Novanta Inc. Common Stock (NOVT)

FairStock Score: 36/100 — MIXED

Key Financials

AI Analysis

AI-generated, general educational analysis — not personal investment advice.

Novanta is a $5.5 billion maker of precision medical and automation components. The business has real customers in medical, robotics, and advanced surgery, but the returns are not yet those of a high-quality compounder. In fiscal Q2 2026, the quarter ended 2026-07-03, revenue was $265.8 million and net income was $12.5 million, or $0.30 diluted EPS. That was better than fiscal Q2 2025, the quarter ended 2025-06-27, when revenue was $241.0 million and net income was $4.5 million, or $0.12 diluted EPS. Still, fiscal 2025, the year ended 2025-12-31, showed revenue of $980.6 million but net income of $53.8 million, down from $64.1 million in fiscal 2024 and $72.9 million in fiscal 2023. Revenue is growing, but profits have not kept pace. FairStock classifies it as a slow grower, with profit growing 3.9% a year over five years and revenue 10.7%. Returns on equity and capital are modest at 5.11% and 4.09%. The balance sheet is reasonable: debt-to-equity 0.18 and Altman Z-score 7.21. Free cash flow is $114.3 million, a 2.1% yield. But at $145.55 on 2026-10-13, the FairStock P/E is 92.12, EV/EBITDA is 27.93, and the Graham Number is $38.98, implying the price is very rich relative to current earnings and book value. I want to see durable margin improvement and higher returns before calling this a bargain. The FairStock PEG of 0.52 is the lone value signal, but it rests on elevated profit growth; the five-year record is slower.

In plain English: Novanta makes precision parts and instruments used in medical equipment, robots, and factory automation. Sales have been growing, but profits have been uneven and the money it earns on its assets is low. At the 2026-10-13 close of $145.55, the stock looks expensive compared with its current earnings and book value, even though the company generates positive cash flow.

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Data as of 2026-10-13 close · note generated 2026-10-15 · model deepseek-flash

Sources (SEC EDGAR): fiscal Q2 2026 10-Q (period ended 2026-07-03) · fiscal Q1 2026 10-Q (period ended 2026-04-03) · fiscal Q3 2025 10-Q (period ended 2025-09-26) · fiscal Q2 2025 10-Q (period ended 2025-06-27) · FY2025 10-K (period ended 2025-12-31) · FY2024 10-K (period ended 2024-12-31) · FY2023 10-K (period ended 2023-12-31)

Fundamentals from company filings and market-data providers; prices are end-of-day, not real-time. AI-generated analysis is general and educational — not personal investment advice. Scoring methodology · Score test · Disclaimer