Novanta (NASDAQ:NOVT) Shares Up 4.5% - Still a Buy?

Key Points

• Novanta Inc. shares increased by 4.5% to $118.04, despite a 73% drop in trading volume compared to its average session.
• Several analysts downgraded Novanta's stock, resulting in a consensus rating of "Hold" and a target price adjusted to $133.00.
• Novanta announced a share buyback program authorizing up to $200 million to repurchase approximately 4.9% of its shares, signifying potential undervaluation of the stock.

Novanta Inc. (NASDAQ:NOVT - Get Free Report) traded up 4.5% during trading on Wednesday . The company traded as high as $117.20 and last traded at $118.04. 81,012 shares changed hands during mid-day trading, a decline of 73% from the average session volume of 305,406 shares. The stock had previously closed at $113.00.

Wall Street Analysts Forecast Growth

A number of research analysts have commented on the company. Wall Street Zen downgraded Novanta from a "buy" rating to a "hold" rating in a research note on Monday, August 11th. Robert W. Baird lowered their target price on Novanta from $139.00 to $133.00 and set a "neutral" rating on the stock in a research note on Monday, August 11th. Zacks Research upgraded Novanta from a "strong sell" rating to a "hold" rating in a research note on Monday, October 6th. Finally, Weiss Ratings reiterated a "hold (c-)" rating on shares of Novanta in a research note on Wednesday, October 8th. Three investment analysts have rated the stock with a Hold rating, Based on data from MarketBeat, Novanta presently has a consensus rating of "Hold" and an average target price of $133.00.

Novanta Price Performance

The company has a debt-to-equity ratio of 0.57, a quick ratio of 1.62 and a current ratio of 2.54. The company has a market cap of $4.17 billion, a P/E ratio of 68.24 and a beta of 1.49. The stock has a 50-day simple moving average of $111.34 and a 200 day simple moving average of $118.65.

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

Novanta announced that its board has authorized a share buyback plan on Thursday, September 18th that allows the company to buyback $200.00 million in shares. This buyback authorization allows the technology company to repurchase up to 4.9% of its shares through open market purchases. Shares buyback plans are often a sign that the company's board of directors believes its stock is undervalued.

Institutional Investors Weigh In On Novanta

Hedge funds and other institutional investors have recently made changes to their positions in the company. SVB Wealth LLC acquired a new stake in shares of Novanta in the 1st quarter valued at $48,000. GAMMA Investing LLC lifted its holdings in Novanta by 146.0% during the first quarter. GAMMA Investing LLC now owns 401 shares of the technology company's stock worth $51,000 after acquiring an additional 238 shares in the last quarter. CWM LLC lifted its holdings in Novanta by 329.8% during the first quarter. CWM LLC now owns 404 shares of the technology company's stock worth $52,000 after acquiring an additional 310 shares in the last quarter. BNP PARIBAS ASSET MANAGEMENT Holding S.A. bought a new position in Novanta during the second quarter worth about $52,000. Finally, Signaturefd LLC lifted its holdings in Novanta by 80.0% during the first quarter. Signaturefd LLC now owns 414 shares of the technology company's stock worth $53,000 after acquiring an additional 184 shares in the last quarter. 98.35% of the stock is owned by institutional investors and hedge funds.

Novanta Company Profile

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.

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