Steel wire manufacturer Insteel (NYSE: IIIN) missed Wall Street’s revenue expectations in Q4 CY2025, but sales rose 23.3% year on year to $159.9 million. Its GAAP profit of $0.39 per share was 4% above analysts’ consensus estimates.

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Company Overview

Growing from a small wire manufacturer to one of the largest in the U.S., Insteel (NYSE: IIIN) provides steel wire reinforcing products for concrete.

Revenue Growth

Examining a company’s long-term performance can provide clues about its quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Over the last five years, Insteel grew its sales at a mediocre 6.5% compounded annual growth rate. This was below our standard for the industrials sector and is a poor baseline for our analysis.

Long-term growth is the most important, but within industrials, a half-decade historical view may miss new industry trends or demand cycles. Insteel’s annualized revenue growth of 5.9% over the last two years aligns with its five-year trend, suggesting its demand was consistently weak.

This quarter, Insteel generated an excellent 23.3% year-on-year revenue growth rate, but its $159.9 million of revenue fell short of Wall Street’s high expectations.

Looking ahead, sell-side analysts expect revenue to grow 9.7% over the next 12 months, an improvement versus the last two years. This projection is healthy and implies its newer products and services will spur better top-line performance.

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Operating Margin

Insteel has managed its cost base well over the last five years. It demonstrated solid profitability for an industrials business, producing an average operating margin of 10.9%. 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.

Analyzing the trend in its profitability, Insteel’s operating margin decreased by 7.5 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.

In Q4, Insteel generated an operating margin profit margin of 5.8%, up 4.5 percentage points year on year. The increase was encouraging, 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

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

Insteel’s EPS grew at a remarkable 12.1% compounded annual growth rate over the last five years, higher than its 6.5% annualized revenue growth. However, we take this with a grain of salt because its operating margin didn’t improve and it didn’t repurchase its shares, meaning the delta came from reduced interest expenses or taxes.

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.

Insteel’s two-year annual EPS growth of 45.4% was fantastic and topped its 5.9% two-year revenue growth.

We can take a deeper look into Insteel’s earnings to better understand the drivers of its performance. Insteel’s operating margin has expanded over the last two years. This was the most relevant factor (aside from the revenue impact) behind its higher earnings; interest expenses and taxes can also affect EPS but don’t tell us as much about a company’s fundamentals.

In Q4, Insteel reported EPS of $0.39, up from $0.06 in the same quarter last year. This print beat analysts’ estimates by 4%. Over the next 12 months, Wall Street expects Insteel’s full-year EPS of $2.43 to grow 10.9%.

Key Takeaways from Insteel’s Q4 Results

It was encouraging to see Insteel beat analysts’ EBITDA expectations this quarter. We were also glad its EPS outperformed Wall Street’s estimates. On the other hand, its revenue slightly missed. Overall, this was a softer quarter. The stock remained flat at $33.63 immediately following the results.

Is Insteel an attractive investment opportunity at the current price? If you’re making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here (it’s free).