compliance with Annex One regulations in Europe are expected to further enhance market opportunities [42][49] Conclusion - Stevanato Group is strategically positioned for growth in the pharmaceutical packaging industry, with significant investments in capacity and a strong focus on high-value products. The company is navigating current market challenges while preparing for future opportunities driven by policy changes and increasing demand for biologics.

Financial Performance - Revenue for Q3 2025 reached €303.2 million, a 9.1% increase from €277.9 million in Q3 2024[14] - Gross profit for Q3 2025 was €88.5 million, up 18.9% from €74.4 million in Q3 2024[14] - Operating profit for the nine months ended September 30, 2025, increased to €128.7 million, a 36.4% rise from €94.3 million in the same period of 2024[14] - Net profit for Q3 2025 was €36.1 million, compared to €30.0 million in Q3 2024, reflecting a 20.1% growth[14] - Basic earnings per share for Q3 2025 were €0.13, up from €0.11 in Q3 2024, indicating an 18.2% increase[14] - Total comprehensive income for Q3 2025 was €39.3 million, compared to a loss of €2.6 million in Q3 2024[16] - Profit before tax for the nine months ended September 30, 2025, increased to €123,344 thousand, up from €95,637 thousand in 2024, representing a growth of 29%[21] - Net cash flows from operating activities rose to €191,970 thousand, compared to €112,141 thousand in the same period of 2024, marking an increase of 71%[21] - Basic earnings per ordinary share for the nine months ended September 30, 2025, were €0.34, reflecting a 30.8% increase from €0.26 in 2024[182] Expenses and Costs - Research and development expenses for the nine months ended September 30, 2025, were €19.6 million, down from €26.1 million in the same period of 2024, a decrease of 25.5%[14] - Selling and marketing expenses for the nine months ended September 30, 2025, increased to €20.3 million from €19.0 million in the same period of 2024, a rise of 7.2%[14] - Total expenses for the nine months ended September 30, 2025, were EUR 113,030 thousand, slightly down from EUR 113,439 thousand in 2024[65] - Selling and marketing expenses rose to EUR 20,346 thousand for the nine months ended September 30, 2025, compared to EUR 18,950 thousand in 2024, reflecting increased personnel and marketing costs[65] - Total cost of sales for the nine months ended September 30, 2025, was EUR 602,823 thousand, compared to EUR 569,276 thousand in 2024, reflecting a 5.9% increase[62] Assets and Liabilities - Total assets increased to €2,414,007 thousand as of September 30, 2025, up from €2,328,819 thousand at December 31, 2024, representing a growth of 3.67%[18] - Total liabilities increased to €976,721 thousand at September 30, 2025, compared to €924,434 thousand at December 31, 2024, an increase of 5.66%[18] - Current assets increased slightly to €884,475 thousand as of September 30, 2025, from €879,901 thousand at December 31, 2024, reflecting a growth of 0.65%[18] - Cash and cash equivalents increased to €113,333 thousand at September 30, 2025, from €98,270 thousand at December 31, 2024, representing a growth of 15.3%[18] - Trade receivables decreased to €266,824 thousand at September 30, 2025, down from €295,951 thousand at December 31, 2024, a decline of 9.8%[18] - Total financial liabilities rose to EUR 453,349 thousand at September 30, 2025, from EUR 434,605 thousand at December 31, 2024, primarily due to increased bank loans[120] Market and Growth Outlook - The company anticipates continued growth driven by demand for its products and ongoing capacity expansion initiatives[10] - The total addressable market is estimated to exceed $13 billion in 2024, covering drug containment solutions, drug delivery systems, IVD solutions, and engineering[176] - The Group is expanding its global capacity, particularly in Italy and the United States, with commercial production of high-value syringes launched in 2023 and ready-to-use cartridge production expected to start in 2026[23] - The Group's global footprint allows it to sell products and provide services in approximately 70 countries worldwide, enhancing its market reach[23] Financial Risks and Management - The Group is exposed to financial risks including foreign currency exchange rates, liquidity, credit, and commodity price fluctuations, which could significantly impact financial performance[43] - The average foreign currency exchange rate for the US dollar was 1.1188 for the nine months ended September 30, 2025, compared to 1.0871 for the same period in 2024, indicating a depreciation of the Euro[46] - The Group is assessing the impact of the new Pillar Two income taxes legislation on its future financial performance, with potential exposure identified in China[80][79] Investments and Capital Expenditures - The Group's investment in property, plant, and equipment for the nine months ended September 30, 2025, was €174,409 thousand, a decrease from €213,718 thousand in 2024, down by 18%[21] - Capital expenditures related to ongoing infrastructure investments were approximately EUR 105 million, net of expected contributions from BARDA, which agreed to contribute up to approximately USD 95 million (EUR 80 million) for manufacturing capacity[89] - Property, plant, and equipment additions for the nine months ended September 30, 2025, were EUR 187,650 thousand, driven by new production lines in Fishers, Indiana, and Latina, Italy[87] Shareholder Information - The Group's equity interest in Medical Glass a.s. is 99.74%, with net profit attributable to non-controlling interests reported as of September 30, 2025[42] - The company has a Long Term Incentive Plan running from January 1, 2023 to December 31, 2027, divided into three vesting periods[138] - Share-based compensation expense recognized for the nine months ended September 30, 2025, was EUR 1,013 thousand, down from EUR 1,886 thousand in the same period of 2024[154]

Financial Data and Key Metrics Changes - Revenue for Q3 2025 increased by 9% year over year to $303.2 million, driven by a 14% increase in the BDS segment, which offset a 19% decline in the engineering segment [12][15] - Adjusted EBITDA increased to €77.8 million, with an adjusted EBITDA margin improving by 280 basis points to 25.7% [15] - Net profit totaled $36.1 million, with diluted EPS of $0.13, while adjusted diluted EPS increased 17% to $0.14 [14][15] - Consolidated gross profit margin reached 29.2%, a 240 basis point increase, primarily due to a favorable mix of high-value solutions [13][15] Business Line Data and Key Metrics Changes - The BDS segment revenue rose 14% to €266.7 million, with high-value solutions growing by 47% and representing 55% of segment revenue [15][16] - Revenue from the engineering segment decreased by 19% to €36.4 million, driven by lower revenue from glass conversion and assembly lines [17] - Gross profit margin for the BDS segment increased by 400 basis points to 32%, while the engineering segment's gross profit margin declined to 10.4% [16][17] Market Data and Key Metrics Changes - The company noted strong demand for high-value solutions, particularly in the injectable biologics market, which is expected to continue driving growth [6][7] - The ongoing recovery in vial demand is contributing positively, with expectations of returning to pre-pandemic levels for bulk vials by 2026 [58] Company Strategy and Development Direction - The long-term strategy focuses on meeting the demands of high-growth markets such as injectable biologics, emphasizing premium containment and delivery solutions [6][7] - The company is investing in capacity expansion to support the rising demand for high-value products, with significant capital projects underway in Fishers and Latina [9][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in meeting 2025 guidance despite headwinds from foreign currency and tariffs, citing strong momentum from high-value solutions [4][19] - The company remains optimistic about the long-term demand landscape for manufacturing technologies, particularly as customers invest in U.S. manufacturing operations [9][19] Other Important Information - The company received the COVADIS Silver Medal, placing it in the top 15% of companies assessed globally, reflecting its commitment to sustainability and ESG practices [11] Q&A Session Summary Question: Can you provide more details on the $10 million outperformance in the quarter? - The $10 million outperformance was due to an acceleration of product shipments in the BDS segment, accommodating customer supply chain needs [23] Question: What drove the strong growth in the quarter, and how does the trajectory look going into next year? - Strong demand for high-performance syringes, particularly Nexa, and recovery in Easyfill vials contributed to growth, with expectations for continued robust demand [24][25] Question: Can you update on the margin improvement in Fishers and Latina? - Latina is approaching normalized gross profit margins, while Fishers is still improving but has not yet reached positive margins [27][28] Question: What is the timeline for the engineering segment to return to growth? - The engineering segment is experiencing delays in order conversion, but there is a healthy pipeline and positive feedback from customers, indicating potential for future growth [29][30] Question: How significant are biosimilars to the company's growth strategy? - Biosimilars are expected to contribute to revenue growth, with the company actively engaged in developing products for this market [34][36] Question: What is the outlook for high-value solutions in Q4? - Guidance for Q4 implies a range of 40-41% for high-value solutions, driven by backlog and recent order acceleration [72]