Proto Labs shares surge 14% on swing to Q4 profit, record revenue
Digital manufacturer beats earnings estimates with 25% jump in CNC machining segment
Proto Labs shares jumped as much as 14.7% in Thursday trading after the digital manufacturer swung to a fourth-quarter profit and delivered record revenue that handily exceeded analyst expectations, signaling momentum in its turnaround strategy.
The Maple Plain, Minnesota-based company reported Q4 revenue of $136.5 million, a 12.1% increase from the prior year and significantly above the consensus estimate of $129.5 million. Net income reached $6.0 million, or $0.25 per diluted share, compared to a net loss in the year-ago period. On a non-GAAP basis, earnings per share of $0.44 surpassed analyst projections of $0.34.
The standout performance came from Proto Labs' CNC machining segment, which surged 25% year-over-year in the fourth quarter, helping drive the company's return to profitability. For the full year 2025, revenue reached a record $533.1 million, up 6.4% from 2024, with CNC machining revenue growing 17.6% over the same period.
"We delivered record revenue in both the fourth quarter and full year 2025, driven by broad-based strength across our service lines," management said in a statement announcing the results. "Our focus on enhancing the customer experience, accelerating innovation, expanding production capabilities and improving operational efficiency is driving momentum across the business."
The company generated $74.5 million in cash from operations during 2025, providing financial flexibility to support its four strategic pillars: customer experience enhancement, innovation acceleration, production expansion and operational efficiency improvements.
Looking ahead, Proto Labs issued guidance for fiscal 2026 that calls for revenue growth of 6% to 8%, consistent with its long-term targets. For the first quarter of 2026, the company projects revenue of $130 million to $138 million, with non-GAAP EPS of $0.36 to $0.44. The midpoint of that revenue range, $134 million, exceeds analyst estimates of $131.7 million.
The strong results and optimistic outlook prompted analysts to maintain positive views on the stock. Proto Labs currently trades with an average 1-year price target of approximately $53 to $57, representing potential upside from current levels.
As of the February 6, 2026 close, the stock was trading around $52.48 before the earnings announcement, with a market capitalization of roughly $1.28 billion. The company's high institutional ownership of 94% suggests confidence among large investors in its digital manufacturing platform and ability to capitalize on growing demand for rapid prototyping and on-demand production.
Proto Labs' e-commerce platform leverages advanced technologies including 3D printing and CNC machining to produce customized components for industries ranging from aerospace and automotive to healthcare. The company's ability to reduce product development timelines has become increasingly valuable as manufacturers seek to adapt quickly to changing market dynamics.
The strong performance in CNC machining highlights Proto Labs' success in diversifying beyond its core 3D printing business. The segment's 25% growth in Q4 and 17.6% growth for the full year demonstrate the effectiveness of the company's strategy to expand its manufacturing capabilities and serve a broader range of customer needs.
However, the stock still faces valuation considerations. With a trailing price-to-earnings ratio of 86.23 and a forward P/E of 24.69, investors will be watching closely for evidence that the current momentum can be sustained through 2026. The company's ability to maintain 6-8% revenue growth while improving profitability will be key to justifying its premium valuation.