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Verdict
Quantitative factor alignment verified for current market regime.
Quant Score
Rank
#1720
Positioning
Market Dominance
Manufacturing
Electrical Equipment
$3.6B
Matthijs Glastra
Novanta Inc., together with its subsidiaries, designs, manufactures, markets, and sells photonics, vision, and precision motion components and sub-systems. The company's Photonics segment offers photonics-based solutions, including laser scanning and beam delivery, CO2 laser, solid state laser, ultrafast laser, and optical light engine products. Its Vision segment provides a range of medical grade technologies, including medical insufflators, pumps, and related disposables.
Headcount
3.0K
HQ Base
BEDFORD, Massachusetts
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X-AXIS: EV/EBITDA (LOWER = CHEAPER) | Y-AXIS: ROE (HIGHER = ELITE) | RED CIRCLE = NOVT ANALYSIS TARGET
| Stock | Rating | Score▼ | Quality | Value | Momentum | P/E | EV/EBITDA | ROE | ROA | Gross Mgn | Op Mgn | Net Mgn | Rev Growth | Div Yield | D/E | Mkt Cap | AUDIT |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
$UL UNILEVER PLC | 78 | 96 | 98 | 59 | - | - | 28.5% | 8.0% | 100.0% | 100.0% | 10.4% | -4.6% | 3.3% | 0.0x | $141.8B | VS | |
$ASML ASML HOLDING NV | 77 | 89 | 86 | 83 | - | - | 46.1% | 16.6% | 51.3% | 31.9% | 26.8% | -4.0% | 1.0% | 25.0x | $272.1B | VS | |
$ESLT ELBIT SYSTEMS LTD | 76 | 81 | 87 | 85 | - | - | 10.3% | 3.1% | 24.1% | 7.2% | 4.7% | 14.3% | 0.8% | 25.0x | $11.4B | VS | |
$MT ArcelorMittal | 75 | 71 | 98 | 85 | - | - | 2.2% | 1.5% | 9.3% | 5.3% | 2.2% | -8.5% | 2.2% | 16.0x | $18.9B | VS | |
$AMAT APPLIED MATERIALS INC /DE | 75 | 85 | 87 | 84 | 20.9x | 13.6x | 35.5% | 19.8% | 48.7% | 29.2% | 24.7% | 4.4% | 0.8% | 32.0x | $181.9B | VS | |
$SIMO Silicon Motion Technology CORP | 75 | 84 | 86 | 85 | - | - | 11.8% | 8.8% | 45.9% | 11.3% | 11.1% | 25.7% | 3.7% | 0.0x | $1.8B | VS | |
$CODA Coda Octopus Group, Inc. | 74 | 83 | 90 | 79 | 16.3x | 11.9x | 7.6% | 7.0% | 66.5% | 17.1% | 15.6% | 39.0% | 0.0% | 0.0x | $115M | VS | |
$GSK GSK plc | 74 | 84 | 90 | 70 | - | - | 22.6% | 4.9% | 71.2% | 12.8% | 9.4% | 1.7% | 5.9% | 124.0x | $72.1B | VS | |
$EFXT Enerflex Ltd. | 74 | 80 | 91 | 83 | - | - | 3.0% | 1.1% | 20.9% | 7.3% | 1.3% | 3.0% | 0.9% | 67.0x | $1.2B | VS | |
$BUD Anheuser-Busch InBev SA/NV | 74 | 84 | 97 | 63 | - | - | 8.2% | 3.5% | 55.3% | 25.9% | 12.4% | 0.7% | 1.7% | 0.0x | $87.0B | VS | |
$NOVT NOVANTA INC | 52 | 55 | 57 | 55 | 94.0x | 32.5x | 6.9% | 3.7% | 44.6% | 10.6% | 5.8% | 5.1% | 0.0% | 88.0x | $3.6B | ||
| SECTOR BENCH | - | - | - | - | - | 22.3x | 11.5x | -2.5% | -0.1% | 42.5% | 1.3% | -0.2% | 5.9% | 0.0% | 0.2x | - | REF |
NOVANTA INC (NOVT) receives a "Hold" rating with a composite score of 51.8/100. It ranks #1720 out of 7,333 stocks in our coverage universe and carries a 3-star rating. Ratings are driven by a 6-factor quantitative model measuring quality, value, momentum, investment, stability, and short interest.
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YOY expansion rate
Core pricing power
Operating efficiency
Bottom-line conversion
Equity capital efficiency
Asset base utilization
Financial leverage load
Direct cash return
Matthijs Glastra
Chief Executive Officer
Labor Force
3,000
55
39
61
Audit Verdict: Average governance indicators based on financial metrics.
No recent insider transactions available for NOVT
In-line with peers — no strong momentum signal
Fair valuation relative to peers
Average quality profile
Low volatility — smoother ride and historically better risk-adjusted returns
Moderate investment profile
Mid-range overall rating
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Relative valuation derived from Manufacturing sector benchmarks. Model weights: EV/EBITDA (40%), P/B (35%), P/S (25%). Re-calculated daily.
Projection based on user-defined inputs. Re-calculated daily against current market data.
Reverse DCF Framework — Mauboussin Methodology
Institutional-grade Reverse DCF analysis. This model identifies the growth hurdles embedded in current market prices. When implied growth is significantly lower than historical or projected rates, a margin of safety may exist. Re-audited daily.
No analyst ratings for NOVT.
View All RatingsMaterial decline in asset turnover efficiency detected
ROIC 4.2% vs WACC 9.2% (spread -5.1%)
GM 45% vs sector 43%, OM 11% vs sector 1%
Capital turnover 0.62x, R&D intensity 10.1%
Rev growth 5%, 10yr history
Interest coverage N/A, Net debt/EBITDA 10.7x
Composite assessment of profitability, capital efficiency, and financial strength. Top-tier entities demonstrate sustainable cash flow generation and elite competitive moats.
Profit generated per dollar of shareholder equity
Efficiency of asset utilization
Pricing power and cost efficiency
Core business profitability
Bottom-line profitability
The Quality factor evaluates the persistence and magnitude of realized cash flows. Companies with scores >70 exhibit superior pricing power and structural financial resilience through diverse economic regimes.
Our uncertainty rating tracks the predictability of future cash flows and potential for permanent capital loss. Moderate visibility with standard industry cyclicality.
Our model assigns NOVANTA INC a Hold rating, with a composite score of 51.8/100 and 3 out of 5 stars. Ranked #1720 of 7,333 stocks, NOVT presents a mixed quantitative picture — neither compelling enough to initiate new positions nor weak enough to warrant selling. Investors already holding may consider maintaining their position while monitoring for changes in the factor profile.
With a quality score of 55/100, NOVT shows adequate but unremarkable business quality. The company reports a return on equity of 6.9% (sector avg: -2.5%), gross margins of 44.6% (sector avg: 42.5%), net margins of 5.8% (sector avg: -0.2%). This suggests the company generates acceptable returns but may lack the competitive positioning or operational efficiency to stand out from peers.
NOVT's value score of 57/100 indicates the stock is fairly valued based on its current fundamentals. Key valuation metrics include a P/E ratio of 94.00x, an EV/EBITDA of 32.48x, a P/B ratio of 6.52x. At this level, neither a clear bargain nor overpriced, the stock's attractiveness depends more on forward growth expectations and qualitative factors.
NOVANTA INC's investment score of 39/100 suggests limited reinvestment activity. Key growth metrics include revenue growth of 5.1% vs. a sector average of 5.9% and a return on assets of 3.7% (sector: -0.1%). While this can be positive for mature, cash-generative businesses returning capital to shareholders, it may also signal a lack of growth opportunities or management conservatism.
NOVT demonstrates moderate momentum with a score of 55/100, suggesting a neutral price trend without strong directional conviction. Revenue growth stands at 5.1% year-over-year, while a beta of 1.62 reflects its sensitivity to broader market moves. Moderate momentum may indicate the stock is consolidating or transitioning between trends, warranting close monitoring of upcoming catalysts.
With a stability score of 61/100, NOVT exhibits average financial resilience. Key stability metrics include a beta of 1.62 and a debt-to-equity ratio of 88.00x (sector avg: 0.2x). While the balance sheet is not a major concern, the stock is subject to typical market volatility and may experience sharper drawdowns during risk-off episodes.
NOVANTA INC's short interest score of 15/100 reveals significant bearish positioning, suggesting institutional investors are actively betting against the stock. Specific risk factors include high market sensitivity (beta: 1.62), elevated leverage (D/E: 88.00x). At $3.6B (mid-cap), NOVT carries meaningful risk and is best suited for investors with high risk tolerance who have thoroughly evaluated the bear thesis.
NOVANTA INC is a mid-cap company in the Manufacturing sector, ranked #0 of 50 in its sector (100th percentile) and #1720 of 7,333 overall (77th percentile). Key comparisons include ROE of 6.9% exceeding the -2.5% sector median and operating margins of 10.6% above the 1.3% sector average. This top-quartile standing reflects exceptional competitive strength relative to Manufacturing peers.
While NOVT currently exhibits a HOLD profile, superior opportunities exist within the MANUFACTURING sector. Our model identifies several "Strong Buy" candidates with higher quality scores and more attractive valuations among direct industry competitors.
View Top Manufacturing Alpha →Quant Factor Profile
Key factor gap
Stability (61) vs Short Int. (15) — closing this gap could shift the rating.
EV/EBITDA 183% ABOVE SECTOR MEDIAN
ROE 379% BELOW SECTOR MEDIAN
Gross Margin IN LINE WITH SECTOR BENCHMARKS
AUDIT DATA AS OF SEP 26, 2025 (Q2 FY2025)
We rate NOVANTA INC (NOVT) as a Hold with a composite score of 51.8/100 at a current price of $137.44. The stock presents a mixed quantitative picture — neither compelling enough to warrant new accumulation nor weak enough to justify selling for existing holders. Our factors are split, and the overall profile suggests patience is warranted.
The rating is primarily driven by strength in stability (61th percentile) and value (57th percentile), which together account for the majority of the composite score. Offsetting weakness in investment (39th percentile) and quality (55th percentile) tempers our overall conviction. We assign a Narrow Moat rating (41/100), High uncertainty, and Poor capital allocation.
Key items to watch: quarterly earnings execution and sector-level competitive dynamics. Any material change in these dynamics could warrant a reassessment of our rating. The moat trend is stable, which suggests the competitive landscape is stable for now.
NOVANTA INC holds a top-quartile position (#0 of 50) within the Manufacturing sector, based on our composite quantitative scoring across quality, value, momentum, and stability factors. The composite score of 51.8/100 places it at rank #1720 in our full 7,333-stock universe. At $3.6B in market capitalization, NOVANTA INC is a mid-cap player in the Manufacturing space, which limits certain scale advantages but may allow for more agile strategic execution.
Revenue is growing at 5%, though momentum at the 55th percentile suggests the market has not yet fully recognized this trajectory. This potential disconnect between fundamental improvement and market recognition could represent an opportunity for patient investors if the growth trend persists.
The margin cascade tells an important story: gross margins of 45% (+2.1pp vs sector) narrow to operating margins of 11% (+9.3pp vs sector) and net margins of 5.8%, yielding a gross-to-net conversion rate of 13%. The significant margin erosion from gross to net suggests elevated operating expenses, high interest costs, or other structural drags that warrant monitoring.
At a current price of $137.44, NOVANTA INC is trading near fair value based on current fundamentals. Our value factor score of 57/100 reflects a composite assessment across multiple valuation metrics including price-to-earnings, price-to-book, EV/EBITDA, and price-to-sales ratios relative to both sector peers and the broader market. Valuation metrics are mixed, with no strong signal of mispricing in either direction.
The stock currently trades at a P/E of 94.0x (a 322% premium to the sector median of 22.3x), EV/EBITDA of 32.5x (at a premium), P/B of 6.5x, P/S of 5.4x. The above-sector P/E multiple suggests the market is pricing in superior growth or quality, which our analysis finds only partially justified by current fundamentals.
Gross margins of 45% signal strong pricing power and brand/IP advantages — businesses with margins above 40% have historically demonstrated more resilient earnings through economic cycles.
A P/E of 94.0x leaves little room for execution misses — any earnings disappointment could trigger a sharp multiple compression.
High beta of 1.62 means amplified losses in market selloffs — in a broad market correction, this stock would likely decline more than the index.
We assign a High uncertainty rating to NOVANTA INC. Key risk factors include elevated market sensitivity (beta of 1.62), elevated valuation multiple (P/E 94.0x) that leaves limited margin for error. The wide range of potential outcomes widens our fair value estimate and increases the possibility of permanent capital impairment. Investors considering this name should size positions accordingly and demand a meaningful margin of safety before initiating.
Specific risk factors that inform our assessment include: elevated market sensitivity (beta of 1.62); elevated valuation multiple (P/E 94.0x) that leaves limited margin for error. Each of these factors independently widens the distribution of potential outcomes, and in combination they create a risk profile that demands careful position sizing. The stability factor at the 61th percentile and quality factor at the 55th percentile provide a quantitative summary of the overall risk landscape.
Key risk mitigants include: healthy gross margins of 45% provide a buffer against cost pressures; above-average stability (61th percentile) suggests predictable business dynamics. These factors partially offset the identified risks and provide downside protection in adverse scenarios. On balance, the risk-reward profile warrants caution and disciplined position management.
We rate NOVANTA INC's capital allocation as Poor. Key concerns include suboptimal returns on capital. Exemplary capital allocators generate ROE above 20% and maintain conservative leverage — NOVANTA INC significantly underperforms these benchmarks, raising questions about management's ability to create shareholder value.
Investors should scrutinize management's reinvestment decisions and balance sheet trajectory before committing capital. Poor capital allocation often compounds over time: overlevered balance sheets limit strategic flexibility, while low returns on capital destroy shareholder value. We would need to see sustained improvement in profitability metrics and balance sheet discipline before considering an upgrade.
In summary, NOVANTA INC receives a Hold rating with a composite score of 51.8/100 (rank #1720 of 7,333). Our quantitative framework assigns a Narrow Moat (41/100, trend: stable), High uncertainty, and Poor capital allocation. The average factor score across quality, value, momentum, stability, and investment is 53/100.
Our analysis supports a neutral stance on NOVANTA INC. While the quantitative profile is not weak enough to warrant selling, it lacks the multi-factor strength required for a buy recommendation. Existing holders should maintain positions and monitor for catalysts — either fundamental improvement or valuation compression — that would shift the risk-reward balance.
Analysis derived from Blank Capital Research quantitative terminal. For informational purposes only. No trade solicitation. Past performance not indicative of future results. Consult a qualified advisor.
We assign NOVANTA INC a Narrow Moat rating with a composite moat score of 41/100. The ROIC-WACC spread of -5.1% is the primary signal of economic value creation. The company possesses identifiable competitive advantages, though they are less entrenched than those of wide-moat peers. Our analysis indicates that NOVANTA INC can sustain above-average returns on invested capital for at least 10 years, with the strongest contributor being margin superiority at 14.7/20.
The strongest moat sources are margin superiority (14.7/20) and growth durability (11.8/20). GM 45% vs sector 43%, OM 11% vs sector 1%. Rev growth 5%, 10yr history. These pillars form the core of NOVANTA INC's competitive identity and are the primary drivers of excess returns in our framework.
Areas of relative weakness include financial resilience (2.5/20) and reinvestment efficiency (3.8/20). Interest coverage N/A, Net debt/EBITDA 10.7x. Improvement in these areas could meaningfully widen the moat over time, while deterioration would be an early warning of competitive erosion.
Our moat trend assessment is Stable. Multi-year ROIC and operating margin trajectories show neither meaningful improvement nor deterioration, suggesting the competitive position is steady. We expect NOVANTA INC's moat profile to remain largely unchanged absent a material shift in return on capital or industry dynamics.
Key profit drivers include gross margins of 45% providing a solid profitability foundation, operating margins of 11% reflecting effective cost management, moderate revenue growth of 5%. The margin cascade from 45% gross to 11% operating to 5.8% net reveals the company's cost structure and reinvestment intensity. Our analysis indicates that profit quality is adequate though not exceptional, with the quality factor at the 55th percentile.
The margin profile shows gross margins of 45%, operating margins of 11%, net margins of 5.8%. Return metrics include ROE of 6.9% and ROA of 3.7%. Relative to the Manufacturing sector, gross margins are 2.1 percentage points above the sector median of 43%, and ROE of 6.9% compares to a sector median of -2.5%.
The balance sheet reflects above-average leverage with D/E of 88%, revenue growth of 5%. The sector median D/E is 0%, putting NOVANTA INC at higher leverage than the typical peer. Overall balance sheet health is adequate for the current business environment.
Above 50MA
37.18%
Net New Highs
+51081
American Capital Management increased its Novanta position by 163,005 shares in Q4 2025 for approximately $18.56 million, bringing its total stake to 381,866 shares valued at $45.44 million. While the fund shows confidence in the company, Novanta faces headwinds including meager 1.4% revenue growth and a lofty 99x P/E ratio, though signs of market recovery in medical and industrial OEM sectors offer some optimism.
ACK Asset Management acquired 375,000 shares of Novanta worth $44.62 million in February 2026, making it a 5.6% position in the fund. Despite the stock being flat over the past year and underperforming the S&P 500, the investment suggests confidence in potential recovery as medical and advanced industrial demand rebounds. Novanta generated nearly $1 billion in trailing revenue with improving margins.
Novanta (NOVT) Q4 2025 earnings call recap: record revenue, surging bookings, 2026 guidance, margins, cash flow and M&A plans—read insights now.
BOSTON, February 23, 2026--Novanta Inc. (Nasdaq: NOVT) ("Novanta" or the "Company"), a trusted technology partner to medical and advanced technology equipment manufacturers, today reported financial results for the fourth quarter and full year 2025.
Novanta CEO Matthijs Glastra sold 6,500 shares worth ~$878,458 on Feb. 2, 2026, as part of a pre-established Rule 10b5-1 trading plan adopted in September 2025. The sale is not a warning sign, as the stock has surged 23% year-to-date in 2026 driven by strong business performance and 17% bookings growth. However, with a P/E ratio near 100, the analyst recommends selling rather than buying at current valuations.