Zacks Research Downgrades Nova (NASDAQ:NVMI) to Hold

Key Points

• Zacks Research downgraded Nova from “strong buy” to “hold,” although the broader analyst consensus remains “Moderate Buy,” with eight Buy ratings and three Holds and an average price target of $514.44.
• Nova shares opened at $394.48, while the company’s latest quarterly results exceeded expectations: adjusted EPS was $2.51 versus $2.41 expected, and revenue rose 15.9% year over year to $254.96 million.
• The board authorized a $200 million share repurchase program, allowing Nova to buy back up to 1.9% of outstanding shares; institutional investors own nearly 83% of the company.

Nova (NASDAQ:NVMI - Get Free Report) was downgraded by equities research analysts at Zacks Research from a "strong-buy" rating to a "hold" rating in a research note issued on Monday, Zacks reports.

A number of other brokerages have also recently weighed in on NVMI. Needham & Company LLC reduced their price objective on Nova from $640.00 to $570.00 and set a "buy" rating for the company in a research note on Friday, August 7th. Morgan Stanley raised their price objective on shares of Nova from $494.00 to $540.00 and gave the stock an "equal weight" rating in a research report on Monday, July 6th. Cantor Fitzgerald reduced their target price on shares of Nova from $600.00 to $500.00 and set an "overweight" rating for the company in a report on Friday, August 7th. Citigroup dropped their price target on Nova from $595.00 to $550.00 and set a "buy" rating on the stock in a research report on Monday, August 10th. Finally, Evercore set a $475.00 target price on Nova in a research note on Friday, August 7th. Eight equities research analysts have rated the stock with a Buy rating and three have assigned a Hold rating to the company. Based on data from MarketBeat, Nova has an average rating of "Moderate Buy" and a consensus target price of $514.44.

Nova Stock Up 0.4%

Shares of NVMI opened at $394.48 on Monday. The company has a market capitalization of $12.54 billion, a price-to-earnings ratio of 48.82, a price-to-earnings-growth ratio of 1.96 and a beta of 1.79. Nova has a 52-week low of $266.43 and a 52-week high of $615.99. The stock has a 50 day moving average price of $376.12 and a 200 day moving average price of $453.73.

Nova (NASDAQ:NVMI - Get Free Report) last issued its quarterly earnings data on Friday, August 7th. The semiconductor company reported $2.51 earnings per share for the quarter, topping the consensus estimate of $2.41 by $0.10. The business had revenue of $254.96 million during the quarter, compared to the consensus estimate of $250.33 million. Nova had a net margin of 28.84% and a return on equity of 21.41%. The company's revenue was up 15.9% compared to the same quarter last year. During the same quarter in the previous year, the firm earned $2.20 EPS. On average, equities analysts anticipate that Nova will post 9.89 EPS for the current fiscal year.

Nova announced that its board has authorized a share buyback plan on Wednesday, September 2nd that allows the company to repurchase $200.00 million in outstanding shares. This repurchase authorization allows the semiconductor company to repurchase up to 1.9% of its stock through open market purchases. Stock repurchase plans are usually an indication that the company's board of directors believes its shares are undervalued.

Insider Buying and Selling at Nova

In other Nova news, CEO Gabriel Waisman sold 1,500 shares of the firm's stock in a transaction on Tuesday, September 1st. The stock was sold at an average price of $342.27, for a total value of $513,405.00. Following the completion of the sale, the chief executive officer owned 27,214 shares of the company's stock, valued at approximately $9,314,535.78. This trade represents a 5.22% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which can be accessed through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, insider Shay Wolfing sold 3,864 shares of the company's stock in a transaction on Monday, September 21st. The stock was sold at an average price of $363.28, for a total transaction of $1,403,713.92. Following the transaction, the insider directly owned 21,409 shares in the company, valued at approximately $7,777,461.52. This trade represents a 15.29% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Corporate insiders own 1.00% of the company's stock.

Institutional Inflows and Outflows

Several institutional investors have recently added to or reduced their stakes in the company. Engineers Gate Manager LP purchased a new position in Nova in the 2nd quarter valued at about $276,000. NewEdge Advisors LLC raised its position in shares of Nova by 4.9% in the second quarter. NewEdge Advisors LLC now owns 1,383 shares of the semiconductor company's stock valued at $751,000 after buying an additional 65 shares during the last quarter. IFP Advisors Inc lifted its stake in shares of Nova by 688.9% during the second quarter. IFP Advisors Inc now owns 71 shares of the semiconductor company's stock valued at $39,000 after buying an additional 62 shares during the period. Baird Financial Group Inc. lifted its stake in shares of Nova by 175.0% during the second quarter. Baird Financial Group Inc. now owns 1,353 shares of the semiconductor company's stock valued at $735,000 after buying an additional 861 shares during the period. Finally, Amundi boosted its position in Nova by 19.6% during the second quarter. Amundi now owns 65,163 shares of the semiconductor company's stock worth $35,380,000 after acquiring an additional 10,690 shares during the last quarter. Institutional investors and hedge funds own 82.99% of the company's stock.

About Nova

Nova Ltd. NASDAQ: NVMI is an Israel-based provider of process control and metrology solutions for the semiconductor manufacturing industry. The company develops systems that help chipmakers measure and control critical wafer characteristics during production, supporting improvements in process performance, yield and device quality.

Its product portfolio includes optical and X-ray metrology systems used to measure dimensions, film thickness, material composition and other parameters across semiconductor manufacturing processes.

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