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Nova (NVMI)
NASDAQ:NVMI
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Nova
(NASDAQ:NVMI)
Rating:81Outperform
Price Target:
$274.00
▲(7.16% Upside)
Positive Factors
Customer Wins
A win was noted at a leading memory customer for an HBM application.
Market Position
Nova is well positioned to outperform WFE with continued momentum across all three segments, as well as strong tractions from new products like Elipson, Metrion, and Sentronics’ contribution on advanced packaging.
Record Earnings
Nova reported record results which included record Foundry/Logic, Chemical Metrology and Service sales.
Negative Factors
China Revenue
China revenue will be flat to down in the second half of the year.
Future Earnings Outlook
Somewhat lower earnings are expected in the June quarter on flattish sales.
Stock Reaction
The stock did not react well to a smaller beat, as investors may believe that this print is 'as good as it gets' this cycle.
Nova (NVMI) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$7.39B
Dividend YieldN/A
Average Volume (3M)350.32K
Price to Earnings (P/E)34.3
Beta (1Y)1.91
Revenue Growth43.69%
EPS Growth51.22%
CountryUS
Employees1,177
SectorTechnology
Sector Strength84
IndustrySemiconductors
Share Statistics
EPS (TTM)2.20
Shares Outstanding29,451,391
10 Day Avg. Volume510,117
30 Day Avg. Volume350,322
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)N/A
P/FCF RatioN/A
Enterprise Value/Market Cap1.15
Enterprise Value/Revenue10.50
Enterprise Value/Gross Profit18.39
Enterprise Value/Ebitda33.55
Forecast
1Y Price Target
$297.00Price Target Upside16.15% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering6
Nova Business Overview & Revenue Model
Company DescriptionNova Ltd. designs, develops, produces, and sells process control systems used in the manufacture of semiconductors in Israel, Taiwan, the United States, China, Korea, and internationally. Its product portfolio includes a set of metrology platforms for dimensional, films, and materials and chemical metrology measurements for process control for various semiconductor manufacturing process steps, including lithography, etch, chemical mechanical planarization, deposition, electrochemical plating, and advanced packaging. The company serves various sectors of the integrated circuit manufacturing industry, including logic, foundries, and memory manufacturers, as well as process equipment manufacturers. Nova Ltd. was formerly known as Nova Measuring Instruments Ltd. and changed its name to Nova Ltd. in July 2021. The company was incorporated in 1993 and is headquartered in Rehovot, Israel.
How the Company Makes MoneyNova generates revenue primarily through the sale of its metrology and inspection equipment, which are critical for ensuring the quality and precision of semiconductor manufacturing processes. The company also earns income from providing software solutions and services that enhance the performance and efficiency of its equipment. Key revenue streams include direct sales to semiconductor manufacturers, ongoing maintenance and support contracts, and software licenses. Additionally, Nova benefits from strategic partnerships with leading technology firms and research institutions, which enhance its product offerings and market reach, ultimately contributing to its earnings.
Nova Earnings Call Summary
Earnings Call Date:Aug 07, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Oct 30, 2025
Earnings Call Sentiment Positive
The earnings call reflected a strong financial performance with record revenues and growth across multiple segments. While there are some challenges, such as the impact of tariffs and market dynamics in China, the highlights significantly outweigh the lowlights, suggesting a positive sentiment.Q2-2025 Updates
Positive Updates
Record-Breaking Revenue and Growth
Nova achieved a record quarterly revenue of $220 million, marking a 3% growth quarter-over-quarter and 40% year-over-year. The first half of 2025 saw a 45% revenue growth compared to the same period last year.
Strong Performance in Metrology Divisions
Record revenue was achieved in the chemical metrology division and service business, with service revenue growing 7% sequentially and 31% year-over-year.
High Gross and Operating Margins
Blended gross margins were 58% on a GAAP basis and 60% on a non-GAAP basis, surpassing the target model range. Operating margins reached 30% on a GAAP basis and 34% on a non-GAAP basis.
Positive Outlook for Gate-All-Around Revenue
Nova is on track to reach $500 million in gate-all-around revenue by the end of 2026, with strong demand and stability in the second half of the year.
Successful Integration of Sentronics
The integration of Sentronics has been successful, contributing to direct sales and expansion into various territories.
Negative Updates
Impact of Tariffs on Gross Margins
Although the impact is less than initially anticipated, newly implemented tariffs are expected to reduce gross margins by approximately 20 basis points.
China Market Challenges
China's percentage-wise revenue is forecasted to decrease year-over-year due to higher investments in advanced nodes, although the nominal value is expected to be moderately higher.
Company Guidance
In the second quarter of 2025, Nova Limited delivered a record-breaking performance, with revenues reaching $220 million, marking a 3% sequential growth and a 40% year-over-year increase. The company reported blended gross margins of 58% on a GAAP basis and 60% on a non-GAAP basis, surpassing their target model range. Operating margins were 30% GAAP and 34% non-GAAP, exceeding expectations, driven by a favorable product mix. The effective tax rate stood at approximately 15.5%, while GAAP earnings per share were $2.14 and non-GAAP earnings were $2.20. The service business marked its tenth consecutive quarter of revenue growth, increasing 7% sequentially and 31% year-over-year. Looking ahead to the third quarter, Nova expects revenues between $215 million and $227 million, with GAAP EPS ranging from $1.77 to $1.97 and non-GAAP EPS from $2.02 to $2.22. Gross margins are projected to be around 57% GAAP and 59% non-GAAP, with operating expenses slightly increasing. The company remains on track to achieve its strategic goals, particularly in the gate-all-around segment, with an ambitious target of $500 million in cumulative revenue by 2026.Nova Financial Statement Overview
Summary
Nova has demonstrated impressive financial performance with strong revenue growth, profitability, and cash flow metrics. The income statement shows a 29.8% revenue increase, with high gross and net profit margins. The balance sheet is solid with low debt and high equity, and cash flow management is robust with significant free cash flow growth.Income Statement
Nova has demonstrated impressive revenue growth, with a 29.8% increase from 2023 to 2024. The gross profit margin of 57.6% and net profit margin of 27.3% reflect strong profitability. Consistent EBIT and EBITDA margins of 27.9% and 34.7% respectively indicate operational efficiency. These metrics highlight Nova's robust growth and profitability in the highly competitive semiconductor industry.92
Very Positive
Balance Sheet
The company maintains a solid balance sheet with a debt-to-equity ratio of 0.25, showcasing a conservative approach to leveraging. A return on equity of 19.8% indicates effective use of equity capital to generate profits. The equity ratio of 66.7% suggests substantial financial stability. Overall, Nova's balance sheet reflects strong financial health with low debt and high shareholder equity.85
Very Positive
Cash Flow
Nova's free cash flow grew by 105.1% in 2024, evidencing strong cash generation capabilities. The operating cash flow to net income ratio of 1.28 demonstrates effective cash conversion from earnings. Furthermore, the free cash flow to net income ratio of 1.19 indicates robust free cash flow relative to profits, which supports reinvestment and shareholder returns. These metrics show Nova's strong cash flow management.89
Very Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 807.09M | 672.40M | 517.92M | 570.73M | 416.11M | 269.40M |
| Gross Profit | 460.81M | 387.09M | 293.18M | 322.40M | 237.36M | 152.92M |
| EBITDA | 252.60M | 204.92M | 172.41M | 164.59M | 122.42M | 65.74M |
| Net Income | 234.87M | 183.76M | 136.31M | 140.21M | 93.10M | 47.91M |
Balance Sheet | ||||||
| Total Assets | 1.53B | 1.39B | 1.13B | 984.11M | 805.15M | 655.79M |
| Cash, Cash Equivalents and Short-Term Investments | 556.78M | 586.57M | 443.68M | 373.50M | 410.16M | 423.87M |
| Total Debt | 209.23M | 236.10M | 244.14M | 246.06M | 220.94M | 214.42M |
| Total Liabilities | 437.22M | 462.63M | 383.06M | 397.14M | 331.40M | 284.25M |
| Stockholders Equity | 1.10B | 927.79M | 750.75M | 586.96M | 473.75M | 371.54M |
Cash Flow | ||||||
| Free Cash Flow | 206.08M | 218.05M | 106.34M | 98.22M | 127.45M | 53.81M |
| Operating Cash Flow | 229.71M | 235.27M | 123.53M | 119.54M | 132.26M | 60.25M |
| Investing Cash Flow | -134.13M | -136.40M | -125.33M | -100.26M | -238.50M | -42.46M |
| Financing Cash Flow | -68.35M | -48.35M | 10.00K | -29.81M | 11.00K | 181.41M |
Nova Technical Analysis
Positive
255.70
Price Trends
267.48
Negative
235.77
Positive
224.43
Positive
Market Momentum
-3.38
Positive
48.68
Neutral
36.14
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NVMI, the sentiment is Positive. The current price of 255.7 is below the 20-day moving average (MA) of 258.60, below the 50-day MA of 267.48, and above the 200-day MA of 224.43, indicating a neutral trend. The MACD of -3.38 indicates Positive momentum. The RSI at 48.68 is Neutral, neither overbought nor oversold. The STOCH value of 36.14 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for NVMI.
Nova Risk Analysis
Nova disclosed 51 risk factors in its most recent earnings report. Nova reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Nova Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
81 Outperform | $7.39B | 34.29 | 24.23% | ― | 43.69% | 51.22% | |
77 Outperform | $6.58B | 27.00 | 15.07% | 1.18% | 6.23% | 10.12% | |
76 Outperform | $6.00B | 19.42 | 7.37% | 3.03% | -1.20% | -19.46% | |
76 Outperform | $5.00B | 25.23 | 10.53% | ― | 15.51% | 20.31% | |
74 Outperform | $3.74B | 28.33 | 24.28% | 1.73% | 27.88% | 37.85% | |
73 Outperform | $6.78B | 35.79 | 7.41% | ― | 7.18% | -60.59% | |
61 Neutral | $35.51B | 8.11 | -11.05% | 1.89% | 8.55% | -8.72% |
* Technology Sector Average
Performance Comparison
NVMI
Nova
255.70
58.50
29.67%
AMKR
Amkor
24.29
-3.37
-12.18%
CAMT
Camtek
78.20
0.32
0.41%
ONTO
Onto Innovation
101.95
-75.35
-42.50%
TSEM
Tower
62.97
22.41
55.25%
OLED
Universal Display
144.68
-38.04
-20.82%
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.