Critical Analysis: Novanta (NOVT) and The Competition

Novanta (NASDAQ: NOVT) is one of 24 publicly-traded companies in the “Electronic Component” industry, but how does it compare to its rivals? We will compare Novanta to similar companies based on the strength of its risk, analyst recommendations, institutional ownership, dividends, earnings, profitability and valuation.

Insider and Institutional Ownership

79.0% of Novanta shares are owned by institutional investors. Comparatively, 56.8% of shares of all “Electronic Component” companies are owned by institutional investors. 8.3% of Novanta shares are owned by company insiders. Comparatively, 9.0% of shares of all “Electronic Component” companies are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Risk and Volatility

Novanta has a beta of 1.27, suggesting that its share price is 27% more volatile than the S&P 500. Comparatively, Novanta’s rivals have a beta of 1.03, suggesting that their average share price is 3% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Novanta and its rivals, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Novanta 0 0 1 0 3.00
Novanta Competitors 39 254 500 10 2.60

Novanta currently has a consensus price target of $54.00, suggesting a potential downside of 8.78%. As a group, “Electronic Component” companies have a potential downside of 1.96%. Given Novanta’s rivals higher probable upside, analysts plainly believe Novanta has less favorable growth aspects than its rivals.

Profitability

This table compares Novanta and its rivals’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Novanta 12.45% 18.29% 9.56%
Novanta Competitors -3.21% -2.78% 0.28%

Valuation & Earnings

This table compares Novanta and its rivals revenue, earnings per share (EPS) and valuation.

Gross Revenue Net Income Price/Earnings Ratio
Novanta $384.76 million $22.00 million 35.24
Novanta Competitors $1.21 billion $130.70 million 79.08

Novanta’s rivals have higher revenue and earnings than Novanta. Novanta is trading at a lower price-to-earnings ratio than its rivals, indicating that it is currently more affordable than other companies in its industry.

Summary

Novanta beats its rivals on 7 of the 13 factors compared.

Novanta Company Profile

Novanta Inc., formerly GSI Group Inc., designs, develops, manufactures and sells precision photonic and motion control components and subsystems. The Company’s segments are Photonics, Vision and Precision Motion. The Photonics segment designs, manufactures and markets photonics-based solutions, including carbon dioxide (CO2) laser sources, laser scanning and laser beam delivery products, to customers around the world. The Vision Technologies segment designs, manufactures and markets a range of medical grade technologies, including visualization solutions, imaging informatics products, optical data collection and machine vision technologies, radio frequency identification (RFID) technologies, and thermal printers, to customers around the world. The Company’s Precision Motion segment designs, manufactures and markets optical encoders, precision motors and other motion control technology, air bearing spindles and precision machined components to customers around the world.

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