Novanta (NASDAQ:NOVT) Shares Gap Up - Time to Buy?

Key Points

• Novanta Inc. shares gapped up, opening at $120.32 following a previous close at $112.97, indicating positive market activity.
• Brokerages have downgraded Novanta’s rating; Wall Street Zen has lowered it from "buy" to "hold," while Robert W. Baird cut the price target from $139.00 to $133.00.
• Novanta reported quarterly earnings of $0.76 EPS, exceeding estimates and showing a 2.2% increase in revenue compared to the same quarter last year.

Novanta Inc. (NASDAQ:NOVT - Get Free Report) gapped up prior to trading on Thursday . The stock had previously closed at $112.97, but opened at $120.32. Novanta shares last traded at $116.31, with a volume of 34,147 shares trading hands.

Wall Street Analyst Weigh In

Several equities analysts have recently weighed in on the company. Robert W. Baird reduced their price objective on Novanta from $139.00 to $133.00 and set a "neutral" rating on the stock in a research note on Monday, August 11th. Wall Street Zen downgraded Novanta from a "buy" rating to a "hold" rating in a report on Monday, August 11th. One research analyst has rated the stock with a Hold rating, Based on data from MarketBeat, the company currently has a consensus rating of "Hold" and a consensus price target of $133.00.

Novanta Stock Performance

The company has a fifty day moving average price of $118.95 and a two-hundred day moving average price of $122.82. The firm has a market cap of $4.07 billion, a price-to-earnings ratio of 66.58 and a beta of 1.50. The company has a debt-to-equity ratio of 0.57, a current ratio of 2.54 and a quick ratio of 1.62.

Novanta (NASDAQ:NOVT - Get Free Report) last posted its quarterly earnings results on Tuesday, August 5th. The technology company reported $0.76 earnings per share for the quarter, beating the consensus estimate of $0.74 by $0.02. The firm had revenue of $241.05 million for the quarter, compared to analyst estimates of $237.97 million. Novanta had a return on equity of 14.70% and a net margin of 6.41%.Novanta's quarterly revenue was up 2.2% on a year-over-year basis. During the same period in the previous year, the firm earned $0.73 earnings per share. Novanta has set its FY 2025 guidance at 3.220-3.360 EPS. Q3 2025 guidance at 0.780-0.850 EPS. As a group, equities research analysts expect that Novanta Inc. will post 3.03 EPS for the current year.

Novanta declared that its Board of Directors has approved a share buyback plan on Thursday, September 18th that authorizes the company to buyback $200.00 million in outstanding shares. This buyback authorization authorizes the technology company to buy up to 4.9% of its shares through open market purchases. Shares buyback plans are often an indication that the company's board believes its stock is undervalued.

Institutional Trading of Novanta

A number of hedge funds and other institutional investors have recently added to or reduced their stakes in NOVT. Norges Bank acquired a new stake in Novanta in the 2nd quarter valued at approximately $29,982,000. Brown Advisory Inc. lifted its position in shares of Novanta by 8,526.6% during the 2nd quarter. Brown Advisory Inc. now owns 220,409 shares of the technology company's stock worth $28,417,000 after buying an additional 217,854 shares during the period. Conestoga Capital Advisors LLC lifted its position in shares of Novanta by 15.7% during the 2nd quarter. Conestoga Capital Advisors LLC now owns 1,579,626 shares of the technology company's stock worth $203,661,000 after buying an additional 214,374 shares during the period. Bamco Inc. NY lifted its position in shares of Novanta by 202.3% during the 2nd quarter. Bamco Inc. NY now owns 311,115 shares of the technology company's stock worth $40,112,000 after buying an additional 208,188 shares during the period. Finally, Champlain Investment Partners LLC lifted its position in shares of Novanta by 45.6% during the 1st quarter. Champlain Investment Partners LLC now owns 596,190 shares of the technology company's stock worth $76,235,000 after buying an additional 186,848 shares during the period. Institutional investors and hedge funds own 98.35% of the company's stock.

About Novanta

Novanta, Inc engages in the provision of core technology solutions to healthcare and advanced industrial original equipment manufacturers. It operates through the following segments: Photonics, Vision, and Precision Motion. The Photonics segment designs, manufactures, and markets photonics-based solutions, including laser scanning and laser beam delivery, CO2 laser, continuous wave and ultrafast laser, and optical light engine products.