NasdaqGS:NOVT

Stock Analysis Report

Executive Summary

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.


Snowflake Analysis

Moderate growth potential with mediocre balance sheet.


Similar Companies

Share Price & News

How has Novanta's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: NOVT has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-10.5%

NOVT

-1.8%

US Electronic

-1.1%

US Market


1 Year Return

11.8%

NOVT

5.6%

US Electronic

17.8%

US Market

Return vs Industry: NOVT exceeded the US Electronic industry which returned 5.6% over the past year.

Return vs Market: NOVT exceeded the US Market which returned 17.8% over the past year.


Shareholder returns

NOVTIndustryMarket
7 Day-10.5%-1.8%-1.1%
30 Day-8.5%-4.9%1.5%
90 Day-3.2%-0.4%6.6%
1 Year11.8%11.8%6.6%5.6%20.2%17.8%
3 Year259.4%259.4%35.0%31.4%47.5%38.1%
5 Year588.3%588.3%66.2%58.0%71.2%52.4%

Price Volatility Vs. Market

How volatile is Novanta's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Novanta undervalued compared to its fair value and its price relative to the market?

71.46x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: NOVT ($94.01) is trading above our estimate of fair value ($61.86)

Significantly Below Fair Value: NOVT is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: NOVT is poor value based on its PE Ratio (76.1x) compared to the Electronic industry average (19x).

PE vs Market: NOVT is poor value based on its PE Ratio (76.1x) compared to the US market (18.2x).


Price to Earnings Growth Ratio

PEG Ratio: NOVT is poor value based on its PEG Ratio (2.5x)


Price to Book Ratio

PB vs Industry: NOVT is overvalued based on its PB Ratio (8.2x) compared to the US Electronic industry average (2x).


Next Steps

Future Growth

How is Novanta forecast to perform in the next 1 to 3 years based on estimates from 3 analysts?

30.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: NOVT's forecast earnings growth (30.1% per year) is above the savings rate (1.7%).

Earnings vs Market: NOVT's earnings (30.1% per year) are forecast to grow faster than the US market (14.1% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: NOVT's revenue (5.1% per year) is forecast to grow slower than the US market (7.6% per year).

High Growth Revenue: NOVT's revenue (5.1% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if NOVT's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has Novanta performed over the past 5 years?

34.5%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: NOVT has a large one-off loss of $15.9M impacting its September 27 2019 financial results.

Growing Profit Margin: NOVT's current net profit margins (6.9%) are higher than last year (6.4%).


Past Earnings Growth Analysis

Earnings Trend: NOVT's earnings have grown significantly by 34.5% per year over the past 5 years.

Accelerating Growth: NOVT's earnings growth over the past year (11%) is below its 5-year average (34.5% per year).

Earnings vs Industry: NOVT earnings growth over the past year (11%) underperformed the Electronic industry 13.8%.


Return on Equity

High ROE: NOVT's Return on Equity (10.7%) is considered low.


Next Steps

Financial Health

How is Novanta's financial position?


Financial Position Analysis

Short Term Liabilities: NOVT's short term assets ($296.9M) exceed its short term liabilities ($124.9M).

Long Term Liabilities: NOVT's short term assets ($296.9M) do not cover its long term liabilities ($330.2M).


Debt to Equity History and Analysis

Debt Level: NOVT's debt to equity ratio (56.5%) is considered high.

Reducing Debt: NOVT's debt to equity ratio has increased from 48.9% to 56.5% over the past 5 years.

Debt Coverage: NOVT's debt is well covered by operating cash flow (21.9%).

Interest Coverage: NOVT's interest payments on its debt are well covered by EBIT (8.3x coverage).


Balance Sheet

Inventory Level: NOVT has a high level of physical assets or inventory.

Debt Coverage by Assets: NOVT's debt is covered by short term assets (assets are 1.3x debt).


Next Steps

Dividend

What is Novanta's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

Notable Dividend: Unable to evaluate NOVT's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate NOVT's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if NOVT's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if NOVT's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of NOVT's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

3.4yrs

Average management tenure


CEO

Matthijs Glastra (50yo)

3.4yrs

Tenure

US$3,984,613

Compensation

Mr. Matthijs Glastra has been the Chief Executive Officer and Director of Novanta Inc. (alternate name: GSI Group Inc.) since September 1, 2016 and was its Executive Officer since September 2012. Mr. Glast ...


CEO Compensation Analysis

Compensation vs Market: Matthijs's total compensation ($USD3.98M) is about average for companies of similar size in the US market ($USD4.86M).

Compensation vs Earnings: Matthijs's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Matthijs Glastra
CEO & Director3.4yrsUS$3.98m0.30% $9.2m
Robert Buckley
Chief Financial Officer8.9yrsUS$1.75m0.46% $14.2m
Brian Young
Chief Human Resources Officer3.2yrsUS$888.23k0.055% $1.7m
Peter Chang
VP, Corporate Controller & Chief Accounting Officer8.5yrsno data0.071% $2.2m
Phil Martin
Group President of Photonics3.6yrsno datano data
Leane Sinicki
Group President of Precision Motion3.3yrsno datano data
Heinrich Dreyer
Group President of Minimally Invasive Surgery1.8yrsno datano data

3.4yrs

Average Tenure

50yo

Average Age

Experienced Management: NOVT's management team is considered experienced (3.4 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Matthijs Glastra
CEO & Director3.4yrsUS$3.98m0.30% $9.2m
Stephen Bershad
Independent Chairman of the Board9.6yrsUS$250.00k1.89% $58.5m
Ira Lamel
Independent Director9.6yrsUS$140.00k0.0028% $87.6k
Dominic Romeo
Independent Director7.7yrsUS$125.00k0.0028% $87.6k
Deborah DiSanzo Eldracher
Independent Director0.8yrsno datano data
Brian King
Independent Director2.8yrsUS$125.00k0.0028% $87.6k
Lonny Carpenter
Independent Director1.8yrsUS$80.50k0.0028% $87.6k
Thomas Secor
Independent Director7.7yrsUS$127.86k0.0028% $87.6k

5.5yrs

Average Tenure

58yo

Average Age

Experienced Board: NOVT's board of directors are considered experienced (5.5 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: NOVT insiders have only sold shares in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Novanta Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Novanta Inc.
  • Ticker: NOVT
  • Exchange: NasdaqGS
  • Founded: 1968
  • Industry: Electronic Equipment and Instruments
  • Sector: Tech
  • Market Cap: US$3.095b
  • Shares outstanding: 35.07m
  • Website: https://www.novanta.com

Number of Employees


Location

  • Novanta Inc.
  • 125 Middlesex Turnpike
  • Bedford
  • Massachusetts
  • 1730
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
NOVTNasdaqGS (Nasdaq Global Select)YesCommon SharesUSUSDSep 1995
1GSNDB (Deutsche Boerse AG)YesCommon SharesDEEURSep 1995
0VAGLSE (London Stock Exchange)YesCommon SharesGBUSDSep 1995
NOVT NBMV (Bolsa Mexicana de Valores)YesCommon SharesMXMXNSep 1995

Biography

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 laser beam delivery, CO2 laser, continuous wave and ultrafast laser, and optical light engine products for photonics-based applications, such as industrial material processing, metrology, medical and life science imaging, DNA sequencing, and medical laser procedures. Its Vision segment provides a range of medical grade technologies, including medical insufflators, pumps, and related disposables; visualization solutions; wireless imaging and operating room integration technologies; optical data collection and machine vision technologies; radio frequency identification technologies; thermal chart recorders; spectrometry technologies; and embedded touch screen solutions. The company’s Precision Motion segment offers optical and inductive encoders, precision motors, motion control sub-assemblies, air bearings, air bearing spindles, and precision machined components. It sells its products through its direct sales force, resellers, distributors, and system integrators under the Cambridge Technology, Lincoln Laser, ExoTec Precision, Synrad, Laser Quantum, WOM, NDS, NDSsi, Reach Technology, JADAK, ThingMagic, Photo Research, General Scanning, Celera Motion, MicroE, Applimotion, Zettlex, 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. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/24 23:37
End of Day Share Price2020/02/24 00:00
Earnings2019/09/27
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.