Value
4.8/10data confidence 83%| Component | Sub-score |
|---|---|
| P/E | 0.0 |
| P/S | 6.6 |
| EV/EBITDA | 0.0 |
| Fwd P/E | 2.9 |
| PEG | 10.0 |
- ▸Forward P/E: 36.7x
- ▸PEG: 0.18
NOVT · Why this verdict
Why Novanta (NOVT) is rated HOLD
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictHOLD
Overall score5.3/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Novanta is a high-quality scientific instruments company with a perfect Piotroski score, excellent free cash flow conversion of 162%, and four consecutive earnings beats, but negative price momentum with a falling on-balance volume and a price already above analyst consensus targets reduce near-term appeal.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Novanta converts 162% of net income into free cash flow and has a perfect Piotroski F-Score of 9 out of 9, indicating exceptionally strong business quality with cash generation well in excess of reported earnings and robust across all financial health dimensions. Quality breakdown | Free cash flow as a percentage of net income remains above 130% and Piotroski F-Score stays at 8 or 9 over the next 12 months. | →Stable |
| CounterHigh free cash flow relative to net income in scientific instruments companies can partly reflect low current R&D intensity, and maintaining the score requires sustained investment in product innovation. | ||
Novanta has beaten earnings estimates in all 4 of the last 4 quarters, with an average positive surprise of 4.5%, and earnings estimates have been trending upward, suggesting the company is executing well in its medical and industrial technology markets. Earnings | Earnings beat streak extends to at least 2 more quarters with positive surprises above 3%. | →Stable |
| CounterAverage earnings surprises of only 4.5% are modest and could easily disappear with any cost pressure or demand softness in the medical device manufacturing sector. | ||
On-balance volume is declining, the momentum score of 3.5 is well below the gate threshold of 4.5, and volume distribution shows sellers are more active than buyers, indicating institutional selling pressure despite strong fundamentals. Momentum breakdown | On-balance volume reverses to a rising trend and momentum score recovers above 4.5 within 3 months. | →Stable |
| CounterNovanta remains above its 200-day moving average, and the momentum weakness may reflect a temporary rotation out of high-multiple industrials rather than fundamental deterioration. | ||
The current price of $156.63 is approximately 5% above the analyst consensus price target of $168.41 less a 15% haircut, meaning buyers at current prices are entering above where the analyst consensus models suggest fair value lies. Warnings | Analyst consensus price target is revised upward above $175 within 6 months as growth continues to be delivered. | →Stable |
| CounterHigh-quality technology companies with perfect Piotroski scores frequently trade above analyst targets because earnings growth compounding makes consensus targets perpetually lag market prices. | ||
Novanta converts 162% of net income into free cash flow and has a perfect Piotroski F-Score of 9 out of 9, indicating exceptionally strong business quality with cash generation well in excess of reported earnings and robust across all financial health dimensions.
→StableQuality breakdown
- Expectation
- Free cash flow as a percentage of net income remains above 130% and Piotroski F-Score stays at 8 or 9 over the next 12 months.
CounterHigh free cash flow relative to net income in scientific instruments companies can partly reflect low current R&D intensity, and maintaining the score requires sustained investment in product innovation.
Novanta has beaten earnings estimates in all 4 of the last 4 quarters, with an average positive surprise of 4.5%, and earnings estimates have been trending upward, suggesting the company is executing well in its medical and industrial technology markets.
→StableEarnings
- Expectation
- Earnings beat streak extends to at least 2 more quarters with positive surprises above 3%.
CounterAverage earnings surprises of only 4.5% are modest and could easily disappear with any cost pressure or demand softness in the medical device manufacturing sector.
On-balance volume is declining, the momentum score of 3.5 is well below the gate threshold of 4.5, and volume distribution shows sellers are more active than buyers, indicating institutional selling pressure despite strong fundamentals.
→StableMomentum breakdown
- Expectation
- On-balance volume reverses to a rising trend and momentum score recovers above 4.5 within 3 months.
CounterNovanta remains above its 200-day moving average, and the momentum weakness may reflect a temporary rotation out of high-multiple industrials rather than fundamental deterioration.
The current price of $156.63 is approximately 5% above the analyst consensus price target of $168.41 less a 15% haircut, meaning buyers at current prices are entering above where the analyst consensus models suggest fair value lies.
→StableWarnings
- Expectation
- Analyst consensus price target is revised upward above $175 within 6 months as growth continues to be delivered.
CounterHigh-quality technology companies with perfect Piotroski scores frequently trade above analyst targets because earnings growth compounding makes consensus targets perpetually lag market prices.
Per-dimension breakdown
Quality
5.9/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 1.7 |
| ROA | 3.0 |
| Gross margin | 4.8 |
| Op margin | 4.7 |
| Net margin | 2.7 |
| Current ratio | 9.4 |
| FCF quality | 10.0 |
| Moat | 7.1 |
| Piotroski F | 10.0 |
- ▸Excellent cash conversion: 162% FCF/NI
- ▸Strong Piotroski F-Score: 9/9
Growth
7.5/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 5.1 |
| EPS growth | 10.0 |
Momentum
4.9/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.5 |
| MACD | 0.0 |
| OBV | 10.0 |
| MA position | 9.0 |
| Volume | 0.0 |
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
6.4/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 6.4 |
| Price target | 6.4 |
| erm sentiment | 6.3 |
- ▸Light analyst coverage (2.0) — signal dampened
Insider
3.9/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 4.5 |
| insider conviction | 2.0 |
| holder change | 5.2 |
- ▸Modest insider selling — $3,922,190 (0.072% of mkt cap)
Peer rank
2.1/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 2.9 |
| quality rank | 1.1 |
| growth rank | 4.3 |
Technical
5.9/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 4.6 |
| support resistance | 5.3 |
| 52w position | 8.6 |
| gap | 5.0 |
Risk (lower is worse)
4.4/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 3.1 |
| days to cover | 2.1 |
| volatility | 0.0 |
| put call | 10.0 |
| implied vol | 3.2 |
| max pain risk | 3.0 |
| beta | 4.4 |
| debt equity | 9.1 |
- ▸High IV: 61%
- ▸Above max pain $145
Catalyst
6.8/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 7.5 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 4.7 |
- ▸Perfect beat streak: 4Q
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position. | News modifier +1 (SELL_IF_HOLDING → HOLD_IF_HOLDING).
Engine technical detail
verdict_path:
L4:PATH_F_SELL|L3:NEWS_MOD=+1Passed (7)
- MOMENTUM:4.9>=4.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:40d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-0.7=NEGATIVE
Warning (1)
- MOMENTUM:4.9<5.5 (soft — BUY_NOW allowed but watch)
Reward-to-Risk
-0.65
Upside
-6.9%
Downside
10.7%
Sizing output
AVOID
SetupRANGE_BOUND — RSI 46 mid-range, Bollinger mid-band
EdgeNO_EDGE — No clear edge identified
SuitabilityAGGRESSIVE — Beta 1.68>1.3
Investment implication
The F-path SELL output reflects an overall score of 5.3 below the 5.4 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Growth at 7.5) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( ASYMMETRY:-0.7=NEGATIVE) reinforce the read. Current asymmetry R:R is -0.65 — supplementary context, not the trigger for this path.
The strongest dimensions are Growth at 7.5, Catalyst at 6.8, and Sentiment at 6.4; the weakest are Peer rank at 2.1, Insider at 3.9, and Risk (lower is worse) at 4.4. The V9 engine flagged 1 failed gate with 1 warning, producing an asymmetric reward-to-risk of -0.65 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Novanta converts 162% of net income into free cash flow and has a perfect Piotroski F-Score of 9 out of 9, indicating exceptionally strong business quality with cash generation well in excess of reported earnings and robust across all financial health dimensions.
Trip ifFree cash flow falls below 100% of net income for 2 consecutive quarters.
- P2Novanta has beaten earnings estimates in all 4 of the last 4 quarters, with an average positive surprise of 4.5%, and earnings estimates have been trending upward, suggesting the company is executing well in its medical and industrial technology markets.
Trip ifEarnings surprise falls below 0% in at least 2 of the next 4 quarters.
- P3On-balance volume is declining, the momentum score of 3.5 is well below the gate threshold of 4.5, and volume distribution shows sellers are more active than buyers, indicating institutional selling pressure despite strong fundamentals.
Trip ifPrice drops below $140 while on-balance volume remains in a declining trend.
- P4The current price of $156.63 is approximately 5% above the analyst consensus price target of $168.41 less a 15% haircut, meaning buyers at current prices are entering above where the analyst consensus models suggest fair value lies.
Trip ifPrice rises above $175 while analyst consensus target remains below $165.