Fact based stock research
Novanta (NasdaqGS:NOVT)
CA67000B1040
How to read the free ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Novanta stock research in summary
ANALYSIS: With an Obermatt Combined Rank of 7 (worse than 93% compared with investment alternatives), Novanta (Electronic Equipment, USA) shares have lower financial characteristics compared with similar stocks. Shares of Novanta are low in value (priced high) with a consolidated Value Rank of 3 (worse than 97% of alternatives), show below-average growth (Growth Rank of 49), and are riskily financed (Safety Rank of 34), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 7, is a sell recommendation based on Novanta's financial characteristics. As the company Novanta's key financial metrics all exhibit below-average performance, such as low value (Obermatt Value Rank of 3), low growth (Obermatt Growth Rank of 49), and risky financing practices (Obermatt Safety Rank of 34), it is a somewhat questionable stock investment, where the risk of paying too much for the shares is significant, unless the company has an exceptionally bright future. Such poor financial performance sometimes indicates that the company's business is all concentrated in some distant future. This is sometimes the case for high-tech or biotechnology companies. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and risky today. In such cases, the Obermatt Method has limited value as it is based on facts we can observe today. If the facts are all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that should only amount to a small fraction of a safe portfolio. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more
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Review the performance ranks of the individual metrics that form each investment strategy.
Research History: Novanta
| RESEARCH HISTORY | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 1 |
|
13 |
|
1 |
|
3 |
|
| GROWTH | ||||||||
| GROWTH | 52 |
|
79 |
|
43 |
|
49 |
|
| SAFETY | ||||||||
| SAFETY | 10 |
|
45 |
|
44 |
|
34 |
|
| SENTIMENT | ||||||||
| SENTIMENT | n/a |
|
35 |
|
87 |
|
new |
|
| 360° VIEW | ||||||||
| 360° VIEW | n/a |
|
23 |
|
39 |
|
new |
|
Combined financial peformance in Detail
ANALYSIS: With an Obermatt Combined Rank of 7 (worse than 93% compared with investment alternatives), Novanta (Electronic Equipment, USA) shares have lower financial characteristics compared with similar stocks. Shares of Novanta are low in value (priced high) with a consolidated Value Rank of 3 (worse than 97% of alternatives), show below-average growth (Growth Rank of 49), and are riskily financed (Safety Rank of 34), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 7, is a sell recommendation based on Novanta's financial characteristics. As the company Novanta's key financial metrics all exhibit below-average performance, such as low value (Obermatt Value Rank of 3), low growth (Obermatt Growth Rank of 49), and risky financing practices (Obermatt Safety Rank of 34), it is a somewhat questionable stock investment, where the risk of paying too much for the shares is significant, unless the company has an exceptionally bright future. Such poor financial performance sometimes indicates that the company's business is all concentrated in some distant future. This is sometimes the case for high-tech or biotechnology companies. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and risky today. In such cases, the Obermatt Method has limited value as it is based on facts we can observe today. If the facts are all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that should only amount to a small fraction of a safe portfolio. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more
| RESEARCH HISTORY | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 1 |
|
13 |
|
1 |
|
3 |
|
| GROWTH | ||||||||
| GROWTH | 52 |
|
79 |
|
43 |
|
49 |
|
| SAFETY | ||||||||
| SAFETY | 10 |
|
45 |
|
44 |
|
34 |
|
| COMBINED | ||||||||
| COMBINED | 5 |
|
34 |
|
12 |
|
7 |
|
Value Metrics in Detail
ANALYSIS: With an Obermatt Value Rank of 3 (worse than 97% compared with alternatives), Novanta shares are significantly more expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with all four indicators below average for Novanta. Price-to-Sales is 17 which means that the stock price compared with what market professionals expect for future profits is higher than 83% of comparable companies, indicating a low value concerning Novanta's sales levels. Price-to-Book Capital (also referred to as market-to-book ratio) also has a low Price-to-Book Rank of 6, which means that both reliable company size indicators, sales, and invested capital cannot explain the high stock price of Novanta. In addition, the two profit-related value indicators, Price-to-Profit (also referred to as price-earnings, P/E) with a low rank of 15 and Dividend Yield, which is lower than 99% of comparable companies, also make the stock more expensive compared with investment alternatives. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 3, is a sell recommendation based on Novanta's stock price compared with the company's operational size and dividend yields. How can market participants pay such a high price for Novanta? One reason may be that the company is simply too popular. If enough people want a particular stock, its price can exceed reasonable levels. This is often the case for companies offering new and exciting products and everybody wants a piece of the action. Should you pay a lot for a hot stock such as Novanta? It's risky, and even if the stock price continues to grow because of popular demand, it may return to more typical lower levels later. And that return can be sudden and quick, making it impossible for retail investors to exit on time. Sometimes, high prices are deserved. This is the case when it is justified to believe that the company will dominate a market with high profit margins. It has happened in the past for many technology companies and indeed for commercially successful pharmaceutical discoveries. Sometimes they last, sometimes, they get eaten alive. Novanta may be such a type of stock. That would mean, retail investors should be careful, only considering investing a small part of their wealth in this exciting category and always being ready to lose more than half, if not all of the investment. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is essential in this case, as the financial indicators are inconclusive. ...read more
| VALUE METRICS | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| PRICE VS. REVENUES (P/S) | ||||||||
| PRICE VS. REVENUES (P/S) | 24 |
|
29 |
|
15 |
|
17 |
|
| PRICE VS. PROFITS (P/E) | ||||||||
| PRICE VS. PROFITS (P/E) | 17 |
|
12 |
|
8 |
|
15 |
|
| PRICE VS. CAPITAL (Market-to-Book) | ||||||||
| PRICE VS. CAPITAL (Market-to-Book) | 6 |
|
19 |
|
4 |
|
6 |
|
| DIVIDEND YIELD | ||||||||
| DIVIDEND YIELD | 1 |
|
1 |
|
1 |
|
1 |
|
| CONSOLIDATED RANK: VALUE | ||||||||
| CONSOLIDATED RANK: VALUE | 1 |
|
13 |
|
1 |
|
3 |
|
Growth Metrics in Detail
ANALYSIS: With an Obermatt Growth Rank of 49 (better than 49% compared with alternatives), Novanta shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, with all but one indicator above average for Novanta. Sales Growth has a rank of 51 which means that currently, professionals expect the company to grow more than 51% of its competitors. Both Profit Growth, with a rank of 53, and Stock Returns, with a rank of 73, are also above average. But Capital Growth only has a rank of 26, which means that, currently, professionals expect the company to grow its invested capital less than 74% of its competitors. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 49, is a hold recommendation for growth and momentum investors. That may be a good sign if the company is already well positioned and doesn't require more investments at this time. They may focus on growing the top (revenues) and bottom (profits) lines, recently rewarded with above-average stock returns for shareholders. But it may also be a sign of danger as the company is falling back with capital investment activities concerning competition. This requires further analysis of corporate communications. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case. ...read more
| GROWTH METRICS | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 36 |
|
74 |
|
26 |
|
51 |
|
| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 93 |
|
50 |
|
65 |
|
53 |
|
| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | n/a |
|
71 |
|
27 |
|
26 |
|
| STOCK RETURNS | ||||||||
| STOCK RETURNS | 56 |
|
57 |
|
63 |
|
73 |
|
| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 52 |
|
79 |
|
43 |
|
49 |
|
Safety Metrics in Detail
ANALYSIS: With an Obermatt Safety Rank of 34 (better than 34% compared with alternatives), the company Novanta has financing practices on the riskier side, which means that their overall debt burden is above the industry average. This doesn't mean that the business of Novanta is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with just one indicator above average for Novanta. Liquidity is at 100, meaning the company generates more profit to service its debt than 100% of its competitors. This indicates that the company is safer when it comes to debt service. But Refinancing is riskier at a rank of 6, which means that the portion of the debt that is about to be refinanced is above average. It has more debt in the refinancing stage than 94% of its competitors. Leverage is also high at a rank of 29, which means that the company has an above-average debt-to-equity ratio. It has more debt than 71% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 34 (worse than 66% compared with alternatives), Novanta has a financing structure that is riskier than that of its competitors. High Leverage (a low Obermatt Leverage Rank) is good in good times, because it usually indicates that shareholders get higher returns. The good Liquidity performance of the company is an indicator that this is the case. However, if you expect an economic downturn, you may stay clear of this stock because they have an above-average debt level that needs refinancing soon. If the company is sailing with good winds, as may be visible from the Growth and Sentiment performance, the refinancing risk may be lower than the low Refinancing rank suggests. ...read more
| SAFETY METRICS | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| LEVERAGE | ||||||||
| LEVERAGE | 24 |
|
36 |
|
18 |
|
29 |
|
| REFINANCING | ||||||||
| REFINANCING | 18 |
|
11 |
|
9 |
|
6 |
|
| LIQUIDITY | ||||||||
| LIQUIDITY | 29 |
|
95 |
|
98 |
|
100 |
|
| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 10 |
|
45 |
|
44 |
|
34 |
|
Sentiment Metrics in Detail
| SENTIMENT | 2021 | 2022 | 2023 | 2024 | ||||
|---|---|---|---|---|---|---|---|---|
| ANALYST OPINIONS | ||||||||
| ANALYST OPINIONS | n/a |
|
7 |
|
80 |
|
new |
|
| OPINIONS CHANGE | ||||||||
| OPINIONS CHANGE | n/a |
|
50 |
|
50 |
|
new |
|
| PRO HOLDINGS | ||||||||
| PRO HOLDINGS | n/a |
|
57 |
|
75 |
|
new |
|
| MARKET PULSE | ||||||||
| MARKET PULSE | n/a |
|
66 |
|
52 |
|
new |
|
| CONSOLIDATED RANK: SENTIMENT | ||||||||
| CONSOLIDATED RANK: SENTIMENT | n/a |
|
35 |
|
87 |
|
new |
|
Free stock analysis by the purely fact based Obermatt Method for Novanta from November 14, 2024.
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