Novanta (NOVT) AI Stock Analysis

• Market Cap: $4.80B
• Dividend Yield: N/A
• Average Volume (3M): 221.82K
• Price to Earnings (P/E): 68.2
• Beta (1Y): 1.71
• Revenue Growth: 6.52%
• EPS Growth: 1.60%
• Country: US
• Employees: 3,000
• Sector: Technology
• Sector Strength: 87
• Industry: Hardware, Equipment & Parts
• EPS (TTM): 0.74
• Shares Outstanding: 35,970,833
• 10 Day Avg. Volume: 271,036
• 30 Day Avg. Volume: 221,822
• PEG Ratio: 6.08
• Price to Book (P/B): 5.64
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 30.65
• Enterprise Value/Market Cap: 0.97
• Enterprise Value/Revenue: 1.26
• Enterprise Value/Gross Profit: 10.98
• Enterprise Value/Ebitda: 6.96
• 1Y Price Target: $139.00
• Price Target Upside: 4.25% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

• Rating: 71 Outperform
• Price Target: $140.00 ▲(5.00%Upside)

Novanta's robust financial performance and strategic growth initiatives drive a strong stock score. However, the high P/E ratio suggests overvaluation, and technical indicators show mixed signals. Despite challenges from tariffs, strategic product launches and market diversification support long-term growth potential.

Positive Factors

Acquisitions

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

Growth Opportunities

Novanta's leadership team is actively engaging with growth-focused investors, showcasing their commitment to expanding the company.

Negative Factors

Budget Cuts

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

Revenue Guidance

Novanta suspended 2025 revenue and EPS guidance due to extreme uncertainty from tariffs.

Trade Relations

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. (NOVT) is a leading global supplier of precision photonic and motion control components and subsystems. The company operates in the healthcare and advanced industrial sectors, providing innovative technology solutions that enhance the performance, efficiency, and productivity of its customers' products. Novanta's core offerings include laser systems, scanning and beam delivery products, precision motion control solutions, and optical and RF technology used in a variety of applications ranging from medical and life sciences to advanced industrial manufacturing.

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 exhibits robust financial performance with significant revenue growth, stable margins, and efficient cash flow management. The balance sheet is healthy with controlled leverage and strong equity ratios, reflecting stability and growth potential.

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	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	951.70M	949.25M	881.66M	860.90M	706.79M	590.62M
Gross Profit	425.48M	421.55M	399.90M	378.47M	300.33M	244.52M
EBITDA	174.41M	166.12M	164.16M	160.99M	126.49M	98.07M
Net Income	70.62M	64.09M	72.88M	74.05M	50.33M	44.52M
Balance Sheet
Total Assets	1.39B	1.39B	1.23B	1.24B	1.23B	865.18M
Cash, Cash Equivalents and Short-Term Investments	106.05M	113.99M	105.05M	100.11M	117.39M	125.05M
Total Debt	442.53M	471.00M	404.56M	489.38M	493.40M	255.05M
Total Liabilities	615.70M	642.81M	552.60M	663.63M	706.59M	388.37M
Stockholders Equity	769.75M	745.70M	673.46M	577.59M	521.29M	476.81M
Cash Flow
Free Cash Flow	141.48M	141.35M	100.11M	71.14M	74.65M	129.72M
Operating Cash Flow	156.47M	158.51M	120.08M	90.78M	94.63M	140.24M
Investing Cash Flow	-9.93M	-208.19M	-19.89M	-42.54M	-306.70M	-13.16M
Financing Cash Flow	-138.67M	56.94M	-97.85M	-60.15M	204.75M	-84.36M

Novanta Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 133.33
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

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 133.33 is above the 20-day moving average (MA) of 126.77, above the 50-day MA of 124.75, and below the 200-day MA of 146.63, indicating a neutral trend. The MACD of 1.83 indicates Negative momentum. The RSI at 64.14 is Neutral, neither overbought nor oversold. The STOCH value of 87.52 is Negative, 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
VNT	75 Outperform	$5.69B	15.66	35.88%	0.26%	-3.59%	-11.30%
ESE	74 Outperform	$5.06B	42.97	9.66%	0.16%	8.40%	20.03%
MKSI	74 Outperform	$7.01B	31.16	9.50%	0.84%	-1.14%	―
PLXS	74 Outperform	$3.79B	27.22	10.93%	―	-0.69%	42.26%
NOVT	71 Outperform	$4.80B	68.21	9.73%	―	6.52%	1.60%
CGNX	68 Neutral	$5.46B	47.56	8.02%	0.98%	8.56%	18.99%
Sector *	63 Neutral	$34.04B	6.14	-11.52%	1.82%	5.53%	-18.79%

Novanta Corporate Events

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.