Novanta (NOVT) AI Stock Analysis

• Market Cap: $4.48B
• Dividend Yield: N/A
• Average Volume (3M): 239.15K
• Price to Earnings (P/E): 63.8
• Beta (1Y): 1.70
• Revenue Growth: 6.52%
• EPS Growth: 1.60%
• Country: US
• Employees: 3,000
• Sector: Technology
• Sector Strength: 92
• Industry: Hardware, Equipment & Parts
• EPS (TTM): 0.74
• Shares Outstanding: 35,970,833
• 10 Day Avg. Volume: 239,412
• 30 Day Avg. Volume: 239,147
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $139.00
• Price Target Upside: 11.53% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

• Rating: 67 Neutral
• Price Target: $138.00 ▲(10.73%Upside)

Novanta's overall stock score reflects strong financial performance and strategic growth initiatives, offset by high valuation concerns and mixed technical indicators. The company's proactive approach to overcoming challenges is commendable, yet significant risks from trade tariffs and revenue deferrals remain. Investors should weigh these factors carefully.

Positive Factors

Acquisition Impact

The acquisition of Keonn is expected to contribute significantly to Novanta's revenue and EBITDA.

Market Expansion

Recent commentary from several companies operating in Novanta’s end-markets leads to expectations of continued momentum in the company’s medical and robotics/automation businesses.

New Product Success

New product wins—including increased content in existing customers’ systems, new customer acquisitions, and general success of the next-generation insufflator in the marketplace—should drive growth in 2025.

Negative Factors

Budgetary Concerns

The administration’s proposed 44% cut to the NIH’s budget is considered ominous news for Novanta.

Revenue Risk

There is a perceived risk of $35 million in revenue associated with shipments to China.

Trade War Impact

The escalating trade war with China could also result in a greater-than-expected headwind for Novanta in the near term.

Novanta Business Overview & Revenue Model

Company Description

Novanta Inc., together with its subsidiaries, designs, manufactures, markets, and sells photonics, vision, and precision motion components and sub-systems to original equipment manufacturers in the medical and industrial markets worldwide. The company's Photonics segment offers photonics-based solutions, including laser scanning and beam delivery, CO2 laser, solid state laser, ultrafast laser, and optical light engine products serving photonics-based applications for industrial processing, metrology, medical and life science imaging, DNA sequencing, and medical laser procedures. It's Vision segment provides a range of medical grade technologies, including medical insufflators, pumps, and related disposables; visualization solutions; wireless technologies, video recorders, and video integration technologies for operating room integrations; optical data collection and machine vision technologies; radio frequency identification technologies; thermal chart recorders; spectrometry technologies; and embedded touch screen solutions. In addition, its Precision Motion segment offers optical and inductive encoders, precision motors, servo drives and motion control solutions, integrated stepper motors, intelligent robotic end-of-arm technology solutions, air bearings, and air bearing spindles. The company sells its products through its direct sales force, resellers, distributors, and system integrators under the Cambridge Technology, Synrad, Laser Quantum, ARGES, WOM, NDS, NDSsi, Med X Change, Reach Technology, JADAK, ThingMagic, Photo Research, Celera Motion, MicroE, Zettlex, Applimotion, Ingenia, and Westwind brands. The company was formerly known as GSI Group, Inc. and changed its name to Novanta Inc. in May 2016. Novanta Inc. was founded in 1968 and is headquartered in Bedford, Massachusetts.

How the Company Makes Money

Novanta Inc. generates revenue through the sale of its proprietary technology solutions and components primarily to original equipment manufacturers (OEMs) and system integrators. The company's revenue model is centered around its key business segments: Photonics, Vision, and Precision Motion. Each segment comprises an array of products and solutions that cater to specific industry needs, such as laser-based surgical tools in healthcare or precision automation systems in manufacturing. Novanta's growth and earnings are further bolstered by strategic partnerships with industry leaders, acquisitions aimed at expanding its technological capabilities and market reach, and a strong focus on research and development to drive innovation. The company benefits from a global customer base, which contributes to diversified revenue streams and reduces dependency on any single market or client.

Novanta Financial Statement Overview

Summary

Novanta demonstrates commendable financial health with strong revenue growth, stable margins, and effective cash flow management. The company's balance sheet is stable with moderate leverage, strong equity ratios, and efficient cash conversion, positioning it well within the industry.

Income Statement

Novanta shows strong income statement performance with a consistent upward trajectory in revenue, growing from $590.6M in 2020 to $951.7M TTM. Gross profit margins have remained stable, sustaining around 44% in TTM, and EBIT margins are healthy at 12.3% TTM. The net profit margin is 7.4% TTM, indicating a robust bottom line, though slightly lower than previous periods due to increased expenses. Overall, the company demonstrates solid profitability and growth.

Balance Sheet

The balance sheet of Novanta reflects moderate leverage with a debt-to-equity ratio of 0.58 TTM, showing improved equity stability. Stockholders' equity has been increasing, reinforcing the equity ratio at 55.5% TTM, indicating financial stability. Return on equity is strong at 9.2% TTM, showcasing efficient use of equity to generate profits. The balance sheet indicates a healthy financial standing with a good balance of debt and equity.

Cash Flow

Cash flow analysis reveals strong free cash flow generation with a notable $141.5M TTM, reflecting a significant increase from prior years. The operating cash flow to net income ratio is healthy at 2.2 TTM, indicating efficient cash conversion. The free cash flow to net income ratio stands at 2.0 TTM, underscoring effective cash management. While operating cash flow slightly decreased recently, the cash flow position remains strong overall.

Breakdown
Income Statement
Total Revenue
Gross Profit
EBITDA
Net Income
Balance Sheet
Total Assets
Cash, Cash Equivalents and Short-Term Investments
Total Debt
Total Liabilities
Stockholders Equity
Cash Flow
Free Cash Flow
Operating Cash Flow
Investing Cash Flow
Financing Cash Flow

Novanta Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 124.63
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Positive
• 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 124.63 is below the 20-day moving average (MA) of 128.27, below the 50-day MA of 126.55, and below the 200-day MA of 143.08, indicating a neutral trend. The MACD of -0.40 indicates Positive momentum. The RSI at 51.13 is Neutral, neither overbought nor oversold. The STOCH value of 48.95 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
ESE	77 Outperform	$4.93B	41.80	9.66%	0.17%	8.40%	20.03%
VNT	75 Outperform	$5.88B	16.20	35.88%	0.25%	-3.59%	-11.30%
MKSI	74 Outperform	$6.67B	29.65	9.50%	0.88%	-1.14%	―
CGNX	71 Outperform	$5.72B	49.84	8.02%	0.92%	8.56%	18.99%
PLXS	68 Neutral	$3.34B	20.97	12.12%	―	2.31%	48.63%
NOVT	67 Neutral	$4.48B	63.76	9.73%	―	6.52%	1.60%
Sector *	50 Neutral	C$3.11B	2.54	-63.57%	2.26%	4.49%	-6.15%

Novanta Corporate Events

Novanta Announces Departure of General Counsel

On July 8, 2025, Novanta Inc. announced that Michele D. Welsh would no longer serve as General Counsel and Corporate Secretary, effective July 18, 2025, or an earlier agreed date. There are no changes to the severance terms outlined in her employment agreement, ensuring continuity in her departure process.

The most recent analyst rating on (NOVT) stock is a Hold with a $160.00 price target. To see the full list of analyst forecasts on Novanta stock, see the NOVT Stock Forecast page.

Novanta Secures $1 Billion Credit Facility Agreement

On June 27, 2025, Novanta Inc. and its subsidiaries entered into a Fourth Amended and Restated Credit Agreement with several financial institutions, including Bank of America and JP Morgan Chase, to establish a $1.0 billion credit facility. This new agreement replaces the previous credit agreement scheduled to mature in March 2027 and includes a €65.31 million euro-denominated term loan, a $75.0 million U.S. dollar-denominated term loan, and an $850.0 million revolving credit facility, all maturing in June 2030. The agreement allows for an additional $350.0 million increase in commitments under certain conditions and includes various financial covenants and obligations, such as maintaining specific leverage ratios and asset security.

The most recent analyst rating on (NOVT) stock is a Hold with a $160.00 price target. To see the full list of analyst forecasts on Novanta stock, see the NOVT Stock Forecast page.

Novanta Announces Restructuring Plan to Streamline Operations

On June 3, 2025, Novanta Inc. announced a restructuring plan aimed at streamlining operations and aligning with long-term goals. The plan includes regionalizing manufacturing, closing certain sites, and implementing cost-saving strategies, with an estimated $20 million to $25 million in pre-tax charges and anticipated annual savings of $20 million once completed. The restructuring is expected to be substantially completed within 18 months, although actual results may vary due to various risks and uncertainties.

The most recent analyst rating on (NOVT) stock is a Hold with a $160.00 price target. To see the full list of analyst forecasts on Novanta stock, see the NOVT Stock Forecast page.