One-glance verdict
Overvalued
$159.94 our estimate vs market $321.20
Wall Street consensus: $515.12 (222.1% higher than our fair-value estimate)
101% above our estimate, beyond the bull case
Fundamentals snapshot
Nova Ltd.
NVMI · NMS · Technology · Semiconductor Equipment & Materials
Current price
$321.20
52-week range
$266.43 - $615.99
Market cap
$10.22B
Balance sheet
Healthy
197.40x Strong cushion
Net cash $217.50M. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
2 Risks
3 rewards · 2 risks
- Reward Revenue grew 31.0% last year.
- Reward Returns 21.1% on equity, ahead of 16% of its peers.
- Risk Stock trades 27.3% above its 5-year average P/E.
- Risk Insider ownership is only 0.2% (peer median: 0.3%).
What this company does
Nova Ltd.
Nova Ltd. makes special machines that help semiconductor factories check if their tiny computer chips are being made perfectly. Most of their money comes from selling these machines and the software that runs them to chip makers all over the world, which is important because these checks are crucial for making good chips.
How the company got here
Nova Ltd. was founded in Israel in 1993 by Giora Dishon and Moshe Finarov, who aimed to revolutionize semiconductor manufacturing by integrating measurement capabilities directly into the production process. This approach, known as integrated metrology, allows for real-time adjustments during chip creation, rather than relying on post-production checks. The company went public on Nasdaq in 2000, and over the years, it has expanded its offerings through strategic acquisitions, broadening its expertise in dimensional, materials, and chemical metrology. In 2021, the company officially changed its name from Nova Measuring Instruments to Nova Ltd. to better reflect its expanded scope.
What it actually does
Nova Ltd. designs, develops, and sells advanced process control systems, which are essentially sophisticated measurement tools used in the manufacturing of semiconductors. These systems help chipmakers ensure that the microscopic components on their silicon wafers are made to precise specifications. By embedding these measurement capabilities directly into the manufacturing equipment, Nova enables real-time monitoring and control, which is crucial for producing the complex, high-performance chips used in everything from smartphones to advanced computers.
Dimensional Metrology
This business line focuses on measuring the physical dimensions of features on a semiconductor chip, such as the width of tiny lines or the depth of small trenches. Think of it like using an incredibly precise ruler and caliper to measure things far smaller than a human hair. These measurements are critical because even minuscule variations in size can render a chip useless. Chip manufacturers pay Nova for these systems to ensure their production processes are creating components within the exact tolerances required for the chip to function correctly.
Materials Metrology
This segment of Nova's business involves analyzing the composition and properties of the various thin films and materials used in semiconductor manufacturing. It's akin to a chemist analyzing the ingredients and structure of a complex recipe to ensure everything is just right. Manufacturers rely on these tools to verify that the correct materials are being deposited in the right layers and that they have the desired characteristics, such as conductivity or insulation. This ensures the chip's performance and reliability.
Chemical Metrology
This part of Nova's business deals with the chemical aspects of semiconductor manufacturing, including analyzing chemical compositions and ensuring the purity of materials used. Imagine a quality control lab that checks the chemical makeup of everything going into a product. For chipmakers, this is vital for processes like etching or plating, where precise chemical reactions are needed. Nova's chemical metrology systems help ensure that the chemical processes are performing as intended, preventing defects and improving the overall quality of the chips.
What management is betting on now
Nova's management is focused on expanding its leadership in metrology and calibration hardware, particularly with its advanced Metrion platform. They are capitalizing on the booming demand for AI-driven semiconductors and advanced packaging technologies. The company is also investing in new facilities and technologies to enhance its dimensional, materials, and chemical metrology capabilities. Management aims to drive continued growth by addressing the increasing complexity in chip manufacturing, such as the adoption of new transistor designs and high-bandwidth memory (HBM) in advanced chips.
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
$218.05M
FY2025 Q4
$217.91M
Revenue
$880.58M
Net income
$259.22M
Diluted EPS
7.96
Operating cash flow
$245.61M
Free cash flow
$217.91M
Fetching…
Sources
Revenue
$672.40M
Net income
$183.76M
Diluted EPS
5.75
Operating cash flow
$235.27M
Free cash flow
$218.05M
Fetching…
Sources
Is it cheap or expensive?
Fair value $159.94 vs current price $321.20
Wall Street consensus is the average analyst price target: $515.12 (222.1% higher than our fair-value estimate).
Our most-likely fair value is $159.94 a share — about 50.2% below today's price of $321.20, so the stock currently looks expensive (overvalued).
Is it drowning in debt?
Healthy
Net cash $217.5M - more cash than debt. Interest coverage 197.4x.
Net debt
$-217.50M
Interest coverage
197.40x
Nova Ltd.'s profit covers its interest bill about 197.4 times over. which is stronger than every peer shown here.
Healthy
Worse cushion
Baseline
Better cushion
NVMI
BASELINE
Nova Ltd.
Total debt $803.50M Interest coverage 197.40x This is the baseline the peer rows are being compared against.
Total debt $7.35B Interest coverage 31.49x -84% vs NVMI Carries about 6.3x less debt cushion than NVMI.
Total debt $6.15B Interest coverage 19.90x -90% vs NVMI Carries about 9.9x less debt cushion than NVMI.
Total debt $4.12B Interest coverage 52.27x -74% vs NVMI Carries about 3.8x less debt cushion than NVMI.
Total debt $2.21B Interest coverage 95.53x -52% vs NVMI Carries about 2.1x less debt cushion than NVMI.
Total debt $1.47B Interest coverage 4.33x -98% vs NVMI Carries about 45.6x less debt cushion than NVMI.
What you should know
The case for and against NVMI
3 Rewards
2 Risks
Rewards
-
Revenue grew 31.0% last year.
-
Returns 21.1% on equity, ahead of 16% of its peers.
-
Free cash flow was positive in 9/10 years.
Risks
-
Stock trades 27.3% above its 5-year average P/E.
-
Insider ownership is only 0.2% (peer median: 0.3%).
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)
40.15x
Forward P/E
23.51x
P/B
6.97x
P/S
10.90x
EV/EBITDA
33.74x
PEG ratio
1.46x
Profitability
How much profit each dollar creates
Gross margin
57.1%
Operating margin
29.9%
Net margin
28.8%
ROE
21.1%
ROA
8.5%
Health
Liquidity and balance-sheet strength
Debt / equity
0.55x
Current ratio
1.55x
Quick ratio
1.31x
Total debt
$803.50M
Total cash
$1.02B
Growth
How the business has been compounding
Revenue TTM
$2.64B
Revenue 5Y CAGR
20.6%
EPS TTM
8.00
EPS 5Y CAGR
21.8%
Cash flow
How much cash the business throws off
Operating CF TTM
$723.95M
Free CF TTM
$217.91M
FCF margin
8.2%
Dividend
Shareholder payout
Yield
0.0%
Payout ratio
0.0%
Last ex-div date
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