# Novanta (NOVT.US)

Canonical: https://gigainvestors.com/s/NOVT

Analysis as of: 2026-10-16T07:30:38.659Z. Financial observations: FY1998–FY2026.

Listing currency: USD. Reporting currency: USD.

## Verdict

Not a wonderful business

Quality tests for Buy: not passed (profit record: pass; earnings resilience is evidence only). Published buy qualification: no.

Share price: $134.80 per share; close as of 2026-10-15.

Estimated value: low $50.59 per share, central $55.02 per share, high $60.92 per share. Buy at or below the central value $55.02 per share. Valuation as of 2026-10-16T07:30:38.659Z; scenarios are not confidence intervals.

Expected annual return: 5.1% at the stated quote. About 5.1% a year at today's price (required return 10.0%). required return 10.0% a year (10% floor; US 10-year bond 5.1% + 4 points).

## Checklist

### understandable: pass

- 1 revenue decline in the last 10 years (informational)

- Financial history: 10 years

- Years with declining revenue: 1

- Years with a net loss: 0

- Operating margin variation: 0.12×

Chart: Operating margin; fiscal year observations.

- FY2017: 0.11×

- FY2018: 0.12×

- FY2019: 0.09×

- FY2020: 0.09×

- FY2021: 0.09×

- FY2022: 0.12×

- FY2023: 0.13×

- FY2024: 0.12×

- FY2025: 0.12×

- LTM to Jun 2026: 0.10×

### moat: pass

- ROIC, median of available years: 16.7%

- ROIC, second-lowest year: 14.4%

- Typical minus recent gross margin: -0.0 pp

- Typical gross margin (annual median): 42.5%

- Recent gross margin (lower of latest and 3-year median): 42.5%

- Years with nonpositive capital: 0

- Capital spending / revenue: 1.9%

- ROIC including acquisitions, ten-year median: 10.9%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2017: 20.0%

- FY2018: 21.5%

- FY2019: 14.5%

- FY2020: 16.0%

- FY2021: 13.7%

- FY2022: 17.9%

- FY2023: 19.7%

- FY2024: 17.3%

- FY2025: 14.4%

- LTM to Jun 2026: 15.5%

### economics: pass

- Owner earnings / net income, 5-yr: 1.53×

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: $481M

- Net income, five-year total: $315M

- Return on incremental invested capital: >100%

- Working capital / revenue, annual change: 0.3 pp

- Working capital / revenue, change between three-year averages: 2.0 pp

- Working capital / revenue, final three-year average: 25.9%

Chart: Annual owner cash / profit; fiscal year observations.

- FY2021: 1.42×

- FY2022: 1.45×

- FY2023: 1.37×

- FY2024: 1.60×

- FY2025: 1.86×

### management: pass

- Historical market-dollar context (not the management verdict): 2016 to 2025 (9 years)

- buybacks unrelated to price (informational)

- ROIC first 3 years vs last 3 years: 20.0% vs 17.3%

- Per-share earnings: 1.02 to 1.77 (three-year endpoint medians)

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 10-year annual growth: 0.5%

- Ordinary dilution, 5-year annual growth: 0.6%

- Market cap gain: $3.5B

- Cumulative retained earnings: $489M

- Diluted shares, 10-year annual growth: 0.5%

- Diluted shares, 5-year annual growth: 0.6%

- $1 test, starting fiscal year: FY2016

- $1 test, ending fiscal year: FY2025

- Per-share value growth: 7.1%

- Per-share value change: $0.75

- Per-share value, starting three-year median: $1.02

- Per-share value, ending three-year median: $1.77

- Buybacks concentrated in cheaper years (correlation): -0.15

- Average buyback yield: 0.3%

- Buyback history: 10 years

- Debt-funded buybacks: No

- Acquisition spending: $722M

- Cumulative net income, 10 years: $532M

- ROIC, first three-year median: 20.0%

- ROIC, last three-year median: 17.3%

Chart: Earnings per share; fiscal year observations.

- FY2016: $0.63

- FY2017: $1.70

- FY2018: $1.38

- FY2019: $1.15

- FY2020: $1.25

- FY2021: $1.41

- FY2022: $2.06

- FY2023: $2.02

- FY2024: $1.77

- FY2025: $1.47

### accounting: fail

- restructuring or one-time charges in at least three of five years

- stock compensation exceeds 15% of operating cash flow

- Sloan accruals: -0.6%

- Receivables to sales index (DSRI): 1.19×

- Restructuring years, last five: 5

- Stock compensation / operating cash flow: 46.1%

- Earnings backed by cash: Yes

- Operating cash / earnings: 1.19×

- Accounting red flags: 2

- Goodwill and intangibles / equity: 0.63×

Chart: Sloan accruals; fiscal year observations.

- FY2016: -6.1%

- FY2017: -0.5%

- FY2018: -5.6%

- FY2019: -2.6%

- FY2020: -11.1%

- FY2021: -3.6%

- FY2022: -1.3%

- FY2023: -3.8%

- FY2024: -6.8%

- FY2025: -0.6%

## Holders

- [Robert Torray](https://gigainvestors.com/T): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Dan Davidowitz](https://gigainvestors.com/pcm): tracked 13F investor; follow the investor page for holding quarter and amounts.

## Price story

Down 27% since Jun 2023 · "NOVT Q2 Deep Dive: Medical Device Growth Offset by Guidance Caution and Trade Uncertainty" (finance.yahoo.com, Aug 2025) · sales +5%

Story as of 2026-10-16T09:59:16.024Z; price observation 2026-10-15.

Price needs cash profits to grow 15.6% a year for ten years

- 2025-08-13: NOVT Q2 Deep Dive: Medical Device Growth Offset by Guidance Caution and Trade Uncertainty ([finance.yahoo.com](https://finance.yahoo.com/news/novt-q2-deep-dive-medical-032919286.html))

- 2025-11-05: Novanta (NOVT): Profit Margin Drops on $26M One-Off Loss, Raising Questions About Premium Valuation ([finance.yahoo.com](https://finance.yahoo.com/news/novanta-novt-profit-margin-drops-071602529.html))

- 2026-05-16: NOVT Q1 Deep Dive: AI-Driven Demand and New Products Propel Growth Amid Margin Pressures ([finance.yahoo.com](https://finance.yahoo.com/markets/stocks/articles/novt-q1-deep-dive-ai-050055870.html))

- 2026-08-05: Novanta’s (NASDAQ:NOVT) Q2 CY2026 Sales Top Estimates, Guides for Strong Full-Year Sales ([finance.yahoo.com](https://finance.yahoo.com/markets/stocks/articles/novanta-nasdaq-novt-q2-cy2026-205855165.html))

### Sales · FY2025–2026

sales +5%; source https://www.sec.gov/Archives/edgar/data/1076930/000119312526064230/novt-20251231.htm; observed 2026-02-23.

- FY2017: $521M 

- FY2018: $614M 

- FY2019: $626M 

- FY2020: $591M 

- FY2021: $707M 

- FY2022: $861M 

- FY2023: $882M 

- FY2024: $949M 

- FY2025: $981M 

- FY2026: $1.0B 

### Gross margin · FY2026

gross margin 42.5%; source https://www.sec.gov/Archives/edgar/data/1076930/000119312526064230/novt-20251231.htm; observed 2026-02-23.

- FY2017: 42.3% 

- FY2018: 42.6% 

- FY2019: 41.9% 

- FY2020: 41.4% 

- FY2021: 42.5% 

- FY2022: 44.0% 

- FY2023: 45.4% 

- FY2024: 44.4% 

- FY2025: 41.6% 

- FY2026: 42.5% 

## Owner memo

Memo as of 2026-10-16T08:06:05.509Z.

### How it makes money

Operates in scientific & technical instruments; annual sales are USD 980.6 million.

- Source: https://www.sec.gov/Archives/edgar/data/1076930/000119312526064230/novt-20251231.htm (filed 2026-02-23); FY2025: revenue 980600000; grossProfit 407807000; margin = grossProfit / revenue.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); NOVT.US: Novanta Inc., together with its subsidiaries, provides precision medicine, precision manufacturing, medical solutions, robotics and automation solutions, and advanced surgery solutions in the United States and internationally. The company operates Automation Enabling Technologies and Medical Solutions segments. The Precision Medicine and Manufacturing segment designs, manufactures, and markets laser beam steering and scanning solutions, laser sources, robotic and precision motion, robotic end-of-arm tooling, and bearing spindles. This segment serves advanced industrial processes, advanced industrial and medical robotics, other medical and life science automation applications, and medical laser procedures, such as ophthalmology applications. The Medical Solutions segment provides a range of medical grade technologies, including medical insufflators, pumps, and related disposables; imaging, identification and RFID solutions; advanced motion control solutions; and light engines, and integrated operating room technologies. The company was formerly known as GSI Group, Inc. and changed its name to Novanta Inc. in May 2016. Novanta Inc. was incorporated in 1968 and is based in Bedford, Massachusetts.

### Why customers stay

Margins ranged from 41.6% to 45.4% during 2023–25; it earns 16.7% on its capital.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-23); FY2023: grossProfit / revenue = 45.4%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-23); FY2024: grossProfit / revenue = 44.4%.

- Source: https://www.sec.gov/Archives/edgar/data/1076930/000119312526064230/novt-20251231.htm (filed 2026-02-23); FY2025: grossProfit / revenue = 41.6%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-23); 10-year return on capital observations [[2017,0.20037176359497755],[2018,0.21450916226152617],[2019,0.14520298325893796],[2020,0.16022819305562322],[2021,0.1373711616697301],[2022,0.17947271504504558],[2023,0.19685187369949061],[2024,0.17283428903761763],[2025,0.1436634913774841],[2026,0.1546821398146064]]; median 0.16653124104662043. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Where the cash goes

Paid no dividends in 10 years; bought back USD 39.3 million of shares.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-23); FY2016: growth capex 0; upkeep 8462000; cash acquisitions 8958000; owner earnings 33898000. Growth capex plus acquisitions / owner earnings = 0.2642633783704053.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-23); FY2017: growth capex 0; upkeep 9094000; cash acquisitions 168332000; owner earnings 81715000. Growth capex plus acquisitions / owner earnings = 2.059988986110261.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-23); FY2018: growth capex 0; upkeep 14658000; owner earnings 71503000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-23); FY2019: growth capex 0; upkeep 10743000; owner earnings 68310000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-23); FY2020: growth capex 0; upkeep 10524000; owner earnings 72290000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-23); FY2021: growth capex 0; upkeep 22176000; owner earnings 71549000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-23); FY2022: growth capex 0; upkeep 19643000; owner earnings 107566000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-23); FY2023: growth capex 0; upkeep 19961000; owner earnings 99529000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-23); FY2024: growth capex 0; upkeep 17162000; owner earnings 102488000. Growth capex / owner earnings = 0.

- Source: https://www.sec.gov/Archives/edgar/data/1076930/000119312526064230/novt-20251231.htm (filed 2026-02-23); FY2025: growth capex 0; upkeep 15627000; owner earnings 100134000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-23); Dividend observations: [[2016,0],[2017,0],[2018,0],[2019,0],[2020,0],[2021,0],[2022,0],[2023,0],[2024,0],[2025,0]]. Zero only counted when supported by a complete cash-flow statement.

- Source: https://www.sec.gov/Archives/edgar/data/1076930/000119312526064230/novt-20251231.htm (filed 2026-02-23); FY2025: cash repurchases 39278000 USD.

### Are managers owners

Insiders own 0.7% of the company.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); NOVT.US SharesStats.PercentInsiders = 0.707 percentage points; cache date 2026-10-16.

### What could break it

US import tariffs could raise product costs.

- Source: https://www.sec.gov/Archives/edgar/data/1076930/000119312526064230/novt-20251231.htm (filed 2026-02-23); nd €2.0 million ($2.2 million) related to a purchase price holdback. The purchase includes up to €20.0 million ($21.9 million) in contingent consideration payable upon the achievement of certain revenue targets through December 2027. In addition, we have granted equity totaling €9.0 million ($9.9 million) to Keonn employees. Keonn is included in the Medical Solutions segment.

Business Environment

In recent years, the global economy has faced significant challenges, including inflation, supply chain disruptions, business slowdowns, labor shortages, and market volatility, and new and proposed tariffs announced by the U.S. Presidential Administration have introduced additional uncertainty. We address macroeconomic challenges by continuing to execute our strategy. There have been improvements in the supply chain with better on-time deliveries, and recent efforts have successfully addressed talent shortages. However, uncertainty remains about overall macroeconomic conditions due to geopolitical tensions and changes in trade policies.

Economic tensions and changes in trade policies, such as higher tariffs, retaliatory measures, renegotiated free trade agreements, changes in government funding, and the ongoing impact from prolonged inflationary pressures have impacted the global market for our products and the related cost to manufacture.

2

Acquisitions

We continuously evaluate our business mix and financial performance and have executed a series of acquisitions in line with our strategy. The following table summarizes significant acquisitions since 2017:

Company

Year

of Acquisition

Total Purchase Price

(in millions)

Keonn Technologies, S.L.

2025

$

75.1

Motion Solutions Parent Corp.

2024

$

192.0

MPH Medical Devices S.R.O.

2022

$

22.6

ATI Industrial Automation, Inc.

2021

$

223.9

Schneider Electric Motion USA, Inc.

2021

$

118.6

ARGES GmbH

2019

$

73.2

Zettlex Holdings Limited

2018

$

32.0

Laser Quantum Limited (24%)(1)

2018

$

45.1

Laser Quantum Limited (35%)

2017

$

31.1

W.O.M. World of Medicine GmbH

2017

$

134.9

(1)

After the acquisition of the remaining (approximately 24%) noncontrolling interests of Laser Quantum Limited (“Laser Quantum”) in September 2018, we owned 100% of the outstanding equity of Laser Quantum.

Segments

Our Chief Operating Decision Maker (“CODM”) is our Chief Executive Officer. Our CODM utilizes financial information to make decisions about allocating resources and assessing performance for the entire Company. Based upon the information provided to the CODM, we have determined that we have two reportable segments.

Our reportable segments have been identified based on commonality and adjacency of end markets and customers amongst our individual product lines. We evaluate the performance of, and allocate resources to, our segments based on revenue, gross profit and operating profit. T

### What the price says

The price assumes cash profits grow 15.6% yearly over ten years; actual growth was 6.8%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-23); Ten-year compound average after fade. Initial solved rate 0.21218885828666534. Price 134.8; FX 1; discount 0.1; same standard ten-year fade to terminal 0.03. FY2015 owner earnings/share 1.4120366382404457 → FY2025 2.728298185384993. Closing-price date 2026-10-15.

## Monthly share-price history (USD per share)

- 2016-10: $17.45 per share

- 2016-11: $20.25 per share

- 2016-12: $21.00 per share

- 2017-01: $22.35 per share

- 2017-02: $24.30 per share

- 2017-03: $26.55 per share

- 2017-04: $28.05 per share

- 2017-05: $34.00 per share

- 2017-06: $36.00 per share

- 2017-07: $36.90 per share

- 2017-08: $39.10 per share

- 2017-09: $43.60 per share

- 2017-10: $47.30 per share

- 2017-11: $48.10 per share

- 2017-12: $50.00 per share

- 2018-01: $57.90 per share

- 2018-02: $55.85 per share

- 2018-03: $52.15 per share

- 2018-04: $58.80 per share

- 2018-05: $64.85 per share

- 2018-06: $62.30 per share

- 2018-07: $62.35 per share

- 2018-08: $76.60 per share

- 2018-09: $68.40 per share

- 2018-10: $58.21 per share

- 2018-11: $64.93 per share

- 2018-12: $63.00 per share

- 2019-01: $69.68 per share

- 2019-02: $81.73 per share

- 2019-03: $84.73 per share

- 2019-04: $87.02 per share

- 2019-05: $80.02 per share

- 2019-06: $94.30 per share

- 2019-07: $84.09 per share

- 2019-08: $75.00 per share

- 2019-09: $81.72 per share

- 2019-10: $89.05 per share

- 2019-11: $93.18 per share

- 2019-12: $88.44 per share

- 2020-01: $90.73 per share

- 2020-02: $89.21 per share

- 2020-03: $79.88 per share

- 2020-04: $86.89 per share

- 2020-05: $102.71 per share

- 2020-06: $106.77 per share

- 2020-07: $103.68 per share

- 2020-08: $107.17 per share

- 2020-09: $105.34 per share

- 2020-10: $108.72 per share

- 2020-11: $119.98 per share

- 2020-12: $118.22 per share

- 2021-01: $124.92 per share

- 2021-02: $132.33 per share

- 2021-03: $131.89 per share

- 2021-04: $131.71 per share

- 2021-05: $138.97 per share

- 2021-06: $134.76 per share

- 2021-07: $140.41 per share

- 2021-08: $153.22 per share

- 2021-09: $154.50 per share

- 2021-10: $172.56 per share

- 2021-11: $161.45 per share

- 2021-12: $176.33 per share

- 2022-01: $138.10 per share

- 2022-02: $136.63 per share

- 2022-03: $142.29 per share

- 2022-04: $128.70 per share

- 2022-05: $122.96 per share

- 2022-06: $121.27 per share

- 2022-07: $154.20 per share

- 2022-08: $133.69 per share

- 2022-09: $115.65 per share

- 2022-10: $141.40 per share

- 2022-11: $157.75 per share

- 2022-12: $135.87 per share

- 2023-01: $161.47 per share

- 2023-02: $156.91 per share

- 2023-03: $159.09 per share

- 2023-04: $152.84 per share

- 2023-05: $165.60 per share

- 2023-06: $184.10 per share

- 2023-07: $176.90 per share

- 2023-08: $166.98 per share

- 2023-09: $143.44 per share

- 2023-10: $132.06 per share

- 2023-11: $144.44 per share

- 2023-12: $168.41 per share

- 2024-01: $154.55 per share

- 2024-02: $172.94 per share

- 2024-03: $174.77 per share

- 2024-04: $156.50 per share

- 2024-05: $162.16 per share

- 2024-06: $163.11 per share

- 2024-07: $181.18 per share

- 2024-08: $183.28 per share

- 2024-09: $178.92 per share

- 2024-10: $170.24 per share

- 2024-11: $166.98 per share

- 2024-12: $152.77 per share

- 2025-01: $149.66 per share

- 2025-02: $144.64 per share

- 2025-03: $127.87 per share

- 2025-04: $118.86 per share

- 2025-05: $123.82 per share

- 2025-06: $128.93 per share

- 2025-07: $123.02 per share

- 2025-08: $116.41 per share

- 2025-09: $100.15 per share

- 2025-10: $127.01 per share

- 2025-11: $113.66 per share

- 2025-12: $118.99 per share

- 2026-01: $134.54 per share

- 2026-02: $134.43 per share

- 2026-03: $118.11 per share

- 2026-04: $129.53 per share

- 2026-05: $159.33 per share

- 2026-06: $162.24 per share

- 2026-07: $142.55 per share

- 2026-08: $146.22 per share

- 2026-09: $142.19 per share

- 2026-10: $134.80 per share

## Annual estimated value (USD per share)

- FY2016: low $12.34 per share, central $13.81 per share, high $15.75 per share

- FY2017: low $16.77 per share, central $18.73 per share, high $21.34 per share

- FY2018: low $24.00 per share, central $27.04 per share, high $31.08 per share

- FY2019: low $24.28 per share, central $27.37 per share, high $31.48 per share

- FY2020: low $24.25 per share, central $27.16 per share, high $31.02 per share

- FY2021: low $28.02 per share, central $31.48 per share, high $36.09 per share

- FY2022: low $32.81 per share, central $37.01 per share, high $42.61 per share

- FY2023: low $32.62 per share, central $36.78 per share, high $42.32 per share

- FY2024: low $35.05 per share, central $39.52 per share, high $45.48 per share

- FY2025: low $41.37 per share, central $45.72 per share, high $51.51 per share

Historical values use today's bond yield for every fiscal year

Historical values use today's FX rate into trading currency for every fiscal year

Historical values use current restated fundamentals and current commodity classification; they are not point-in-time estimates

## Sources

[Original 10-K filing](https://www.sec.gov/Archives/edgar/data/1076930/000119312526064230/novt-20251231.htm); period 2025-12-31, filed 2026-02-23.

Estimates depend on assumptions and are not guarantees or investment advice. Underlying data remains subject to its source licenses; public reading does not grant bulk redistribution rights.

## Reported holder observations

- [Robert Torray](https://gigainvestors.com/T): 11,141 NOVT shares; USD 1,808,000 reported position value; 0.27% of portfolio; new; quarter 2026 Q2.
- [Dan Davidowitz](https://gigainvestors.com/pcm): 13,366 NOVT shares; USD 2,169,000 reported position value; 0.02% of portfolio; new; quarter 2026 Q2.

# NOVT — Novanta Inc.

Held by 2 investors · USD 3,977,000 total · 2026 Q2 · reported price USD 162.28 (split-adjusted).
Page: https://gigainvestors.com/s/NOVT

## Holders (2026 Q2)

| Investor | Value | % of their portfolio | This quarter |
|---|---:|---:|---|
| Dan Davidowitz (https://gigainvestors.com/pcm) | USD 2,169,000 | <0.1% | new |
| Robert Torray (https://gigainvestors.com/T) | USD 1,808,000 | 0.3% | new |

## Total held by quarter

- 2026 Q2: USD 3,977,000 · 2 holders · USD 162.28