Novanta Inc. Tangible Equity Units Fundamental Analysis (NASDAQ: NOVTU)
Novanta Inc. Tangible Equity Units Fundamental Analysis (NASDAQ: NOVTU)
Novanta Inc. Tangible Equity Units (NASDAQ: NOVTU) shows weak financial fundamentals with a PE ratio of 43.89, profit margin of 6.00%, and ROE of 4.90%. The company generates $0.9B in annual revenue with moderate year-over-year growth of 3.30%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 45.1/100 based on profitability, valuation, growth, and balance sheet metrics. The D grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze NOVTU's fundamental strength across five key dimensions:
Efficiency Score
WeakNOVTU struggles to generate sufficient returns from assets.
Valuation Score
ModerateNOVTU shows balanced valuation metrics.
Growth Score
WeakNOVTU faces weak or negative growth trends.
Financial Health Score
ExcellentNOVTU maintains a strong and stable balance sheet.
Profitability Score
WeakNOVTU struggles to sustain strong margins.
Key Financial Metrics
Is NOVTU Expensive or Cheap?
P/E Ratio
NOVTU trades at 43.89 times earnings. This suggests a premium valuation.
PEG Ratio
When adjusting for growth, NOVTU's PEG of 0.35 indicates potential undervaluation.
Price to Book
The market values Novanta Inc. Tangible Equity Units at 1.77 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 17.40 times EBITDA. This signals the market has high growth expectations.
How Well Does NOVTU Make Money?
Net Profit Margin
For every $100 in sales, Novanta Inc. Tangible Equity Units keeps $6.00 as profit after all expenses.
Operating Margin
Core operations generate 11.00 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $4.90 in profit for every $100 of shareholder equity.
ROA
Novanta Inc. Tangible Equity Units generates $2.89 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Novanta Inc. Tangible Equity Units produces operating cash flow of $114.45M, showing steady but balanced cash generation.
Free Cash Flow
Novanta Inc. Tangible Equity Units generates strong free cash flow of $97.60M, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $2.74 in free cash annually.
FCF Yield
NOVTU converts 4.50% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
43.89
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
0.35
vs 25 benchmark
P/B Ratio
Price to book value ratio
1.77
vs 25 benchmark
P/S Ratio
Price to sales ratio
2.41
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.18
vs 25 benchmark
Current Ratio
Current assets to current liabilities
4.57
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.05
vs 25 benchmark
ROA
Return on assets percentage
0.03
vs 25 benchmark
ROCE
Return on capital employed
0.06
vs 25 benchmark
How NOVTU Stacks Against Its Sector Peers
| Metric | NOVTU Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 43.89 | 35.70 | Worse (Expensive) |
| ROE | 4.90% | 723.00% | Weak |
| Net Margin | 6.00% | -131080.00% (disorted) | Weak |
| Debt/Equity | 0.18 | 0.22 | Neutral |
| Current Ratio | 4.57 | 5.96 | Strong Liquidity |
| ROA | 2.89% | 247.00% | Weak |
NOVTU outperforms its industry in 1 out of 6 key metrics, but lagging in P/E Ratio.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Novanta Inc. Tangible Equity Units's 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
59.47%
Industry Style: Growth, Innovation, High Beta
High GrowthEPS CAGR
16.13%
Industry Style: Growth, Innovation, High Beta
High GrowthFCF CAGR
-56.13%
Industry Style: Growth, Innovation, High Beta
Declining