One-glance verdict
Overvalued
$46.51 our estimate vs market $150.66
Wall Street consensus: $194.50 (318.2% higher than our fair-value estimate)
224% above our estimate, beyond the bull case
Fundamentals snapshot
Novanta Inc.
NOVT · NMS · Technology · Scientific & Technical Instruments
Current price
$150.66
52-week range
$98.27 - $176.38
Market cap
$5.70B
Balance sheet
Healthy
5.43x Adequate
Net cash $433.05M. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
3 Risks
3 rewards · 3 risks
- Reward Revenue grew 5.0% last year.
- Reward Returns 5.1% on equity, ahead of 16% of its peers.
- Risk Stock trades 20.5% above its 5-year average P/E.
- Risk Operating margin compressed from 12.5% to 11.5% over 3 years.
What this company does
Novanta Inc.
Novanta Inc. creates specialized technology for making things precisely, especially for medical and industrial robots, earning most of its money from selling these high-tech components. This matters because their products are crucial for advanced manufacturing and medical procedures, showing how important precise engineering is in today's world.
How the company got here
Novanta Inc. has a history stretching back to 1968, originally known as GSI Group, Inc. The company underwent a significant transformation, changing its name to Novanta Inc. in May 2016 to reflect its evolving focus. This rebranding marked a strategic shift towards providing specialized technology solutions for precision medicine and precision manufacturing, moving away from its earlier identity.
What it actually does
Novanta Inc. creates highly specialized technology components and systems that are essential for advanced manufacturing and medical procedures. Think of them as the "brains" and "muscles" behind complex machinery and sensitive medical equipment. Their products enable machines to perform tasks with extreme accuracy and reliability, whether it's building intricate parts or assisting in delicate surgeries.
Automation Enabling Technologies
This segment focuses on the "brains" and "precision movement" for automated systems. Novanta designs and makes components like laser beam steering and scanning solutions, which guide lasers with incredible accuracy for tasks like cutting or marking materials. They also produce robotic motion control systems and specialized bearings that allow robots and machines to move with extreme precision. These technologies are crucial for industries that need to automate complex tasks, such as advanced manufacturing and robotics, ensuring high-quality output and efficiency.
Medical Solutions
In this segment, Novanta provides critical technologies for the healthcare industry. They develop and manufacture medical-grade devices and components, including pumps and insufflators (devices that inflate areas for surgery), imaging and identification systems, and advanced motion control for medical equipment. They also offer integrated operating room technologies, essentially providing the sophisticated tools that help doctors and surgeons perform procedures with greater precision and safety. This segment is vital for advancing medical treatments and improving patient care through technology.
What management is betting on now
Novanta's leadership is focused on leveraging its expertise in precision technologies to capitalize on growth in both the medical and advanced manufacturing sectors. They are investing in innovation to develop next-generation solutions that address the increasing demand for automation and sophisticated medical devices. The strategy involves expanding their product offerings and strengthening their position in key markets where precision and reliability are paramount, aiming to become an indispensable partner for companies pushing the boundaries of technology.
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q4
$59.31M
FY2025 Q1
$27.40M
FY2025 Q2
$11.68M
FY2025 Q3
$4.21M
FY2025 Q4
$5.13M
FY2026 Q2
$47.47M
FY2026 Q3
$57.47M
Revenue
$265.81M
Net income
$12.54M
Diluted EPS
0.30
Operating cash flow
$64.93M
Free cash flow
$57.47M
Fetching…
Sources
Revenue
$257.71M
Net income
$21.10M
Diluted EPS
0.51
Operating cash flow
$51.61M
Free cash flow
$47.47M
Fetching…
Sources
Revenue
$258.35M
Net income
$17.47M
Diluted EPS
0.46
Operating cash flow
$8.80M
Free cash flow
$5.13M
Fetching…
Sources
Revenue
$247.84M
Net income
$10.65M
Diluted EPS
0.30
Operating cash flow
$8.49M
Free cash flow
$4.21M
Fetching…
Sources
Revenue
$241.05M
Net income
$4.50M
Diluted EPS
0.12
Operating cash flow
$15.07M
Free cash flow
$11.68M
Fetching…
Sources
Revenue
$233.37M
Net income
$21.21M
Diluted EPS
0.59
Operating cash flow
$31.68M
Free cash flow
$27.40M
Fetching…
Sources
Revenue
$238.06M
Net income
$16.46M
Diluted EPS
0.45
Operating cash flow
$61.56M
Free cash flow
$59.31M
Fetching…
Sources
Is it cheap or expensive?
Fair value $46.51 vs current price $150.66
Wall Street consensus is the average analyst price target: $194.50 (318.2% higher than our fair-value estimate).
Our most-likely fair value is $46.51 a share — about 69.1% below today's price of $150.66, so the stock currently looks expensive (overvalued).
Is it drowning in debt?
Healthy
Net cash $433.1M - more cash than debt. Interest coverage 5.4x.
Net debt
$-433.05M
Interest coverage
5.43x
Novanta Inc.'s profit covers its interest bill about 5.4 times over. which is stronger than most peers shown here and 1 peers sit below 1x, which is the danger zone where profit does not fully cover the interest bill.
Healthy
Worse cushion
Baseline
Better cushion
NOVT
BASELINE
Novanta Inc.
Total debt $285.60M Interest coverage 5.43x This is the baseline the peer rows are being compared against.
Total debt $4.19B Interest coverage 2.48x -54% vs NOVT Carries about 2.2x less debt cushion than NOVT.
Total debt $3.55B Interest coverage 4.74x -13% vs NOVT Has roughly the same debt cushion as NOVT.
Total debt $2.03B Interest coverage 19.29x +255% vs NOVT Carries about 3.6x more debt cushion than NOVT.
Total debt $16.25M Interest coverage 0.77x -86% vs NOVT Carries about 7.0x less debt cushion than NOVT.
What you should know
The case for and against NOVT
3 Rewards
3 Risks
Rewards
-
Revenue grew 5.0% last year.
-
Returns 5.1% on equity, ahead of 16% of its peers.
-
Free cash flow was positive in 10/10 years.
Risks
-
Stock trades 20.5% above its 5-year average P/E.
-
Operating margin compressed from 12.5% to 11.5% over 3 years.
-
Insider ownership is only 0.7% (peer median: 0.8%).
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
95.35x
Forward P/E
34.50x
P/B
3.52x
P/S
5.53x
EV/EBITDA
29.14x
PEG ratio
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Profitability
How much profit each dollar creates
Gross margin
44.5%
Operating margin
11.5%
Net margin
6.0%
ROE
5.1%
ROA
4.1%
Health
Liquidity and balance-sheet strength
Debt / equity
0.18x
Current ratio
4.57x
Quick ratio
3.65x
Total debt
$285.60M
Total cash
$718.65M
Growth
How the business has been compounding
Revenue TTM
$1.03B
Revenue 5Y CAGR
8.5%
EPS TTM
1.58
EPS 5Y CAGR
-10.6%
Cash flow
How much cash the business throws off
Operating CF TTM
$133.84M
Free CF TTM
$48.43M
FCF margin
4.7%
Dividend
Shareholder payout
Yield
0.0%
Payout ratio
0.0%
Last ex-div date
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