IDEX beats earnings on AI-driven orders, but outlook disappoints
Industrial equipment maker posts record Q4 revenue while projecting 2026 profit below analyst expectations
IDEX Corporation reported better-than-expected fourth quarter earnings, fueled by record demand for artificial intelligence-related projects, though the industrial equipment manufacturer tempered expectations for 2026 with guidance that fell short of analyst projections.
The Lake Forest, Illinois-based company posted adjusted earnings per share of $2.10 for the quarter ending December 31, 2025, surpassing the consensus estimate of $2.04. Revenue climbed 4% to a record $899 million, exceeding the roughly $882 million expected by Wall Street analysts.
The stock rose 1.7% in Wednesday morning trading following the announcement.
"We delivered record sales and orders in the fourth quarter, led by exceptional performance in our Health & Science Technologies segment," said Eric Ashleman, IDEX's chief executive officer. "Our strategic focus on higher-growth, higher-margin end markets is driving strong results."
Orders surged to a record $979 million, representing a 20% increase on a reported basis and 16% organically compared to the same period a year earlier. The surge was primarily driven by the Health & Science Technologies segment, which benefited from increased demand for AI-related projects and data center infrastructure.
For the full year 2025, IDEX achieved record sales of $3.5 billion, a 6% increase from the prior year, with adjusted diluted EPS of $7.95.
Despite the strong quarterly performance, IDEX's outlook for 2026 failed to impress investors. The company projected first quarter earnings per share between $1.73 and $1.78, below the consensus estimate of $1.85. For the full fiscal year 2026, management forecast earnings in the range of $8.15 to $8.35 per share, with the midpoint of $8.25 trailing the $8.31 consensus expectation.
The conservative guidance reflects what the company described as a "challenging industrial environment" that continues to weigh on certain end markets outside of the technology-driven growth areas. This mixed outlook has become increasingly common in the industrial sector, where traditional manufacturing demand remains subdued while opportunities in AI, data centers, and life sciences accelerate.
IDEX's business spans multiple segments, including Health & Science Technologies, Fire & Safety, and Fluid & Metering Technologies. The company specializes in engineered products sold into niche markets where it can command pricing power and maintain higher margins than more commoditized industrial competitors.
Analysts maintained a generally positive stance on the company despite the weaker guidance. The consensus rating remains a "Moderate Buy," according to MarketBeat data, with five analysts recommending purchase and two advising investors to hold shares.
The average 12-month price target among analysts stands at approximately $203.29. Stifel Nicolaus recently raised its price target to $220 from $200, maintaining a buy rating and suggesting roughly 12.6% upside from recent levels. TD Cowen reiterated its buy rating with a $200 price target, noting that analyst consensus targets range from $170 to $212.
The divergence between IDEX's strong order book and muted guidance highlights the broader challenge facing industrial companies in 2026. While demand from AI infrastructure and life sciences provides growth opportunities, traditional industrial markets continue to face pressure from economic uncertainty, interest rate volatility, and uneven global manufacturing activity.
Investors will be watching closely in coming quarters to see whether the AI-driven momentum in Health & Science Technologies can offset weakness in other segments, and whether management can accelerate organic growth beyond the 1% achieved in 2025.