Novanta (NOVT) AI Stock Analysis

• Market Cap: $3.60B
• Dividend Yield: N/A
• Average Volume (3M): 375.79K
• Price to Earnings (P/E): 58.9
• Beta (1Y): 1.62
• Revenue Growth: 6.34%
• EPS Growth: -1.57%
• Country: US
• Employees: 3,000
• Sector: Technology
• Sector Strength: 88
• Industry: Hardware, Equipment & Parts
• EPS (TTM): 0.76
• Shares Outstanding: 35,973,633
• 10 Day Avg. Volume: 435,913
• 30 Day Avg. Volume: 375,788
• 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: 1.42
• Enterprise Value/Revenue: 5.33
• Enterprise Value/Gross Profit: 11.90
• Enterprise Value/Ebitda: 28.66
• 1Y Price Target: $133.00
• Price Target Upside: 32.93% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

• Rating: 65 Neutral
• Price Target: $123.00 ▲(22.94% Upside)

Novanta's overall stock score reflects strong financial performance and positive earnings call highlights, including new product growth and strategic wins. However, technical indicators suggest bearish trends, and the high P/E ratio indicates potential overvaluation. The absence of a dividend yield further impacts the valuation score.

Positive Factors

New Product Growth

The significant growth in new product revenue indicates strong innovation and market acceptance, positioning Novanta well for continued expansion in high-growth sectors.

Strategic Design Wins

Substantial design wins enhance Novanta's competitive edge and customer relationships, securing future revenue streams and reinforcing its market position.

Advanced Surgery and Robotics Growth

Growth in advanced surgery and robotics underscores Novanta's strength in high-demand markets, supporting long-term revenue potential and industry leadership.

Negative Factors

Decline in Precision Medicine and Industrial Markets

Sales declines in key markets like Precision Medicine could impact Novanta's revenue diversity and highlight vulnerabilities to market-specific downturns.

Impact of Tariffs and Trade Disruptions

Ongoing tariff impacts and trade disruptions pose risks to Novanta's supply chain and profitability, potentially affecting long-term cost structures and market access.

Decrease in Operating Cash Flow

A significant drop in operating cash flow may constrain Novanta's ability to invest in growth opportunities and manage financial obligations efficiently.

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 generates revenue primarily through the sale of its precision components and systems, which cater to various high-growth markets. Key revenue streams include the direct sale of products such as laser systems, optical components, and motion control solutions, as well as service agreements and support for its installed products. The company benefits from long-term relationships with major original equipment manufacturers (OEMs) and end-users, which often lead to repeat business and ongoing contracts. Additionally, Novanta invests in research and development to drive innovation, ensuring its products meet the evolving needs of its customers, thereby enhancing its competitive edge and revenue potential. Strategic partnerships with leading technology firms and participation in key industry events also contribute to its brand visibility and market penetration.

Novanta Financial Statement Overview

Summary

Novanta demonstrates strong revenue growth and operational efficiency, with healthy margins and a solid balance sheet. However, the decline in free cash flow growth and slight pressure on net profit margins in the TTM indicate areas for improvement. The company maintains a stable financial position with manageable leverage.

Income Statement

Novanta's income statement shows strong revenue growth over the years, with a notable TTM (Trailing-Twelve-Months) revenue growth rate of 54.5%. Gross profit margins are consistently healthy, hovering around 44-45%. However, net profit margins have slightly declined in the TTM, indicating some pressure on profitability. EBIT and EBITDA margins remain robust, reflecting efficient operational management.

Balance Sheet

The balance sheet reflects a moderate debt-to-equity ratio, which has improved over the years, indicating better financial leverage management. Return on equity has slightly decreased in the TTM, suggesting a need for improved profitability. The equity ratio remains stable, showing a solid capital structure.

Cash Flow

Cash flow analysis reveals a decline in free cash flow growth in the TTM, which could be a concern for liquidity. The operating cash flow to net income ratio is below 1, indicating potential cash flow constraints. However, the free cash flow to net income ratio remains strong, suggesting efficient cash generation relative to net income.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	956.88M	949.25M	881.66M	860.90M	706.79M	590.62M
Gross Profit	428.54M	421.55M	399.90M	378.47M	300.33M	244.52M
EBITDA	177.85M	179.86M	164.16M	160.99M	126.49M	98.07M
Net Income	61.36M	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	109.91M	113.99M	105.05M	100.11M	117.39M	125.05M
Total Debt	513.41M	471.00M	404.56M	489.38M	493.40M	255.05M
Total Liabilities	709.62M	642.81M	552.60M	663.63M	706.59M	388.37M
Stockholders Equity	801.45M	745.70M	673.46M	577.59M	521.29M	476.81M
Cash Flow
Free Cash Flow	117.86M	141.35M	100.11M	71.14M	74.65M	129.72M
Operating Cash Flow	131.39M	158.51M	120.08M	90.78M	94.63M	140.24M
Investing Cash Flow	-71.55M	-208.19M	-19.89M	-42.54M	-306.70M	-13.16M
Financing Cash Flow	-51.82M	56.94M	-97.85M	-60.15M	204.75M	-84.36M

Novanta Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 100.05
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: 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 100.05 is below the 20-day moving average (MA) of 111.99, below the 50-day MA of 116.77, and below the 200-day MA of 130.41, indicating a bearish trend. The MACD of -3.94 indicates Positive momentum. The RSI at 28.73 is Positive, neither overbought nor oversold. The STOCH value of 2.50 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for NOVT.

Novanta Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PLXS	77 Outperform	$3.87B	24.38	11.46%	―	2.31%	48.63%
ESE	76 Outperform	$5.30B	46.21	8.66%	0.16%	10.65%	15.22%
VICR	73 Outperform	$2.19B	33.53	10.77%	―	2.46%	572.04%
OSIS	72 Outperform	$3.98B	27.18	―	―	11.33%	18.47%
NOVT	65 Neutral	$3.60B	58.91	8.16%	―	6.34%	-1.57%
ST	63 Neutral	$4.40B	39.82	3.87%	1.59%	-7.23%	1278.91%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%

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.