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It's been a good week for Novanta Inc. (NASDAQ:NOVT) shareholders, because the company has just released its latest third-quarter results, and the shares gained 6.6% to US$182. Revenues of US$244m were in line with forecasts, although statutory earnings per share (EPS) came in below expectations at US$0.53, missing estimates by 3.6%. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
View our latest analysis for Novanta
Taking into account the latest results, the consensus forecast from Novanta's three analysts is for revenues of US$1.04b in 2025. This reflects a solid 13% improvement in revenue compared to the last 12 months. Per-share earnings are expected to surge 59% to US$2.66. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$1.08b and earnings per share (EPS) of US$2.89 in 2025. The analysts are less bullish than they were before these results, given the reduced revenue forecasts and the minor downgrade to earnings per share expectations.
Despite the cuts to forecast earnings, there was no real change to the US$178 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Novanta at US$187 per share, while the most bearish prices it at US$169. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Novanta is an easy business to forecast or the the analysts are all using similar assumptions.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. The period to the end of 2025 brings more of the same, according to the analysts, with revenue forecast to display 10% growth on an annualised basis. That is in line with its 10% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 7.3% annually. So although Novanta is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider industry.