As of June 3, 2025, Novanta Inc has a Discounted Cash Flow (DCF) derived fair value of $120.72 per share. With the current market price at $121.92, this represents a potential upside of -1.0%.
| Key Metrics | Value |
|---|---|
| DCF Fair Value (5-year) | $89.63 |
| DCF Fair Value (10-year) | $120.72 |
| Potential Upside (5-year) | -26.5% |
| Potential Upside (10-year) | -1.0% |
| Discount Rate (WACC) | 8.3% - 10.6% |
Revenue is projected to grow from $949 million in 12-2024 to $1937 million by 12-2034, representing a compound annual growth rate of approximately 7.4%.
| Fiscal Year | Revenue (USD millions) | Growth |
|---|---|---|
| 12-2024 | 949 | 8% |
| 12-2025 | 1011 | 7% |
| 12-2026 | 1090 | 8% |
| 12-2027 | 1147 | 5% |
| 12-2028 | 1254 | 9% |
| 12-2029 | 1347 | 7% |
| 12-2030 | 1465 | 9% |
| 12-2031 | 1547 | 6% |
| 12-2032 | 1690 | 9% |
| 12-2033 | 1793 | 6% |
| 12-2034 | 1937 | 8% |
Net profit margin is expected to improve from 7% in 12-2024 to 20% by 12-2034, driven by operational efficiency and economies of scale.
| Fiscal Year | Net Profit (USD millions) | Profit Margin |
|---|---|---|
| 12-2024 | 64 | 7% |
| 12-2025 | 98 | 10% |
| 12-2026 | 130 | 12% |
| 12-2027 | 162 | 14% |
| 12-2028 | 203 | 16% |
| 12-2029 | 245 | 18% |
| 12-2030 | 272 | 19% |
| 12-2031 | 293 | 19% |
| 12-2032 | 326 | 19% |
| 12-2033 | 353 | 20% |
| 12-2034 | 388 | 20% |
with a 5-year average of $17 million. Projected CapEx is expected to maintain at approximately 2% of revenue.
Depreciation is based on an average useful life of 5 years for capital assets.
| Fiscal Year | D&A (USD millions) |
|---|---|
| 12-2025 | 20 |
| 12-2026 | 21 |
| 12-2027 | 22 |
| 12-2028 | 23 |
| 12-2029 | 26 |
| 12-2030 | 28 |
Net working capital is expected to increase gradually, with projected changes affecting free cash flow.
| Components | Average Days |
|---|---|
| Days Receivables | 58 |
| Days Inventory | 113 |
| Days Payables | 51 |
| Fiscal Year | EBITDA | Tax | CapEx | Change in NWC | FCF |
|---|---|---|---|---|---|
| 9M/2025 | 124 | 11 | 17 | 25 | 71 |
| 2026 | 206 | 19 | 24 | 10 | 152 |
| 2027 | 246 | 24 | 25 | 4 | 192 |
| 2028 | 298 | 30 | 27 | 25 | 215 |
| 2029 | 351 | 37 | 30 | 15 | 270 |
| Valuation Method | Fair Price (USD) | Potential Upside |
|---|---|---|
| 5-Year DCF (Growth) | 89.63 | -26.5% |
| 10-Year DCF (Growth) | 120.72 | -1.0% |
| 5-Year DCF (EBITDA) | 99.14 | -18.7% |
| 10-Year DCF (EBITDA) | 130.57 | 7.1% |
Is Novanta Inc (NOVT) a buy or a sell? Novanta Inc is definitely a sell. Based on our DCF analysis, Novanta Inc (NOVT) appears to be fairly valued with upside potential of -1.0%. The company's strong projected growth in revenue and profitability, coupled with consistent capital expenditure, supports our positive outlook on its intrinsic value.
Key investment drivers include:
Investors should consider a hold at the current market price of $121.92.