Eton Pharmaceuticals Reported Q4 Results and I am Happy With Them
Eton Pharmaceuticals, Inc. (ETON) reported Q4 results. This is a follow up post to my blog from last week. The market appears reasonably happy with these results and so am I, increasing to about $21.00 after hours. ETON has bucked the trend of the market and has steadily gone up this week.
I was optimistic that ETON could beat analyst estimates of $20.6 million in revenue for Q4 and it did with $21.3 million. My estimate of $14 million in gross margin came in reasonably close at $13.1 million, a vast improvement on $6.5 million in gross margin for Q4 2025 and $7.9 million in Q3 2025. Opex costs were about $1.4 million higher in Q4 than Q3. Luckily much of that is in the form of $1.1 million in stock comp. So while actual fully diluted EPS is a respectable $0.05, the non-GAAP fully diluted EPS - the number in which everyone will compare against analyst consensus - came in at $0.19. That’s above my guess of $0.15 and analyst consensus of $0.10.
The company expects $110 million in revenue for 2026, above the analyst consensus of $105 million. It also expects adjusted EBITDA margin of over 30% for 2026, leading to at least $33 million. Adjusted EBITDA was $15.8 million for 2015. GAAP net income was $10.8 million for 2025 which led to a $0.32 fully diluted adjusted EPS. Assuming the majority of the $18 million increase in EBITDA flows to the bottom line, the company is set to increase adjusted EPS by nearly 3x this year, landing somewhere in the $0.90 range.
This is pretty much a clean sweep for me in terms of analyst expectations and company performance. I wish every company was as easy to forecast as ETON has been. I expect a strong stock performance tomorrow barring any bad news or a market collapse. Heck, the market has been terrible and ETON has still gone up so maybe it won’t matter what the market does tomorrow.
Disclosure: I am long ETON.
I have closed out my position on ETON. I'm happy with this one and I think it's fairly valued now in the low to mid $20's.
One small point I'd like to clarify. Looks like non-GAAP EPS consensus was $0.20 and GAAP EPS consensus was $0.10. My data source for the first blog wasn't clear. Still doesn't change the story much. Company beats on revenue, guides above consensus for 2026 and is pretty much bang on to EPS. It has gone from a money-losing operation at the start of the year to one generating consistent net income and revenue growth.