Since March 2025, LeMaitre has been in a holding pattern, posting a small return of 1.8% while floating around $85.45. The stock also fell short of the S&P 500’s 18.6% gain during that period.
Is there a buying opportunity in LeMaitre, or does it present a risk to your portfolio? See what our analysts have to say in our full research report, it’s free.
Why Is LeMaitre Not Exciting?
We're sitting this one out for now. Here are three reasons you should be careful with LMAT and a stock we'd rather own.
1. Fewer Distribution Channels Limit its Ceiling
Larger companies benefit from economies of scale, where fixed costs like infrastructure, technology, and administration are spread over a higher volume of goods or services, reducing the cost per unit. Scale can also lead to bargaining power with suppliers, greater brand recognition, and more investment firepower. A virtuous cycle can ensue if a scaled company plays its cards right.
With just $234.6 million in revenue over the past 12 months, LeMaitre is a small company in an industry where scale matters. This makes it difficult to build trust with customers because healthcare is heavily regulated, complex, and resource-intensive.
2. Shrinking Operating Margin
Operating margin is one of the best measures of profitability because it tells us how much money a company takes home after subtracting all core expenses, like marketing and R&D.
Analyzing the trend in its profitability, LeMaitre’s operating margin decreased by 2.3 percentage points 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. Its operating margin for the trailing 12 months was 23.3%.
3. Free Cash Flow Margin Dropping
If you’ve followed StockStory for a while, you know we emphasize free cash flow. Why, you ask? We believe that in the end, cash is king, and you can’t use accounting profits to pay the bills.
As you can see below, LeMaitre’s margin dropped by 4.3 percentage points over the last five years. It may have ticked higher more recently, but shareholders are likely hoping for its margin to at least revert to its historical level. If the longer-term trend returns, it could signal increasing investment needs and capital intensity. LeMaitre’s free cash flow margin for the trailing 12 months was 22.3%.
Final Judgment
LeMaitre isn’t a terrible business, but it doesn’t pass our bar. With its shares lagging the market recently, the stock trades at 36.9× forward P/E (or $85.45 per share). This valuation tells us it’s a bit of a market darling with a lot of good news priced in - we think there are better stocks to buy right now. Let us point you toward one of our top software and edge computing picks.
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