Breaking Down UFP Technologies, Inc. (UFPT) Financial Health: Key Insights for Investors

You're looking at UFP Technologies, Inc. (UFPT) because the numbers coming out of the medical device supply chain are defintely catching attention, but the story isn't just top-line growth. The company reported a strong nine-month period ending September 30, 2025, with sales hitting a solid $453.9 million, a 26% year-over-year increase, and net income at $50.7 million, which is a great jump from the previous year. But here's the quick math: while MedTech sales grew a healthy 7.3% in the third quarter alone, the non-medical business slipped 2.7%, and operational challenges-like the incremental $3 million in labor costs at one facility-pushed the gross margin down slightly to 27.7%. So, the question isn't whether they can grow sales; it's about margin recovery and sustained profitability, especially as analysts forecast full-year 2025 EPS to land around $8.65. We need to look closely at what's driving that margin pressure and if their strategic expansions can keep the momentum going.

Revenue Analysis

You need to know where UFP Technologies, Inc. (UFPT) is making its money, and the clear takeaway is that this is now a medical device component company, period. The nine-month sales through September 30, 2025, hit $453.9 million, showing a strong 26.0% year-over-year increase, but that growth is almost entirely concentrated in one area.

Medical Market Dominance

The company's revenue streams have decisively shifted, making the medical market the single, dominant growth engine. For the first nine months of 2025, medical sales surged to $417.1 million, representing a 31.1% jump from the prior year. This segment now accounts for roughly 92% of the year-to-date revenue, which is a key structural change you defintely need to track.

The non-medical segment, which includes 'Advanced Components,' is being de-prioritized, and it shows. Non-medical sales for the same nine-month period fell by 13.0% to just $36.8 million. Management is intentionally allocating resources away from this lower-growth business to focus on the higher-margin MedTech opportunities.

• Medical sales are the core business.
• Non-medical sales are shrinking by design.

Year-over-Year Revenue Trajectory

The overall revenue growth rate for UFP Technologies, Inc. has been robust, but it's moderating, which is a crucial distinction. The trailing twelve months (TTM) revenue ending September 30, 2025, stood at nearly $597.95 million, up a solid 29.47% from the previous TTM period. Here's the quick math on the quarterly deceleration:

The Q3 growth rate of 6.5% is a sharp slowdown from the Q1 and Q2 surges. To be fair, this isn't a demand problem; it's an execution one. The company is forecasting full-year 2025 revenue around $591.9 million, which is a strong number, but the quarterly volatility is a near-term risk.

Near-Term Revenue Headwinds and Opportunities

The slowdown in Q3 was largely due to temporary labor inefficiencies at the newly acquired AJR facility, which management estimates resulted in approximately $7 million in unfulfilled orders and lost revenue for the quarter. That's a significant operational headwind, but it's expected to peak in Q3 and improve into Q4.

Also, the Robotic-Assisted Surgery (RAS) sub-segment, a major component of the medical business, saw a 6% decline in Q1 2025 sales because a large customer completed a significant inventory build in late 2024. The good news is that the company is launching new robotic surgery programs by the end of 2025, which should drive meaningful revenue in 2026. Plus, the Safe Patient Handling sub-segment is booming, with one key customer agreement providing exclusive manufacturing rights through mid-2030, securing a large chunk of future revenue.

For a deeper look at the institutional money driving this growth, you should check out Exploring UFP Technologies, Inc. (UFPT) Investor Profile: Who's Buying and Why?

Next Step: Portfolio Manager: Re-run your valuation model using a Q4 2025 revenue estimate of $145 million to account for the sustained, albeit moderating, operational challenges.

Profitability Metrics

You want to know if UFP Technologies, Inc. (UFPT) is making money efficiently, and the short answer is yes, but with a recent, manageable dip. The company's Trailing Twelve Months (TTM) financial health, ending Q3 2025, shows a solid 11.2% net profit margin, which is a strong signal in the US Medical Equipment sector. Still, you need to look closer at the gross margin trend to see where the real operational risks lie.

The TTM profitability ratios are robust, reflecting the company's strategic shift toward the higher-growth, higher-margin MedTech business. For the period, UFP Technologies, Inc.'s TTM Gross Margin was 28.5%, its Operating Margin was 15.6%, and its Net Profit Margin was 11.2%. This is the kind of precision that comes from focusing on custom-engineered, single-use medical devices.

Here's the quick math on profitability for the most recent quarter:

• Gross Profit (Q3 2025): Approximately $42.8 million on sales of $154.6 million.
• Operating Income (Q3 2025): $23.4 million.
• Net Income (Q3 2025): $16.4 million.

Margin Trends and Operational Efficiency

The trend over 2025 shows a slight softening, but it's tied to a specific, fixable issue. In Q1 2025, the gross margin was 28.5%, which dipped to 27.7% in Q3 2025. This decrease wasn't a market problem; it was an internal operational hiccup. The company incurred approximately $3 million in incremental labor costs at one facility (AJR) during the third quarter. Honestly, that's a clear, one-time cost that management expects to fade as labor efficiencies normalize in Q4, plus they are investing in automation.

To be fair, the Q3 2025 operating margin also decreased to 15.1% from 17.7% in the same quarter last year, but year-to-date operating income is still up 20.8% to $70.8 million through September 30, 2025. This tells you that while the quarter was weak on margin, the overall 2025 trajectory remains strong, driven by year-to-date sales of $453.9 million.

Industry Comparison: UFPT vs. Peers

When you look at UFP Technologies, Inc. (UFPT) against the broader US Medical Equipment industry, the picture is highly favorable on the bottom line. The TTM Net Profit Margin of 11.2% is strong, outperforming over 85% of its industry peers. Similarly, the Operating Margin of 16.39% is excellent, placing the company in the top tier of its sector.

The one area of caution is the Gross Margin. At 28.76% TTM, UFP Technologies, Inc. is technically outperformed by a majority of its industry peers. This highlights the need for the company to execute on its cost management and automation plans to push that gross margin higher. It also underscores the strategic importance of its Mission Statement, Vision, & Core Values of UFP Technologies, Inc. (UFPT)., which focus on high-value, custom solutions to maintain pricing power.

The key takeaway is that UFP Technologies, Inc. has a defintely superior ability to control selling, general, and administrative expenses (SG&A) and manage interest, which translates a somewhat average gross margin into a top-tier operating and net profit margin. That's where the long-term value is being created.

Debt vs. Equity Structure

You're looking at UFP Technologies, Inc. (UFPT)'s balance sheet to understand how they fund their growth, and the takeaway is clear: the company relies far more on equity than debt, but they've recently taken on strategic debt to fuel acquisitions. This is a sign of a healthy, growth-oriented capital structure, not a red flag.

As of the end of the third quarter of 2025, UFP Technologies, Inc. (UFPT) shows a very manageable debt profile. Their total debt-combining both short-term and long-term obligations-is approximately $146.120 million. This is a significant jump from prior years, but it's been a deliberate move to finance expansion, specifically the recent acquisitions of UNIPEC and TPI, which are already performing ahead of expectations.

Here's the quick math on their debt breakdown, based on the September 30, 2025, financial data:

• Long-Term Debt: $133.620 million, which is the bulk of their debt.
• Short-Term Debt (Current Installments): A small, very manageable $12.500 million.
• Total Equity: A robust $403.913 million.

Debt-to-Equity Ratio: A Conservative Stance

The core metric for judging a company's financial risk is the Debt-to-Equity (D/E) ratio, which tells you how much debt a company uses to finance its assets relative to the value of its shareholders' equity (the capital structure). For UFP Technologies, Inc. (UFPT), the D/E ratio is approximately 0.36 (or 36%) based on the Q3 2025 figures.

This is a defintely conservative ratio. For context, in the specialized manufacturing and medical equipment sector where UFP Technologies, Inc. (UFPT) operates, a D/E ratio of 0.36 is quite good. The company's D/E ratio is considered comparable to its industry peers, and some analysts note it outperforms nearly half of its competitors, suggesting a lower reliance on external financing than many in the space. They are not over-leveraged.

The low D/E ratio is reinforced by other credit metrics. For example, their net debt is sitting at just 1.3 times EBITDA, and their interest coverage ratio is a strong 7.9 times, meaning they can easily cover their interest payments with operating earnings.

Recent Financing Activity and Strategy

UFP Technologies, Inc. (UFPT) has used debt strategically to fund its growth-by-acquisition model, which is a smart use of low-cost capital when executed well. The significant increase in debt over the last year was tied to this M&A activity. While the company doesn't have a public credit rating like a massive BlackRock-backed entity, the strong interest coverage and low D/E ratio speak volumes about their creditworthiness and ability to manage this debt.

The company clearly favors a balanced approach, but with a heavy tilt toward equity funding (shareholders' capital) over debt financing. This is a strategic choice that keeps the balance sheet flexible for future opportunities and minimizes interest expense risk. If you want to dive deeper into how this impacts their overall valuation, you can check out the full analysis here: Breaking Down UFP Technologies, Inc. (UFPT) Financial Health: Key Insights for Investors.

Liquidity and Solvency

You need to know if UFP Technologies, Inc. (UFPT) can comfortably cover its near-term obligations, and the quick answer is yes, they can. The company's liquidity position as of the third quarter of 2025 is defintely solid, supported by strong current and quick ratios that are well above the cautionary 1.0 threshold.

Current and Quick Ratios Signal Strength

The core of liquidity analysis starts with two simple metrics: the Current Ratio and the Quick Ratio (also called the acid-test ratio). These ratios tell you how much of a company's most liquid assets are available to pay off its short-term debts.

For UFP Technologies, Inc. as of September 30, 2025, the picture is reassuring:

• The Current Ratio sits at approximately 2.41. This means the company has $2.41 in current assets-cash, receivables, and inventory-for every $1.00 in current liabilities.
• The Quick Ratio is about 1.26. This is the stricter test, as it strips out inventory, which can be slow to convert to cash. A ratio over 1.0 is excellent, showing UFP Technologies, Inc. can cover its immediate debts even if it can't sell a single piece of inventory.

Here's the quick math: Current Assets were $197.97 million and Current Liabilities were $82.23 million at the end of Q3 2025. A Current Ratio of 2.41 is a strong indicator of financial health, giving the company a significant buffer.

Working Capital Trends and Analysis

Working capital, which is just Current Assets minus Current Liabilities, represents the capital available for day-to-day operations. For UFP Technologies, Inc., this figure remains substantial, though it saw a slight dip in the nine months leading up to Q3 2025.

As of September 30, 2025, the working capital was approximately $115.75 million. This is a minor decrease from the $118.65 million reported at the end of the 2024 fiscal year. What this estimate hides is that the company is effectively managing its short-term obligations while still investing in growth, which is a good sign. The small reduction suggests capital is being deployed, not wasted.

Cash Flow Statements Overview

Cash flow is the lifeblood of a growing company. Analyzing the cash flow statement (CFS) shows where the money is truly coming from and where it's going. The trends for UFP Technologies, Inc. through the first quarter of 2025 highlight a focus on operational efficiency and debt management.

The company generated $13.8 million in cash from operations in the first quarter of 2025 alone. This positive operating cash flow (OCF) is the most important metric, as it shows the core business is generating cash, not just paper profit. The trends are clear:

• Operating Cash Flow (OCF): Strong and positive, indicating healthy cash generation from core medical device and packaging manufacturing.
• Investing Cash Flow (ICF): The company had capital expenditures of $2.8 million in Q1 2025, which is a negative cash flow but represents necessary investment in property, plant, and equipment for future growth.
• Financing Cash Flow (FCF): UFP Technologies, Inc. paid down approximately $7.0 million in debt during Q1 2025. This is a key action, showing a commitment to deleveraging and strengthening the balance sheet, which is a positive signal for investors.

The table below summarizes the key liquidity positions based on the Q3 2025 balance sheet data (in thousands of USD):

Liquidity Strengths and Actionable Insights

There are no immediate liquidity concerns. The company's high current and quick ratios, plus its positive operating cash flow, paint a picture of a financially stable business. The primary strength is its ability to self-fund operations and growth while simultaneously paying down debt, as evidenced by the $7.0 million debt reduction in Q1 2025. This operational strength is what allows them to manage the capital expenditures needed for facility expansion, like doubling the size of their Dominican Republic operations.

For a deeper dive into the company's strategic position, you should read the full analysis at Breaking Down UFP Technologies, Inc. (UFPT) Financial Health: Key Insights for Investors. Your next step is to look at the profitability metrics to see how efficiently this liquidity is being generated.

Valuation Analysis

You're looking at UFP Technologies, Inc. (UFPT) after a challenging year, wondering if the recent stock rebound makes it a buy or if the market is still catching up to its intrinsic value. The quick takeaway is that, based on key 2025 fiscal year metrics, UFP Technologies, Inc. is trading at a premium to its historical averages, suggesting the market expects continued strong growth in its medical device and packaging segments.

Here's the quick math on where UFP Technologies, Inc. stands relative to its earnings, book value, and cash flow multiples, using data as of November 2025. This helps us see if the current price of around $219.98 is justified.

• Price-to-Earnings (P/E): The trailing P/E ratio is 25.48, which is a bit higher than the S&P 500's average of 25.56 [cite: 5, 18 in previous step]. The forward P/E, which uses estimated future earnings, is lower at 23.55, suggesting analysts anticipate earnings growth to slightly moderate the multiple.
• Price-to-Book (P/B): The TTM (Trailing Twelve Months) P/B ratio is 4.4x. This is a significant premium, telling you investors are willing to pay 4.4 times the company's net asset value (book value) for its future earnings power, which is typical for a high-growth medical technology supplier.
• Enterprise Value-to-EBITDA (EV/EBITDA): This metric, which is often better for comparing capital-intensive companies, sits at 16.39 [cite: 13 in previous step]. This multiple is generally considered high, but it's important to compare it to industry peers in the specialized medical device space, not just general industrials.

What this estimate hides is the company's exceptional five-year performance. While the 12-month total shareholder return is down -26.5%, the five-year total return is a massive 376.8% [cite: 10 in previous step]. The stock hit an all-time high of $358.42 in September 2024, so the recent price action is a cooling-off period after a major run-up [cite: 6 in previous step].

UFP Technologies, Inc. is defintely a growth-focused company, which is clear because it does not pay a regular dividend. The dividend yield is 0%, and the payout ratio is non-applicable, as management prioritizes reinvesting all earnings back into the business for expansion and acquisitions [cite: 5, 12 in previous step].

The Street's consensus is mixed, but the prevailing view is cautious optimism. The average analyst price target is $289.00, representing a potential upside of over 31% from the current price. The overall consensus rating is a 'Hold,' with some analysts leaning 'Buy'. A 'Hold' rating basically says, 'Keep what you have, but don't rush to buy more right now.'

To understand the depth of institutional interest in UFP Technologies, Inc. and who is driving these valuation premiums, you should check out Exploring UFP Technologies, Inc. (UFPT) Investor Profile: Who's Buying and Why?

Here is a summary of the core valuation ratios as of late 2025:

Risk Factors

You've seen UFP Technologies, Inc. (UFPT) deliver strong year-to-date performance, with nine-month sales hitting $453.9 million, a 26% rise over 2024. But as a seasoned investor, you know that looking at the risks is just as important as celebrating the wins. The company is navigating a few critical near-term risks-mostly operational-that are impacting margins right now, plus a structural risk you need to keep an eye on.

Honestly, the biggest risk in Q3 2025 was internal, specifically in operations. The company incurred roughly $3 million in incremental labor costs at its AJR Illinois facility. This was a direct result of a post-acquisition review of the labor force's eligibility to work, and it's why the gross margin dipped to 27.7% from 28.6% in the same quarter last year. This operational hiccup also led to a 23% decline in the smaller Patient Services and Support segment. The good news is management expects the impact in Q4 to be defintely less as new, E-Verified employees get up to speed.

The core strategic risk is customer concentration. UFP Technologies, Inc. is heavily focused on the MedTech sector, which accounted for 92.1% of Q3 2025 sales. While this focus is a tailwind for growth, it also means a small number of customers hold significant power. Specifically, two customers made up a combined 44.2% of Q3 sales, with the largest accounting for 27.1% and the second largest for 17.1%. That's a lot of eggs in two baskets. A change in purchasing strategy or a contract shift from just one of those customers could materially impact your revenue outlook.

Here's the quick math: losing the largest customer means losing over a quarter of your sales. That's a big deal.

The company is mitigating this concentration risk by being proactive. They are in discussions to extend and expand their contract with the largest customer, which should increase volumes. Also, they are pushing hard on new programs, like the launch of new robotic surgery platforms, which are expected to generate significant revenue in 2026. You can see their long-term focus on medical device leadership here: Mission Statement, Vision, & Core Values of UFP Technologies, Inc. (UFPT).

Beyond the internal and customer-specific risks, the company still faces broader industry headwinds. These external risks include inventory destocking across the healthcare sector and general macroeconomic challenges that can slow demand. The company's mitigation strategy here is simple: diversification within the MedTech space and a disciplined approach to cost control, plus passing some tariff and labor costs to customers where possible. They are also making strategic investments in automation and expanding facilities, like the new site in the Dominican Republic, to improve efficiency and support higher-margin product lines.

• Operational Fix: Expect lower labor inefficiency costs in Q4 2025.
• Strategic Defense: Negotiate expanded contracts with top customers.
• Growth Catalyst: Ramp up new robotic surgery programs for 2026 revenue.

The integration of recent acquisitions, like UNIPEC and TPI in 2025, is another ongoing risk, but management reports both are performing ahead of expectations, which is a positive sign for future margin stability. What this estimate hides is the potential for unforeseen integration costs or delays that could still pressure margins down the road.

Growth Opportunities

You're looking for where UFP Technologies, Inc. (UFPT) will find its next gear of growth, and the answer is clear: it's all about deepening its specialized role in the MedTech supply chain. The company is defintely not relying on organic growth alone; it's a strategic mix of M&A (mergers and acquisitions) and high-value product ramp-ups that will drive the numbers.

For the full fiscal year 2025, analysts are projecting total revenue to hit about $601.57 million, with earnings per share (EPS) expected to be around $8.65. Here's the quick math: that revenue forecast implies a near-term growth rate of approximately 6.8% over the next twelve months, which is solid, but the long-term story is in the product mix and strategic moves.

Key Growth Drivers: Robotics and Acquisitions

The most significant near-term catalyst is the robotic surgery platform. UFP Technologies anticipates a substantial revenue boost from new robotic surgery programs launching by year-end 2025. This isn't just a pilot program; they are a key supplier in this high-growth space, and this expansion is baked into the optimistic outlook for margin recovery.

• Robotic Surgery: New program launches expected to drive significant Q4/2026 revenue.
• Strategic Acquisitions: Recent tuck-ins like Technoplastics (acquired July 2025 for $4.5 million) and the Q2 acquisitions of UNIPEC and TPI are already performing ahead of expectations, adding critical thin-film and thermoplastic molding capabilities.
• MedTech Specialization: The medical market is the core focus, with sales to this segment accounting for 92.1% of Q3 2025 sales, up from prior periods due to these acquisitions.

These acquisitions are helping UFP Technologies cement its position as a crucial contract development and manufacturing organization (CDMO), especially in the single-use and single-patient medical device categories. The medical market is where the money is, and they are doubling down.

Competitive Edge and Strategic Initiatives

UFP Technologies' competitive advantage isn't about being the cheapest; it's about being indispensable. They hold a strong market position as a key supplier for complex, customized components and sterile packaging. This is a high-barrier-to-entry business, and their expertise in custom solutions for medical devices sets them apart.

Plus, they have deep, long-standing relationships with major players. For instance, their two largest customers, Stryker Corporation and Intuitive Surgical SARL, accounted for 24.0% and 21.4% of total net sales, respectively, in Q1 2025. To be fair, this customer concentration is a risk, but it also shows how deeply integrated they are. They even secured an agreement with their second-largest customer for exclusive manufacturing rights for a significant portion of the Safe Patient Handling business through June 2030. That's a strong, long-term revenue lock-in.

Looking at the strategic roadmap, they are focusing on operational efficiency and capacity expansion. The ramp-up of operations in the Dominican Republic is a key initiative aimed at improving margin performance after some labor inefficiencies at the AJR facility earlier in the year. Management is confident these operational hurdles will be cleared by Q4 2025.

Here is a snapshot of their recent financial performance that underscores this trajectory:

The core takeaway is that while the non-medical segment is declining, the MedTech focus is driving strong top-line and bottom-line growth. For a deeper dive into the company's financial stability, check out the full post: Breaking Down UFP Technologies, Inc. (UFPT) Financial Health: Key Insights for Investors.