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Novanta
(NASDAQ:NOVT)
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Rating:69Neutral
Price Target:
$159.00
▲(12.34% Upside)
Action:Downgraded
Date:08/07/26
NOVT scores well on financial quality (strong balance sheet improvement and a meaningful rebound in free cash flow) and is supported by a positive earnings call with raised guidance and continued growth/margin targets. The score is held back primarily by very expensive valuation (P/E ~102, no dividend support) and only mixed technical signals (negative MACD and elevated stochastic despite otherwise neutral RSI).
Positive Factors
Raised growth and earnings outlook
Higher guidance reflects broad-based organic growth, acquisition contribution and improving operating performance. Continued revenue expansion and expected EBITDA growth provide a durable foundation for earnings over the next several quarters.
Negative Factors
Persistent profitability pressure
Lower operating and medical margins show that revenue growth is not yet translating proportionally into profit. Mix toward lower-margin products, transformation costs and site rationalization could constrain margin recovery over the next several quarters.
Read all positive and negative factors
Positive Factors
Negative Factors
Raised growth and earnings outlook
Higher guidance reflects broad-based organic growth, acquisition contribution and improving operating performance. Continued revenue expansion and expected EBITDA growth provide a durable foundation for earnings over the next several quarters.
Read all positive factors
Novanta Key Performance Indicators (KPIs)
Any
Revenue by Geography
Breaks down revenue across regions, revealing where Novanta earns its sales and how exposed the company is to local demand cycles, regulatory differences, or currency swings. Helps gauge growth opportunities in different markets and identify concentration risk if a large share comes from one region.
Breaks down revenue across regions, revealing where Novanta earns its sales and how exposed the company is to local demand cycles, regulatory differences, or currency swings. Helps gauge growth opportunities in different markets and identify concentration risk if a large share comes from one region.
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The Fly
The FlyNovanta (NOVT) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$5.50B
Dividend YieldN/A
Average Volume (3M)529.02K
Price to Earnings (P/E)91.3
Beta (1Y)1.73
Revenue Growth7.61%
EPS Growth-7.28%
CountryUS
Employees3,000
SectorTechnology
Sector Strength88
IndustryHardware, Equipment & Parts
Share Statistics
EPS (TTM)1.59
Shares Outstanding37,817,770
10 Day Avg. Volume382,665
30 Day Avg. Volume529,021
Financial Highlights & Ratios
PEG Ratio-4.65
Price to Book (P/B)3.31
Price to Sales (P/S)4.44
P/FCF Ratio89.90
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$194.00Price Target Upside37.06% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
EPS Forecast (FY)3.59
Revenue Forecast (FY)$1.05B
Novanta Business Overview & Revenue Model
Company Description
Operating globally, Novanta Inc. and its affiliated companies specialize in the development, production, and distribution of advanced photonics, vision, and precision motion components and sub-assemblies. These highly engineered solutions are supp...
How the Company Makes Money
Novanta makes money primarily by selling engineered components and subsystems to OEM customers who incorporate them into their end products. Revenue is generated from (1) product sales of motion/precision technologies (e.g., motors, encoders, driv...
Novanta Earnings Call Summary
Earnings Call Date:Aug 05, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 10, 2026
Earnings Call Sentiment Positive
Overall the call was positive: management reported broad-based organic growth, margin expansion, strong cash generation, significant new product momentum, and closed an accretive strategic acquisition (Riverpoint) that raises guidance. There are manageable near-term headwinds — lower medical segment margins from mix and transformation costs, supply-chain/tariff pressures, integration and restructuring expenses, and a temporary rise in gross leverage from acquisition financing — but management provided clear plans and guidance to offset these over time. The highlights materially outweigh the lowlights.Positive Updates
Solid top-line and margin expansion in Q2
Q2 organic sales growth of 9% (10% reported), adjusted gross margin of 47% (up 100 basis points year-over-year) and adjusted EBITDA growth of 16%. Adjusted EPS grew 17% to $0.89 and adjusted EBITDA was $60.7 million (nearly 23% margin, up ~120 bps year-over-year).
Negative Updates
Medical Solutions margin pressure
Medical Solutions adjusted gross margin ~41%, down 290 basis points year-over-year and down 230 basis points sequentially. Decline driven by a higher mix of lower-margin precision medicine products and temporary costs from operational transformation and site rationalization.
Read all updates
Q2-2026 Updates
Positive
Negative
Solid top-line and margin expansion in Q2
Q2 organic sales growth of 9% (10% reported), adjusted gross margin of 47% (up 100 basis points year-over-year) and adjusted EBITDA growth of 16%. Adjusted EPS grew 17% to $0.89 and adjusted EBITDA was $60.7 million (nearly 23% margin, up ~120 bps year-over-year).
Read all positive updates
Company Guidance
Novanta raised its full‑year 2026 outlook to about $1.13–$1.14 billion in GAAP revenue (reported growth >15%, organic up to ~7%), with adjusted EBITDA of $273–$278 million (up 24–26% YoY) and adjusted diluted EPS of $3.68–$3.74 (up 12–14%), noting roughly $25 million of adjusted EBITDA from the Riverpoint acquisition; for Q3 management expects revenue of $300–$304 million (reported +21–23%, organic +7–9%), adjusted EBITDA of $74–$77 million (≈25% margin, +27–33% YoY) and adjusted diluted EPS of $0.95–$1.00. They guide Q3 adjusted gross margin of ~48% (full‑year ~47%), Q3 operating expenses of $80–$82 million (~26–27% of sales; full year 27–28%), Q3 depreciation ≈$6M (FY just over $19M), Q3 stock comp ≈$9M (FY just over $37M), Q3 net interest ≈$9M, a Q3 non‑GAAP tax rate ≈22% (FY ≈21%), diluted shares ≈43M, and pro forma gross debt just north of $800M with ~2.7x gross leverage (net leverage modestly lower); they also flagged that cash‑flow conversion will step down in Q3 due to the Riverpoint transaction.Novanta Financial Statement Overview
Summary
Income Statement
72
Positive
Balance Sheet
80
Positive
Cash Flow
86
Very Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.03B | 980.60M | 949.25M | 881.66M | 860.90M | 706.79M |
| Gross Profit | 437.85M | 407.81M | 421.55M | 399.90M | 378.47M | 300.33M |
| EBITDA | 139.60M | 153.05M | 179.86M | 169.92M | 160.62M | 125.47M |
| Net Income | 61.76M | 53.83M | 64.09M | 72.88M | 74.05M | 50.33M |
Balance Sheet | ||||||
| Total Assets | 2.14B | 1.81B | 1.39B | 1.23B | 1.24B | 1.23B |
| Cash, Cash Equivalents and Short-Term Investments | 718.65M | 380.87M | 113.99M | 105.05M | 100.11M | 117.39M |
| Total Debt | 282.82M | 341.61M | 471.00M | 404.56M | 489.38M | 493.40M |
| Total Liabilities | 523.11M | 492.82M | 642.81M | 552.60M | 663.63M | 706.59M |
| Stockholders Equity | 1.62B | 1.31B | 745.70M | 673.46M | 577.59M | 521.29M |
Cash Flow | ||||||
| Free Cash Flow | 114.28M | 48.43M | 141.35M | 100.11M | 71.14M | 72.45M |
| Operating Cash Flow | 133.84M | 64.06M | 158.51M | 120.08M | 90.78M | 94.63M |
| Investing Cash Flow | -20.27M | -74.32M | -208.19M | -19.89M | -42.54M | -306.70M |
| Financing Cash Flow | 494.70M | 276.33M | 56.94M | -97.85M | -60.15M | 204.75M |
Novanta Technical Analysis
Negative
141.54
Price Trends
153.64
Negative
147.28
Negative
135.96
Positive
Market Momentum
0.40
Positive
40.76
Neutral
4.95
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NOVT, the sentiment is Negative. The current price of 141.54 is below the 20-day moving average (MA) of 154.36, below the 50-day MA of 153.64, and above the 200-day MA of 135.96, indicating a neutral trend. The MACD of 0.40 indicates Positive momentum. The RSI at 40.76 is Neutral, neither overbought nor oversold. The STOCH value of 4.95 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for NOVT.
Novanta Risk Analysis
Novanta disclosed 38 risk factors in its most recent earnings report. Novanta reported the most risks in the "Legal & Regulatory" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Novanta Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $7.37B | 23.66 | 19.97% | 0.10% | 16.55% | 23.43% | |
71 Outperform | $9.57B | 62.87 | 19.83% | ― | 24.95% | 120.02% | |
69 Neutral | $5.50B | 91.35 | 4.90% | ― | 7.61% | -7.28% | |
69 Neutral | $6.45B | 34.70 | 12.46% | ― | 14.20% | 15.36% | |
68 Neutral | $3.59B | 22.37 | 17.59% | ― | 4.25% | ― | |
64 Neutral | $6.10B | 67.98 | 3.18% | 1.05% | 0.32% | -18.53% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% |
* Technology Sector Average
NOVT
Novanta
145.24
26.51
22.33%
ESE
Esco Technologies
287.24
93.74
48.45%
OSIS
OSI Systems
206.73
-18.46
-8.20%
PLXS
Plexus
240.14
103.10
75.23%
ST
Sensata
42.83
10.16
31.09%
VICR
Vicor
200.54
149.84
295.54%
Novanta Corporate Events
Business Operations and StrategyM&A TransactionsPrivate Placements and Financing
Novanta Completes Riverpoint Medical Acquisition to Boost Growth
Positive
Jul 27, 2026
On July 23, 2026, Novanta completed its previously announced acquisition of Riverpoint Medical from Arlington Capital Partners through an equity purchase of Runway Buyer, LLC for approximately $1.2 billion in cash, plus a potential $250 million mi...
Private Placements and FinancingRegulatory Filings and Compliance
Novanta Announces $300 Million Private Share Placement
Neutral
Jun 9, 2026
On June 8, 2026, Novanta entered into a securities purchase agreement for a private placement of 2,142,857 common shares to institutional and other accredited investors at $140 per share, for expected gross proceeds of about $300 million. Assuming...
Business Operations and StrategyM&A TransactionsPrivate Placements and Financing
Novanta to Acquire Riverpoint Medical in Strategic Deal
Positive
Jun 9, 2026
On June 8, 2026, Novanta agreed to acquire Riverpoint Medical, a category leader in minimally invasive surgical consumables, for $1.2 billion in upfront cash plus a $250 million milestone payment due by early 2027, with closing expected in the thi...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.