Nordson (NDSN) AI Stock Analysis

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Nordson

(NASDAQ:NDSN)

Rating:71Outperform

Price Target:

$217.00

▲( 12.21% Upside)

Nordson displays strong financial performance and operational efficiency, which are its main strengths. However, mixed technical indicators, a high P/E ratio, and challenges in key segments moderate the overall score. The leadership transition provides a positive outlook for future growth.

Positive Factors

Investment Recommendation

Analyst is upgrading NDSN to Overweight, highlighting it as an opportune time to invest due to accelerating orders across the business, especially in Electronics.

Valuation

Despite recent share price declines, NDSN's valuation is at the low end of its historical range, presenting a positive risk/reward scenario.

Negative Factors

Foreign Exchange

Foreign exchange has moved unfavorably, with the strengthening U.S. dollar presenting a headwind to sales and earnings forecasts.

Guidance Challenges

The upper end of guidance will prove challenging to achieve without an inflection in end market demand and we see fewer catalysts in the near term for top-line acceleration.

Nordson (NDSN) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$11.15B

Dividend Yield1.54%

Average Volume (3M)334.52K

Price to Earnings (P/E)24.9

Beta (1Y)1.12

Revenue Growth0.78%

EPS Growth-8.42%

CountryUS

Employees8,000

SectorIndustrials

Sector Strength92

IndustryIndustrial - Machinery

Share Statistics

EPS (TTM)2.06

Shares Outstanding56,911,740

10 Day Avg. Volume293,228

30 Day Avg. Volume334,520

Financial Highlights & Ratios

PEG Ratio-7.63

Price to Book (P/B)3.83

Price to Sales (P/S)0.00

P/FCF Ratio23.59

Enterprise Value/Market Cap1.18

Enterprise Value/Revenue1.23

Enterprise Value/Gross Profit8.91

Enterprise Value/Ebitda4.05

Forecast

1Y Price Target

$255.00

Price Target Upside31.86% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering2

Nordson Business Overview & Revenue Model

Company DescriptionNordson Corporation (NDSN) is a global leader in the engineering, manufacturing, and marketing of differentiated products and systems used for precision dispensing, fluid management, and related processes. The company serves a diverse range of sectors, including packaging, electronics, medical, and industrial markets. With innovative solutions, Nordson enables its customers to improve productivity and enhance product performance.

How the Company Makes MoneyNordson Corporation generates revenue through the sale of its high-performance machinery and systems that are crucial in various production processes. Its key revenue streams include the dispensing systems for adhesives, coatings, sealants, biomaterials, and other fluids used in manufacturing. Nordson also earns money from the aftermarket support services, including parts, repairs, and maintenance contracts, which ensure the longevity and optimal performance of its equipment. Moreover, strategic partnerships with leading companies in high-growth industries and continuous investment in research and development contribute significantly to its earnings by allowing Nordson to innovate and meet the evolving needs of its customers.

Nordson Financial Statement Overview

Summary

Nordson displays a strong financial position with solid profitability, evidenced by a Gross Profit Margin of 55.1% and a Net Profit Margin of 16.9%. The company maintains efficient cash flow management, although revenue growth has slightly decelerated. Balance sheet metrics remain stable with a manageable Debt-to-Equity Ratio of 0.76.

Income Statement

Very Positive

Nordson demonstrates solid profitability with a strong Gross Profit Margin of 55.1% and a Net Profit Margin of 16.9% in the TTM period. The company's EBIT Margin is healthy at 24.5%, and the EBITDA Margin is 28.4%. However, the revenue growth has slightly decelerated in the latest TTM, with a minor decline of 0.7% compared to the previous year.

Balance Sheet

Positive

The balance sheet reveals a stable structure with a manageable Debt-to-Equity Ratio of 0.76, indicating a moderate level of leverage. Return on Equity is impressive at 15.7%, reflecting efficient use of equity capital. The Equity Ratio stands at 57.5%, suggesting a strong equity base relative to total assets.

Cash Flow

Positive

The company's cash flow position is robust, with a Free Cash Flow to Net Income Ratio of 1.03, indicating effective cash generation relative to net income. The Operating Cash Flow to Net Income Ratio is 1.20, demonstrating efficient conversion of net income into cash. Despite a slight decrease in Free Cash Flow compared to the previous year, cash flow metrics remain healthy.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
2.67B	2.69B	2.63B	2.59B	2.36B	2.12B
	Gross Profit
1.47B	1.49B	1.43B	1.43B	1.32B	1.13B
	EBIT
655.51M	674.00M	672.76M	702.36M	615.13M	349.55M
	EBITDA
797.34M	810.58M	786.74M	771.62M	703.55M	446.95M
	Net Income Common Stockholders
452.36M	467.28M	487.49M	513.10M	454.37M	249.54M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
130.42M	115.95M	115.68M	163.46M	299.97M	208.29M
	Total Assets
5.87B	6.00B	5.25B	3.82B	3.79B	3.67B
	Total Debt
2.30B	2.32B	1.86B	737.86M	815.90M	1.11B
	Net Debt
2.16B	2.20B	1.75B	574.40M	515.92M	897.70M
	Total Liabilities
2.99B	3.07B	2.65B	1.53B	1.63B	1.92B
	Stockholders Equity
2.88B	2.93B	2.60B	2.29B	2.16B	1.76B
Cash Flow		Free Cash Flow
464.68M	491.78M	606.70M	461.70M	507.62M	451.89M
	Operating Cash Flow
542.96M	556.19M	641.28M	513.13M	545.93M	502.42M
	Investing Cash Flow
-852.95M	-844.40M	-1.44B	-222.76M	-33.17M	-194.11M
	Financing Cash Flow
307.40M	294.50M	750.51M	-416.01M	-422.91M	-251.53M

Nordson Technical Analysis

Technical Analysis Sentiment

Negative

Last Price193.38

Price Trends

50DMA

193.86

Negative

100DMA

202.96

Negative

200DMA

224.88

Negative

Market Momentum

MACD

1.94

Positive

RSI

47.12

Neutral

STOCH

18.76

Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NDSN, the sentiment is Negative. The current price of 193.38 is below the 20-day moving average (MA) of 195.56, below the 50-day MA of 193.86, and below the 200-day MA of 224.88, indicating a bearish trend. The MACD of 1.94 indicates Positive momentum. The RSI at 47.12 is Neutral, neither overbought nor oversold. The STOCH value of 18.76 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for NDSN.

Nordson Risk Analysis

Nordson disclosed 24 risk factors in its most recent earnings report. Nordson reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Nordson Peers Comparison

Overall Rating

UnderperformOutperform

Sector (64)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ITT	82 Outperform	$11.60B	23.45	19.27%	0.88%	6.99%	23.25%
PNR	78 Outperform	$16.07B	25.18	18.59%	0.98%	-0.42%	3.23%
IEX	75 Outperform	$13.57B	28.45	12.73%	1.52%	1.66%	-17.18%
GGG	74 Outperform	$13.98B	29.51	20.28%	1.25%	-0.40%	-2.50%
NDSN	71 Outperform	$11.15B	24.94	16.15%	1.54%	0.78%	-8.42%
RRX	68 Neutral	$8.91B	38.28	3.69%	1.04%	-10.19%	―
Sector *	64 Neutral	$4.39B	11.81	5.20%	249.38%	3.96%	-12.36%

* Industrials Sector Average

Performance Comparison

NDSN

Nordson

193.38

-37.76

-16.34%

GGG

Graco

83.64

5.11

6.51%

IEX

IDEX

179.60

-28.78

-13.81%

ITT

147.35

15.29

11.58%

PNR

Pentair

96.79

18.68

23.91%

RRX

Regal Rexnord

134.38

-10.24

-7.08%

Nordson Earnings Call Summary

Earnings Call Date:Feb 19, 2025

(Q1-2025)

% Change Since: -10.85%|

Next Earnings Date:May 28, 2025

Earnings Call Sentiment Neutral

The earnings call presented a mixed picture with strong operational performance, notable achievements in order entry growth, and successful integration of the Atrion acquisition. However, these positives were offset by a decline in sales and challenges in key segments such as electronics and medical interventional product lines. The company remains confident in its ability to manage costs and capitalize on growth opportunities as demand improves.

Q1-2025 Updates

Positive Updates

Strong Operational Performance

Nordson's team delivered a 56% gross margin, 26% operating profit margin, and 31% EBITDA margin, with free cash flow conversion at nearly 150% of net income.

Order Entry and Backlog Growth

Order entry rates accelerated throughout the quarter, growing double digits above the prior year order entry run rate. The backlog increased by approximately $85 million, ending at approximately $670 million.

Atrion Acquisition Success

The Atrion acquisition delivered $53 million in revenue, with the integration ahead of initial targets for profitability improvements.

Industry Recognitions and Awards

Nordson's SpinSAM Acoustic Inspection system and QuadraPro manual X-ray System received multiple industry awards for innovation and performance.

Positive Outlook in Electronics

Despite a slow start, orders in the Advanced Technology Solutions segment were up double digits, with backlog growing sequentially.

Negative Updates

Sales Decline in Key Segments

First quarter 2025 sales were $615 million, down 3% from the prior year. This was driven by a 9% organic sales decrease and a 2% unfavorable currency translation.

Weak Demand in Electronics and Industrial Markets

Soft demand in key end markets, particularly electronics and industrial, contributed to sales being at the low end of the guidance range.

Increased Interest Expenses

Net interest expense increased by $5 million versus the prior year due to higher debt levels tied to the Atrion acquisition.

Medical Interventional Product Line Challenges

Double-digit declines in medical interventional product lines due to destocking trends and strategic program rationalization impacted demand.

Advanced Technology Solutions Segment Decline

Advanced Technology Solutions sales were $121 million, an 11% decrease compared to the prior year first quarter, driven by declines in electronics processing and x-ray product lines.

Company Guidance

During the Nordson Corporation's first-quarter fiscal year 2025 conference call, the company reported sales of $615 million, which was at the low end of their guidance range due to weak demand in key markets such as electronics and industrial, and unfavorable foreign exchange rates. However, the company experienced positive order entry rates, which grew double digits from the previous year, resulting in an $85 million increase in backlog, ending at approximately $670 million. Despite weaker sales, Nordson achieved a gross margin of 56%, an operating profit margin of 26%, and an EBITDA margin of 31%. The company converted free cash flow at nearly 150% of net income and adjusted earnings per share were $2.06, slightly above the midpoint of their guidance. Nordson also repurchased $60 million in shares, paid $45 million in dividends, and reduced their net leverage ratio to 2.4x. For the second quarter of fiscal 2025, the company provided guidance for sales between $650 million to $690 million and adjusted earnings per share ranging from $2.30 to $2.50.

Nordson Corporate Events

Executive/Board ChangesBusiness Operations and Strategy

Nordson Announces Leadership Transition in Medical Segment

Positive

Apr 29, 2025

On April 28, 2025, Nordson Corporation announced a leadership transition in its Medical and Fluid Solutions segment, with Justin Hall promoted to Executive Vice President and segment leader, succeeding Stephen Lovass. Hall, who joined Nordson in 2006, has a strong track record and expertise in deploying the NBS Next growth framework, positioning the company for organic growth in multiple end markets. The transition aims to capitalize on market opportunities in the medical sector, which is driven by long-term growth factors such as an aging population and increasing healthcare spending.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.