Start here if you're new
what it is
Novanta sells the parts inside medical and industrial machines that make them move, see, and cut.
how it gets paid
Last year Novanta made $981M in revenue. Precision motion control was the main engine at $300M, or 31% of sales.
why it's growing
Revenue grew 3.3% last year. Among the highlights this year should be strong demand for novanta’s second generation of specialized pumps called insuflattors.
what just happened
Novanta beat with $1.01 EPS and 44.6% gross margin.
At a glance
B+ balance sheet — decent shape, but not bulletproof
65/100 earnings predictability — reasonably predictable
42.3x trailing p/e — you're paying up for this one
11.5% return on capital — nothing to write home about
xvary composite: 57/100 — below average
What they do
Novanta sells the parts inside medical and industrial machines that make them move, see, and cut.
Novanta sits inside equipment that gets requalified (retested and reapproved) by customers, so switching vendors is paperwork, testing, and delay. The company has 3,000 employees and two reportable segments, split 52% and 48%. You are buying a business that lives where machine makers hate change.
How they make money
$981M
annual revenue · their business grew +3.3% last year
Precision motion control
$300M
3D visualization systems
$230M
Laser technology
$171M
Medical and industrial subsystems
$280M
The products that matter
precision components for OEMs
core technology platforms
$981M company revenue
this is the full $981M business, but the snapshot data does not break out segment sales. what you do know is that 65% of revenue is concentrated enough to matter.
concentrated
specialized medical pumps
second-generation insuflattors
2026 growth watch
management tied 2026 expectations to 6–8% organic growth, and demand for these medical pumps was one of the clearest product-specific positives mentioned.
growth lever
Key numbers
$981M
annual revenue
You are buying a $981M business, not a tiny niche shop. That size helps, but it still trades like a premium name.
42.3x
trailing P/E
You pay 42.3 dollars for each dollar of trailing profit. That is a lot for 3.3% revenue growth.
11.5%
return on capital
Management turns invested money into 11.5 cents of operating profit. That is solid, but not enough to justify a wild multiple alone.
$446M
long-term debt
Debt is $446M, or 8% of capital. That keeps the balance sheet workable, but not bulletproof.
Financial health
B+
strength
- balance sheet grade B+ — solid but not elite
- risk rank 3 — safer than 50% of stocks
- price stability 40 / 100
- long-term debt $446M (8% of capital)
- net profit margin 14.5% — keeps 14 cents of every dollar in revenue
- return on equity 13% — $0.13 profit for every $1 investors have put in
B+ — functional but not a standout on the balance sheet.
Total return vs. market
You invested $10,000 in NOVT 3 years ago → it's now worth $8,520.
The index would have given you $14,770.
source: institutional data · total return
What just happened
beat estimates
Novanta beat with $1.01 EPS and 44.6% gross margin.
Revenue was $722M for the latest quarter, up 191% vs. prior year. EPS of $1.01 beat the $0.88 estimate by $0.13.
$722M
revenue
$1.01
eps
44.6%
gross margin
gross margin
44.6% gross margin is the quiet win. It shows Novanta kept almost 45 cents of every sales dollar before overhead.
-
novanta probably had a pretty strong fourth quarter.
-
indeed, if the outlook that management provided in early november was right, the supplier of medical and industrial subsystems earned between $0.87 and $0.93 a share during the final three months of 2025, up 14%–22% from $0.76 in the prior-year period.
-
key assumptions included top-line growth of 6%–8% and profit-margin expansion (based on adjusted ebitda) of at least 260 basis points.
-
leadership also recently sounded fairly upbeat about 2026.
-
it is on record saying that overall revenues on an organic basis (stripping out currency and m&a effects) should rise at a mid-single-digit clip this year, after what was likely 12 months of zero underlying growth for 2025, as a whole.among the highlights this year should be strong demand for novanta’s second generation of specialized pumps called insuflattors. insuflattors are generally used to temporarily expand body cavities during surgical procedures, which gives doctors not only greater room to maneuver but also greater visibility.
source: company earnings report, 2026
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What could go wrong
the #1 risk is missing the 6–8% organic growth target while the stock still trades at 42.3x earnings.
med
growth misses the multiple
Revenue grew 35.8% last year, but the FY2026 revenue estimate is only about $1B versus $981M today. That's a much calmer setup than the headline growth number suggests.
If organic growth comes in below the 6–8% target, the stock stops looking like a premium compounder and starts looking simply expensive.
med
concentrated revenue base
65% of revenue sits in one concentrated bucket. On a $981M base, that exposes roughly $638M to one demand pattern instead of several.
If that bucket slows, diversification will not save the quarter. It will magnify the miss.
med
margin slippage
A 21.0% operating margin and 13.4% net margin say the business is good. They also create a clear benchmark. If costs rise or pricing weakens, the market will notice quickly.
A premium multiple with shrinking margins is how good businesses become bad stocks.
med
oem spending cycles
Novanta sells into medical and industrial equipment makers. That means demand flows through customers' order books and capital-spending plans, not directly from end users.
A slower OEM spending environment can pressure both the $248M quarterly revenue run-rate and investor confidence in the 2026 outlook.
Miss the growth target and you are left paying 42.3x trailing earnings for a $981M business with roughly $638M tied to one concentrated revenue bucket.
source: institutional data · regulatory filings · risk analysis
Pay attention to
earnings
next quarterly print
Watch whether the $248M revenue quarter turns into a cleaner EPS recovery. At 42.3x trailing earnings, good-enough numbers are not always enough.
trend
organic growth vs. the 6–8% target
This is the guidance range doing the heavy lifting in the story right now. If management starts talking below it, pay attention fast.
metric
operating margin
21.0% is a strong margin for a component supplier. You want that number holding steady or improving, not leaking lower.
risk
revenue concentration
65% of sales in one concentrated bucket means any customer or end-market wobble can show up faster than you want.
Analyst rankings
short-term outlook
average
momentum score 3 — in human-speak, analysts think the stock is behaving normally, not breaking out in either direction.
risk profile
average
stability score 3 — typical risk for a stock like this. not a bunker, not a rollercoaster.
chart momentum
below average
technical score 4 — the chart is not giving you much help right now.
earnings predictability
65 / 100
earnings are reasonably forecastable, but not clean enough to assume every quarter will be smooth.
source: institutional data
Institutional activity
153 buyers vs. 174 sellers in 3q2025. total institutional holdings: 35.2M shares.
source: institutional data
Price targets
3-5 year target range
$103
$245
$138
current price
$174
target midpoint · +27% from current · 3-5yr high: $215 (+55% · 12% ann'l return)
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