Novanta (NOVT)
NASDAQ:NOVT
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Novanta
(NASDAQ:NOVT)
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Rating:69Neutral
Price Target:
$171.00
▲(32.71% Upside)
Action:Downgraded
Date:05/16/26
The score is supported by a strengthened balance sheet and constructive earnings-call momentum (strong bookings, reaffirmed/raised guidance, and excellent recent cash conversion). This is tempered by a high valuation (P/E 56) and technically extended conditions (RSI/Stoch elevated), plus margin timing risk from tariffs until expected second-half mitigation actions take hold.
Positive Factors
Balance sheet strength / net cash
A net cash position and materially lower leverage provide durable financial flexibility: supports disciplined M&A, targeted capex, repurchases, and funds restructuring (site closures) without forcing dilutive financing. This conservatism strengthens resilience across cycles and underpins strategic optionality.
Negative Factors
Tariff and freight-driven margin pressure
Sudden tariff and freight cost increases create a structural margin risk when cost passthrough lags contractual pricing. Management expects repricing and site consolidation benefits in H2, but timing uncertainty means margins could remain compressed for several quarters, pressuring sustainable net income.
Read all positive and negative factors
Positive Factors
Negative Factors
Balance sheet strength / net cash
A net cash position and materially lower leverage provide durable financial flexibility: supports disciplined M&A, targeted capex, repurchases, and funds restructuring (site closures) without forcing dilutive financing. This conservatism strengthens resilience across cycles and underpins strategic optionality.
Read all positive factors
Novanta Key Performance Indicators (KPIs)
Any
Revenue by Geography
Data provided by:
The Fly
The FlyNovanta (NOVT) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$5.47B
Dividend YieldN/A
Average Volume (3M)447.98K
Price to Earnings (P/E)56.1
Beta (1Y)1.63
Revenue Growth5.59%
EPS Growth-28.67%
CountryUS
Employees3,000
SectorTechnology
Sector Strength88
IndustryHardware, Equipment & Parts
Share Statistics
EPS (TTM)1.40
Shares Outstanding35,611,860
10 Day Avg. Volume625,031
30 Day Avg. Volume447,979
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/Revenue5.39
Enterprise Value/Gross Profit13.00
Enterprise Value/Ebitda30.21
Forecast
1Y Price Target
$173.00Price Target Upside34.26% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
EPS Forecast (FY)3.56
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 Earnings Call Summary
Earnings Call Date:May 11, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Aug 11, 2026
Earnings Call Sentiment Positive
The call conveyed strong operational momentum: robust bookings (+37%), improving organic growth trajectory, expanding profitability (adjusted EBITDA +14%, margin +70 bps), accelerating new product revenue (+~50%) and excellent cash generation (>200% cash conversion). These positives were tempered by near-term gross margin pressure from sudden tariff and freight cost increases, a modest $0.03 EPS headwind, and timing risk as repricing and manufacturing consolidation benefits are expected to materialize in the back half of the year. Management reaffirmed and tightened full-year guidance and outlined clear actions (surcharges, price increases, site consolidations) to restore margins, leaving the overall tone constructive.Positive Updates
Revenue Growth and Upgraded Guidance
Q1 reported revenue grew 10% year-over-year with 3% organic growth (an inflection versus the prior quarter). Management raised full-year GAAP revenue guidance to $1,040M–$1,055M (reported growth >7%, organic growth up to 6%) and expects Q2 organic growth of 6%–8%.
Negative Updates
Gross Margin Pressure from Tariffs and Cost Inflation
Adjusted gross margin was $118M (45.6%) in Q1, down ~60 basis points year-over-year (Automation segment margin down ~60 bps). Management cited higher freight, tariff increases and material costs as a timing-driven negative that outpaced the ability to surcharge and reprice orders.
Read all updates
Q1-2026 Updates
Positive
Negative
Revenue Growth and Upgraded Guidance
Q1 reported revenue grew 10% year-over-year with 3% organic growth (an inflection versus the prior quarter). Management raised full-year GAAP revenue guidance to $1,040M–$1,055M (reported growth >7%, organic growth up to 6%) and expects Q2 organic growth of 6%–8%.
Read all positive updates
Company Guidance
Novanta's guidance for 2026 calls for Q2 GAAP revenue of $259–$264M (organic growth 6–8%, reported up to 10%), adjusted gross margin ~45.5–46%, adjusted EBITDA $58–$62M (≈23% margin, high‑teens YoY growth), diluted EPS $0.81–$0.86 (up 6–13% YoY), R&D+SG&A ~$74–$75M (~28–29% of sales), stock comp ~$10M, depreciation ≈$4M, interest ≈$2M, a non‑GAAP tax rate of 20–22% and ~41M diluted shares; for the full year they reaffirmed GAAP revenue of $1,040–$1,055M (reported growth >7%, organic up to 6%), adjusted EBITDA $245–$250M (11–13% YoY), adjusted EPS $3.50–$3.65 (6–11% YoY), a goal of mid‑single‑digit (or higher) organic growth, cash‑flow conversion ≥100% and a planned second‑half gross‑margin step‑up as price/surcharge actions and two regional site closures take effect (tariff‑refunds not assumed).Novanta Financial Statement Overview
Summary
Income Statement
66
Positive
Balance Sheet
78
Positive
Cash Flow
62
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.00B | 980.60M | 949.25M | 881.66M | 860.90M | 706.79M |
| Gross Profit | 416.81M | 407.81M | 421.55M | 399.90M | 378.47M | 300.33M |
| EBITDA | 179.37M | 178.60M | 179.86M | 169.92M | 160.62M | 125.47M |
| Net Income | 53.72M | 53.83M | 64.09M | 72.88M | 74.05M | 50.33M |
Balance Sheet | ||||||
| Total Assets | 1.80B | 1.81B | 1.39B | 1.23B | 1.24B | 1.23B |
| Cash, Cash Equivalents and Short-Term Investments | 388.80M | 380.87M | 113.99M | 105.05M | 100.11M | 117.39M |
| Total Debt | 291.33M | 341.61M | 471.00M | 404.56M | 489.38M | 493.40M |
| Total Liabilities | 488.03M | 492.82M | 642.81M | 552.60M | 663.63M | 706.59M |
| Stockholders Equity | 1.31B | 1.31B | 745.70M | 673.46M | 577.59M | 521.29M |
Cash Flow | ||||||
| Free Cash Flow | 67.20M | 48.43M | 141.35M | 100.11M | 71.14M | 72.45M |
| Operating Cash Flow | 82.69M | 64.06M | 158.51M | 120.08M | 90.78M | 94.63M |
| Investing Cash Flow | -79.37M | -74.32M | -208.19M | -19.89M | -42.54M | -306.70M |
| Financing Cash Flow | 280.23M | 276.33M | 56.94M | -97.85M | -60.15M | 204.75M |
Novanta Technical Analysis
Positive
128.85
Price Trends
129.39
Positive
131.90
Positive
122.87
Positive
Market Momentum
7.08
Negative
65.04
Neutral
54.78
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 128.85 is below the 20-day moving average (MA) of 140.83, below the 50-day MA of 129.39, and above the 200-day MA of 122.87, indicating a bullish trend. The MACD of 7.08 indicates Negative momentum. The RSI at 65.04 is Neutral, neither overbought nor oversold. The STOCH value of 54.78 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 |
|---|---|---|---|---|---|---|---|
79 Outperform | $12.04B | 88.57 | 20.22% | ― | 15.59% | 491.65% | |
77 Outperform | $7.68B | 52.47 | 20.50% | 0.16% | 16.43% | 14.49% | |
73 Outperform | $6.91B | 27.85 | 12.83% | ― | 8.64% | 32.91% | |
69 Neutral | $5.47B | 56.06 | 5.08% | ― | 5.59% | -28.67% | |
67 Neutral | $6.94B | 14.72 | 1.72% | 1.43% | -3.37% | -59.55% | |
62 Neutral | $3.48B | 27.19 | 16.74% | ― | 6.98% | 8.41% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% |
* Technology Sector Average
NOVT
Novanta
154.88
34.75
28.93%
ESE
Esco Technologies
293.27
115.13
64.63%
OSIS
OSI Systems
207.86
-19.58
-8.61%
PLXS
Plexus
256.38
126.81
97.87%
ST
Sensata
47.46
22.61
91.01%
VICR
Vicor
268.29
226.62
543.84%
Novanta Corporate Events
Business Operations and StrategyPrivate Placements and Financing
Novanta Expands Credit Facilities with New Term Loan
Positive
May 15, 2026
On May 15, 2026, Novanta Inc. and several of its subsidiaries amended their existing credit agreement to add $200 million in delayed draw term loan commitments, available for up to six months after that date and maturing on June 27, 2030. The loan...
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.