Novanta (NOVT) AI Stock Analysis

• Market Cap: $4.30B
• Dividend Yield: N/A
• Average Volume (3M): 757.52K
• Price to Earnings (P/E): 83.7
• Beta (1Y): 1.66
• Revenue Growth: 4.07%
• EPS Growth: -12.34%
• Country: US
• Employees: 3,000
• Sector: Technology
• Sector Strength: 88
• Industry: Hardware, Equipment & Parts
• EPS (TTM): 0.87
• Shares Outstanding: 35,775,124
• 10 Day Avg. Volume: 404,194
• 30 Day Avg. Volume: 757,525
• PEG Ratio: -6.96
• Price to Book (P/B): 7.37
• Price to Sales (P/S): 5.79
• P/FCF Ratio: 38.85
• Enterprise Value/Market Cap: 0.94
• Enterprise Value/Revenue: 4.21
• Enterprise Value/Gross Profit: 9.40
• Enterprise Value/Ebitda: 23.59
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1
• EPS Forecast (FY): 3.28
• Revenue Forecast (FY): $975.55M

• Rating: 70 Neutral
• Price Target: $127.00 ▲(3.79% Upside)

Novanta's strong financial performance and positive earnings call are offset by high valuation and neutral technical indicators. The company's strategic initiatives and corporate events provide a positive outlook, but challenges in cash flow and valuation remain significant.

Positive Factors

Revenue Growth

Record revenue growth indicates strong market demand and effective sales strategies, supporting long-term business expansion.

New Product Launches

Frequent new product launches demonstrate innovation and adaptability, enhancing competitive positioning and future revenue streams.

Strategic Flexibility

Strengthening the balance sheet through equity issuance provides financial flexibility for strategic investments and acquisitions.

Negative Factors

Organic Revenue Decline

Organic revenue decline suggests potential challenges in core business areas, which could impact long-term growth if not addressed.

Declining Cash Flow

Declining cash flow growth may limit the company's ability to invest in new opportunities and manage financial obligations effectively.

Margin Compression

Margin compression indicates rising costs or competitive pressures, which could erode profitability if not managed efficiently.

Novanta Business Overview & Revenue Model

Company Description

Novanta Inc. (NASDAQ: NOVT) is a leading provider of precision photonics and motion control solutions, primarily serving the medical and industrial sectors. The company specializes in the design and manufacturing of advanced technology components and systems that enable high-performance applications, including laser and imaging systems, motion control, and optical solutions. Novanta's core products include laser systems, optical components, and motion control systems, which are essential in various applications such as medical devices, semiconductor equipment, and industrial automation.

How the Company Makes Money

Novanta generates revenue through the sale of its precision components and systems, focusing on high-margin products that cater to specialized markets. The company's key revenue streams include sales of laser and imaging systems, motion control solutions, and optical products. Additionally, Novanta benefits from recurring revenue through service contracts and maintenance agreements for their systems. Strategic partnerships with leading companies in the medical and industrial sectors enhance its market position, while ongoing investments in research and development allow for innovation and the introduction of new technologies, further contributing to its earnings.

Novanta Financial Statement Overview

Summary

Novanta shows strong revenue growth and operational efficiency with stable margins and a solid balance sheet. However, declining cash flow metrics and slight margin compression suggest areas for improvement.

Income Statement

Novanta's income statement shows strong revenue growth with a 35.9% increase in TTM, indicating robust demand and market presence. The gross profit margin of 44.8% and net profit margin of 6.4% are healthy, though slightly below industry leaders. EBIT and EBITDA margins are solid at 12.6% and 18.6%, respectively, reflecting efficient operations. However, the decline in EBIT and EBITDA margins compared to the previous year suggests rising costs or competitive pressures.

Balance Sheet

The balance sheet is stable with a debt-to-equity ratio of 0.64, indicating moderate leverage. Return on equity is 8.0%, which is decent but shows a decline from previous years, suggesting a need for improved profitability. The equity ratio of 53.2% indicates a strong capital structure, providing a buffer against financial volatility.

Cash Flow

Cash flow analysis reveals a decline in free cash flow growth by 12.9% in TTM, which could be a concern for future investments. The operating cash flow to net income ratio of 0.72 suggests adequate cash generation relative to earnings, but the decrease from previous periods indicates potential cash flow management issues. The free cash flow to net income ratio remains strong at 0.90, highlighting efficient conversion of earnings to cash.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	960.31M	949.25M	881.66M	860.90M	706.79M	590.62M
Gross Profit	430.25M	421.55M	399.90M	378.47M	300.33M	244.52M
EBITDA	171.53M	179.86M	169.92M	160.62M	125.47M	97.99M
Net Income	52.82M	64.09M	72.88M	74.05M	50.33M	44.52M
Balance Sheet
Total Assets	1.51B	1.39B	1.23B	1.24B	1.23B	865.18M
Cash, Cash Equivalents and Short-Term Investments	89.22M	113.99M	105.05M	100.11M	117.39M	125.05M
Total Debt	505.28M	471.00M	404.56M	489.38M	493.40M	255.05M
Total Liabilities	704.34M	642.81M	552.60M	663.63M	706.59M	388.37M
Stockholders Equity	801.48M	745.70M	673.46M	577.59M	521.29M	476.81M
Cash Flow
Free Cash Flow	102.61M	141.35M	100.11M	71.14M	72.45M	129.72M
Operating Cash Flow	116.81M	158.51M	120.08M	90.78M	94.63M	140.24M
Investing Cash Flow	-72.78M	-208.19M	-19.89M	-42.54M	-306.70M	-13.16M
Financing Cash Flow	-46.94M	56.94M	-97.85M	-60.15M	204.75M	-84.36M

Novanta Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 122.36
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NOVT, the sentiment is Positive. The current price of 122.36 is above the 20-day moving average (MA) of 117.25, above the 50-day MA of 115.10, and above the 200-day MA of 119.32, indicating a bullish trend. The MACD of 2.47 indicates Negative momentum. The RSI at 60.97 is Neutral, neither overbought nor oversold. The STOCH value of 58.56 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for NOVT.

Novanta Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
OSIS	76 Outperform	$4.67B	30.25	17.58%	―	9.37%	15.70%
PLXS	75 Outperform	$4.11B	24.54	12.44%	―	1.82%	56.52%
VICR	73 Outperform	$4.96B	59.69	13.89%	―	11.55%	1745.46%
NOVT	70 Neutral	$4.30B	83.65	6.84%	―	4.07%	-12.34%
ESE	70 Neutral	$5.19B	41.68	8.93%	0.16%	13.13%	24.02%
ST	63 Neutral	$4.95B	―	-0.92%	1.41%	-8.07%	63.50%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%

Novanta Corporate Events

Novanta Appoints New General Counsel Manganiello

Novanta Inc. has appointed Alexander Manganiello as General Counsel and Corporate Secretary, effective December 1, 2025. This strategic appointment brings Manganiello’s extensive 30-year legal experience to the company, potentially strengthening its global legal and regulatory framework, which may enhance Novanta’s industry positioning.

Novanta Revises Q4 2025 Financial Guidance Post Equity Issuance

Novanta Inc. has revised its financial guidance for the fourth quarter and full year 2025 following a recent equity issuance. The updated non-GAAP adjusted diluted earnings per share (EPS) guidance is now set at $0.84 to $0.91 for the fourth quarter and $3.21 to $3.28 for the full year, slightly lower than the previous guidance. The company’s GAAP revenue and Adjusted EBITDA guidance remain unchanged. This adjustment reflects the impact of an increased number of diluted shares outstanding, estimated to be between 2.5 million and 2.6 million for the fourth quarter and between 0.6 million and 0.7 million for the full year. The revision indicates a strategic response to the equity issuance, potentially affecting stakeholders’ expectations and the company’s market positioning.

Novanta Sells Equity Units to Strengthen Balance Sheet

On November 6, 2025, Novanta entered into an underwriting agreement to sell 11,000,000 tangible equity units at $50.00 per unit, with an over-allotment option for an additional 1,650,000 units, which was fully exercised by the underwriters on November 7, 2025. The units, issued on November 12, 2025, comprise prepaid stock purchase contracts and senior amortizing notes. The proceeds from this offering are intended to strengthen Novanta’s balance sheet, fund working capital, potential acquisitions, investments, and other corporate purposes. Additionally, Novanta amended its credit agreement to increase leverage ratio limits and cash netting against consolidated indebtedness, contingent upon issuing tangible equity units by December 31, 2025.

Novanta Board Member Barbara Hulit Resigns

On September 15, 2025, Barbara Hulit announced her resignation from the Board of Directors and several committees of Novanta Inc., effective November 1, 2025. Her resignation was not due to any disagreements with the company’s operations, policies, or practices.