Nova (NVMI) AI Stock Analysis

• Market Cap: $9.12B
• Dividend Yield: N/A
• Average Volume (3M): 495.77K
• Price to Earnings (P/E): 42.3
• Beta (1Y): 1.94
• Revenue Growth: 43.69%
• EPS Growth: 51.22%
• Country: US
• Employees: 1,177
• Sector: Technology
• Sector Strength: 88
• Industry: Semiconductors
• EPS (TTM): 2.20
• Shares Outstanding: 29,451,391
• 10 Day Avg. Volume: 531,913
• 30 Day Avg. Volume: 495,766
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 0.93
• Enterprise Value/Revenue: 10.50
• Enterprise Value/Gross Profit: 18.39
• Enterprise Value/Ebitda: 33.55
• 1Y Price Target: $296.25
• Price Target Upside: -4.36% Downside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 5

• Rating: 81 Outperform
• Price Target: $274.00 ▼(-11.54% Downside)

Nova's strong financial performance and positive earnings call sentiment are the primary drivers of its high overall score. The company's robust growth, profitability, and strategic outlook in the semiconductor industry are significant strengths. While technical indicators suggest some short-term bearish momentum, the long-term outlook remains positive. Valuation is relatively high, reflecting growth expectations, but the lack of a dividend yield may deter income-focused investors.

Positive Factors

Revenue Growth

Strong revenue growth indicates robust demand for Nova's products and services, enhancing its market position and supporting long-term expansion.

Cash Flow Management

Effective cash flow management supports reinvestment and financial stability, ensuring Nova can capitalize on growth opportunities and withstand market fluctuations.

Strategic Outlook

A clear strategic focus on emerging technologies positions Nova for sustained growth and competitive advantage in the semiconductor industry.

Negative Factors

China Market Challenges

Decreasing revenue from China could impact Nova's growth potential in a key market, necessitating strategic adjustments to maintain overall revenue growth.

Tariff Impact

Tariffs could pressure margins, affecting profitability. Nova must manage costs effectively to mitigate these impacts and maintain financial health.

Convertible Notes Offering

Issuing convertible notes may increase financial leverage and dilute existing shareholders, potentially impacting future financial flexibility and shareholder value.

Nova Business Overview & Revenue Model

Company Description

Nova (NVMI) is a leading provider of advanced materials and photonics solutions primarily for the semiconductor industry. The company specializes in developing and manufacturing innovative metrology and inspection systems that are essential for the production of semiconductor devices. Nova operates in various sectors, including wafer fabrication, manufacturing equipment, and materials analysis, serving a global customer base that includes major semiconductor manufacturers.

How the Company Makes Money

Nova 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 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.

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.

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.

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

• Technical Analysis Sentiment: Positive
• Last Price: 309.76
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: 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 309.76 is above the 20-day moving average (MA) of 286.35, above the 50-day MA of 273.48, and above the 200-day MA of 233.20, indicating a bullish trend. The MACD of 12.87 indicates Negative momentum. The RSI at 64.64 is Neutral, neither overbought nor oversold. The STOCH value of 59.21 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for NVMI.

Nova Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NVMI	81 Outperform	$9.12B	42.33	24.23%	―	43.69%	51.22%
CAMT	78 Outperform	$5.00B	38.63	21.58%	1.27%	27.88%	37.85%
OLED	77 Outperform	$7.11B	29.18	14.26%	1.17%	6.23%	10.12%
ONTO	76 Outperform	$6.25B	31.58	10.18%	―	15.51%	20.31%
AMKR	76 Outperform	$7.17B	23.68	7.24%	2.54%	-1.20%	-19.46%
TSEM	73 Outperform	$7.66B	39.38	7.08%	―	7.18%	-60.59%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%

Nova Corporate Events

Nova Ltd. Completes $750 Million Convertible Notes Offering

On September 5, 2025, Nova Ltd. successfully closed a private offering of $750 million in convertible senior notes due 2030, including an additional $100 million exercised by initial purchasers. The notes, which do not bear regular interest, are convertible into ordinary shares and are intended to fund general corporate purposes, including potential mergers and acquisitions. This financial maneuver positions Nova Ltd. strategically for future growth and expansion in the semiconductor industry, potentially impacting stakeholders by enhancing the company’s operational capabilities and market competitiveness.

Nova Upsizes Convertible Notes Offering to $650 Million

On September 3, 2025, Nova Ltd. announced the pricing of an upsized private offering of $650 million in 0.00% convertible senior notes due 2030. The offering, initially set at $500 million, was increased due to demand and is aimed at qualified institutional buyers. The proceeds, estimated at $631.5 million after expenses, will be used for general corporate purposes, including potential mergers and acquisitions, business development, and new product development. This strategic financial move is expected to strengthen Nova’s market position and provide flexibility for future growth opportunities.

Nova Ltd. Announces $500 Million Convertible Notes Offering

On September 2, 2025, Nova Ltd. announced a proposed private offering of $500 million in 0.00% convertible senior notes due 2030, targeting qualified institutional buyers. The offering includes an option for initial purchasers to buy an additional $75 million in notes. The proceeds will fund capped call transactions to mitigate potential share dilution and support general corporate purposes, including potential mergers and acquisitions. This strategic financial move is expected to bolster Nova’s market positioning and operational flexibility in the semiconductor industry.

Nova Unveils Nova WMC Platform for Advanced Semiconductor Packaging

On August 26, 2025, Nova announced the release of the Nova WMC, a next-generation modular optical metrology platform designed for advanced packaging in semiconductor manufacturing. This innovative platform is built to handle a variety of wafer sizes and forms, supporting multiple metrology technologies. The Nova WMC has already been adopted by a leading memory manufacturer and has received several additional orders, highlighting its ability to address major industry challenges and its potential as a key tool for next-generation packaging applications. The company has started recognizing revenue from the first system and expects further revenue by the end of 2025.

Nova Ltd. Engages in Investor Conferences to Strengthen Market Presence

Nova Ltd. announced on August 12, 2025, that its senior management will participate in several investor conferences in August and September, including events hosted by Needham, Jefferies, Evercore ISI, Benchmark, and Citi. These conferences, held in various formats such as virtual and in-person meetings, provide Nova with opportunities to engage with investors and stakeholders, potentially impacting its market positioning and investor relations.

Nova Achieves Record Q2 2025 Financial Results

Nova Ltd. reported record financial results for the second quarter of 2025, with a 40% year-over-year increase in revenue to $220 million and a 52% increase in GAAP net income to $68.3 million. The company attributes this growth to strong demand for its advanced metrology solutions in the semiconductor industry, particularly in the Foundry/Logic and chemical metrology segments. Nova’s management expressed confidence in continuing to outperform the wafer fab equipment (WFE) market in 2025, driven by customer adoption and a robust product portfolio.

Nova to Announce Q2 2025 Financial Results on August 7

On July 10, 2025, Nova announced it will release its second quarter 2025 financial results on August 7, 2025, before the Nasdaq market opens. A conference call hosted by Nova’s CEO and CFO will follow the release to discuss the results. This announcement is significant as it provides stakeholders with insights into the company’s financial health and operational performance, potentially influencing investor decisions and market perceptions.