Novanta (NOVT)
NASDAQ:NOVT
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Novanta
(NASDAQ:NOVT)
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Rating:62Neutral
Price Target:
$125.00
▲(5.83% Upside)
Action:ReiteratedDate:02/24/26
The score is anchored by solid financial foundations (notably deleveraging) and constructive technical momentum, plus a bullish FY2026 outlook for margin and cash flow recovery from management. These positives are offset by the weak 2025 cash flow performance and a very expensive valuation (high P/E), which raises downside sensitivity if execution on the cash and margin rebound falls short.
Positive Factors
Deleveraging & Net Cash Position
Novanta's materially improved leverage and expanded equity in 2025 signal a stronger capital structure and lower financing risk. A healthier balance sheet increases durable financial flexibility to fund R&D, absorb shocks, and pursue strategic investments or acquisitions without urgent refinancing needs.
Negative Factors
Weakened Operating & Free Cash Flow
A sharp drop in operating and free cash flow materially reduces financial flexibility and the cushion for capex, working capital needs, and M&A. If cash conversion doesn't recover as guided, the company may need to reallocate capital or delay investments, weakening longer‑term growth options.
Read all positive and negative factors
Positive Factors
Negative Factors
Deleveraging & Net Cash Position
Novanta's materially improved leverage and expanded equity in 2025 signal a stronger capital structure and lower financing risk. A healthier balance sheet increases durable financial flexibility to fund R&D, absorb shocks, and pursue strategic investments or acquisitions without urgent refinancing needs.
Read all positive factors
Novanta (NOVT) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$4.21B
Dividend YieldN/A
Average Volume (3M)426.49K
Price to Earnings (P/E)80.9
Beta (1Y)1.68
Revenue Growth4.07%
EPS Growth-12.34%
CountryUS
Employees3,000
SectorTechnology
Sector Strength88
IndustryHardware, Equipment & Parts
Share Statistics
EPS (TTM)0.91
Shares Outstanding35,683,770
10 Day Avg. Volume381,624
30 Day Avg. Volume426,486
Financial Highlights & Ratios
PEG Ratio-4.64
Price to Book (P/B)3.31
Price to Sales (P/S)4.44
P/FCF Ratio89.90
Enterprise Value/Market Cap0.99
Enterprise Value/Revenue4.27
Enterprise Value/Gross Profit9.61
Enterprise Value/Ebitda25.08
Forecast
1Y Price Target
$144.00Price Target Upside21.92% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
EPS Forecast (FY)3.61
Revenue Forecast (FY)$1.04B
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 com...
How the Company Makes Money
Novanta makes money primarily by selling engineered components, modules, and subsystems to OEM customers that incorporate Novanta technology into their own branded equipment. Revenue is generated from (1) product sales of photonics and laser-relat...
Novanta Key Performance Indicators (KPIs)
Any
Revenue by Geography
Data provided by:
The Fly
The FlyNovanta Earnings Call Summary
Earnings Call Date:Feb 23, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 12, 2026
Earnings Call Sentiment Positive
The call featured strong operational momentum: record revenue, broad-based double-digit bookings, significant new product traction, improved backlog, adjusted EBITDA and EPS growth, a net cash position, and robust 2026 guidance (revenue, margins, EBITDA, and cash flow). The main negatives were temporary and operational: Q4 margin compression, higher working capital and inventory from prioritized customer deliveries and regional manufacturing transfers, and a sharp Q4 cash flow decline. Management provided clear remediation actions (cost adjustments in January, completion of transfers by end of Q2) and reiterated confidence in margin expansion and cash rebound in 2026. On balance, the positive indicators and expected recovery outweigh the transitory headwinds.Positive Updates
Record Quarterly and Full-Year Revenue
Q4 record revenue with 9% reported growth, 2% organic growth, and 4% sequential growth; full-year 2025 revenue of $981 million (company's largest year ever).
Negative Updates
Gross Margin Compression in Q4
Q4 non-GAAP adjusted gross margin declined to 45.5% from 47% in prior year (down 150 bps YoY and down 100 bps sequentially); management attributed >100 bps impact to deliberate decision to prioritize customer deliveries over timing of regional manufacturing transfers.
Read all updates
Q4-2025 Updates
Positive
Negative
Record Quarterly and Full-Year Revenue
Q4 record revenue with 9% reported growth, 2% organic growth, and 4% sequential growth; full-year 2025 revenue of $981 million (company's largest year ever).
Read all positive updates
Company Guidance
Management guided FY‑2026 GAAP revenue of $1,030–$1,050M (4–6% organic growth) with Q1 revenue $250–$255M (organic +1% to +3%, reported +7% to +9%) and sequential organic acceleration to ~+5%–+7% in Q2 and similar in the back half; adjusted gross margin is expected to be ~47% for the year (~+100 bps vs 2025) with Q1 at ~46.5%. They forecast R&D+SG&A of $294–$298M (~28% of sales) and Q1 opex of ~$76–$77M (~30% of sales), depreciation ~$17M FY, stock compensation ~$38M FY (Q1 ~$12M, Q2 ~$11M, then ~ $8M/quarter). Adjusted EBITDA is guided to $245–$250M (~24% margin, low double‑digit growth) with Q1 adjusted EBITDA $56–$58M (up 12–17% YoY); interest expense ~ $8M FY (~$2M Q1); non‑GAAP tax ~21% FY (19–20% Q1); diluted shares ~41M; diluted EPS $3.50–$3.65 FY (up to 11% YoY, including a $0.22–$0.24 headwind from the equity raise and a one‑time $0.14 equity‑grant impact), and Q1 adj. EPS $0.75–$0.80 (up ~8% YoY). Finally, operating cash flow is expected to rebound to $145–$185M for FY‑2026 (Q1 cash conversion >100% of GAAP net income), with regional manufacturing transfers to be completed by end of Q2.Novanta Financial Statement Overview
Summary
Income Statement
67
Positive
Balance Sheet
78
Positive
Cash Flow
46
Neutral
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 980.60M | 949.25M | 881.66M | 860.90M | 706.79M |
| Gross Profit | 435.28M | 421.55M | 399.90M | 378.47M | 300.33M |
| EBITDA | 153.05M | 179.86M | 169.92M | 160.62M | 125.47M |
| Net Income | 53.83M | 64.09M | 72.88M | 74.05M | 50.33M |
Balance Sheet | |||||
| Total Assets | 1.81B | 1.39B | 1.23B | 1.24B | 1.23B |
| Cash, Cash Equivalents and Short-Term Investments | 380.87M | 113.99M | 105.05M | 100.11M | 117.39M |
| Total Debt | 341.61M | 471.00M | 404.56M | 489.38M | 493.40M |
| Total Liabilities | 492.82M | 642.81M | 552.60M | 663.63M | 706.59M |
| Stockholders Equity | 1.31B | 745.70M | 673.46M | 577.59M | 521.29M |
Cash Flow | |||||
| Free Cash Flow | 48.43M | 141.35M | 100.11M | 71.14M | 72.45M |
| Operating Cash Flow | 64.06M | 158.51M | 120.08M | 90.78M | 94.63M |
| Investing Cash Flow | -74.32M | -208.19M | -19.89M | -42.54M | -306.70M |
| Financing Cash Flow | 276.33M | 56.94M | -97.85M | -60.15M | 204.75M |
Novanta Technical Analysis
Negative
118.11
Price Trends
132.24
Negative
124.52
Negative
121.41
Negative
Market Momentum
-4.94
Positive
42.98
Neutral
25.64
Neutral
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 118.11 is below the 20-day moving average (MA) of 121.48, below the 50-day MA of 132.24, and below the 200-day MA of 121.41, indicating a bearish trend. The MACD of -4.94 indicates Positive momentum. The RSI at 42.98 is Neutral, neither overbought nor oversold. The STOCH value of 25.64 is Neutral, 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 |
|---|---|---|---|---|---|---|---|
80 Outperform | $7.29B | 44.07 | 21.34% | 0.16% | 13.13% | 24.02% | |
77 Outperform | $7.31B | 41.35 | 18.74% | ― | 11.55% | 1745.46% | |
74 Outperform | $5.43B | 24.74 | 12.39% | ― | 1.82% | 56.52% | |
68 Neutral | $4.37B | 27.58 | 16.91% | ― | 9.37% | 15.70% | |
68 Neutral | $5.14B | 155.81 | 1.11% | 1.43% | -8.07% | 63.50% | |
62 Neutral | $4.21B | 80.88 | 5.84% | ― | 4.07% | -12.34% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% |
* Technology Sector Average
NOVT
Novanta
118.11
-10.54
-8.19%
ESE
Esco Technologies
281.37
121.06
75.52%
OSIS
OSI Systems
265.51
67.24
33.91%
PLXS
Plexus
202.54
72.49
55.74%
ST
Sensata
35.22
10.98
45.32%
VICR
Vicor
161.00
112.43
231.48%
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.