Miscellaneous Electrical Machinery, Equipment & Supplies
Novanta Inc., together with its subsidiaries, designs, manufactures, markets, and sells photonics, vision, and precision motion in the United States and internationally. The company operates through three segments: Photonics, Vision, and Precision Motion. The Photonics segment offers photonics-based solutions, including laser scanning, beam delivery, CO2 laser, solid state laser, ultrafast laser, and optical light engine products serving photonics-based applications for industrial processing, metrology, medical and life science imaging, DNA sequencing, and medical laser procedures. The Vision segment provides a range of medical grade technologies, including medical insufflators, pumps, and related disposables; visualization solutions; wireless technologies, video recorders, and video integration technologies for operating room integrations; optical data collection and machine vision technologies; radio frequency identification technologies; thermal chart recorders; spectrometry technologies; and embedded touch screen solutions. The Precision Motion segment offers optical and inductive encoders, precision motors, servo drives and motion control solutions, integrated stepper motors, intelligent robotic end-of-arm technology solutions, air bearings, and air bearing spindles. The company sells its products through its direct sales force and distributors under the Cambridge Technology, Synrad, Laser Quantum, ARGES, WOM, NDS, Med X Change, Reach Technology, JADAK, ThingMagic, Photo Research, General Scanning, ATI Industrial Automation, Celera Motion, IMS, MicroE, Applimotion, Zettlex, Ingenia, and Westwind brands. The company was formerly known as GSI Group, Inc. and changed its name to Novanta Inc. in May 2016. Novanta Inc. was incorporated in 1968 and is headquartered in Bedford, Massachusetts.
Discounted Cash Flow Valuation of Novanta Inc
Growth
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Discount
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Multiple
g\r | +10% | +11% | +12% | +13% | +14% |
---|---|---|---|---|---|
0% | 10 | 9 | 8 | 8 | 7 |
+1% | 11 | 10 | 9 | 8 | 8 |
+2% | 13 | 11 | 10 | 9 | 8 |
+3% | 14 | 13 | 11 | 10 | 9 |
+4% | 17 | 14 | 12 | 11 | 10 |
Years | 0 | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | TV |
---|---|---|---|---|---|---|---|---|---|---|---|---|
FCF | $119.9M | $136.8M | $154.7M | $173.4M | $192.6M | $212M | $231.1M | $249.7M | $267.2M | $283.3M | $297.5M | $2.975B |
DCF | $119M | $117M | $114M | $110.1M | $105.4M | $99.93M | $93.87M | $87.36M | $80.53M | $73.53M | $735.3M | |
Value | $1.736B |
In the chart Earnings are multiplied by this value.
High margins render the company resilient under dire circumstances, hence able to drive competitors out or acquire them. ROE and ROA measure the average flow generated by each invested dollar. Their marginal value is a forecast of future growth, and it is considered by Buffett and Munger the most important single indicator.
Years | 12-2015 | 12-2016 | 12-2017 | 12-2018 | 12-2019 | 12-2020 | 12-2021 | 12-2022 | 12-2023 | TTM |
---|---|---|---|---|---|---|---|---|---|---|
Net Margin | 9.5% | 5.7% | 12% | 8% | 6.5% | 7.5% | 7.1% | 8.6% | 8.3% | 7.8% |
ROA | 11% | 7.7% | 10% | 9.9% | 6.4% | 6.5% | 5.2% | 8.3% | 9% | 7.8% |
ROE | 15% | 8.5% | 19% | 13% | 9.8% | 9.3% | 9.7% | 13% | 11% | 10% |
The average Net Margin over the past 5 years is +7.67%.
The trend of Net Margin over the past 5 years is +0.21%.
The average ROA over the past 5 years is +7.54%.
The trend of ROA over the past 5 years is +0.01%.
The average ROE over the past 5 years is +10.96%.
The trend of ROE over the past 5 years is -0.09%.
Being debt the number one cause of investment losses and company death, the ratio Debt/FCF is of utmost importance to guarantee safety. On the other hand the Graham’s stability measures the drawdown of earnings, hence indicating the reliability of the flow generated by the company.
Years | 12-2015 | 12-2016 | 12-2017 | 12-2018 | 12-2019 | 12-2020 | 12-2021 | 12-2022 | 12-2023 | TTM |
---|---|---|---|---|---|---|---|---|---|---|
Debt FCF | 3.44 | 1.98 | 4.32 | 2.77 | 4.20 | 1.55 | 5.82 | 6.12 | 3.54 | 4.28 |
Debt Equity | 0.39 | 0.30 | 0.75 | 0.56 | 0.53 | 0.42 | 0.83 | 0.75 | 0.53 | 0.75 |
MIN | ||||||||||
Graham Stability | - | - | 100% | 100% | 93% | 89% | 100% | 100% | 100% | 89% |
The Debt/FCF trailing twelve month is 4.28.
The trend of Debt/FCF over the past 5 years is 0.40.
Graham’s Stability measure stands at 0.89.
Growth can be dangerous when forecasting, simply projecting the current growth is in general wrong. A company passes through multiple phases, from being young and unprofitable, to the first periods of profitability and high growth, until it arrives at a period of regime with limited growth. Identifying in which phase the company is in may help forecasting.
Years | 12-2016 | 12-2018 | 12-2020 | 12-2022 | Trend |
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Revenue | 13% | 7.5% | 14% | 2.4% | 0.02% |
Net Income | 19% | 8.2% | 18% | -1.6% | -3% |
Stockholders Equity | 15% | 13% | 12% | 17% | -0.13% |
FCF | 14% | 5.9% | -8.3% | 41% | 1.4% |
The Revenue CAGR over the past 5 years is +7.49%.
The trend of Revenue growth rate over the past 5 years is +0.02%.
The Earnings CAGR over the past 5 years is +8.21%.
The trend of Earnings growth rate over the past 5 years is -3.01%.
The Equity CAGR over the past 5 years is +12.83%.
The trend of Equity growth rate over the past 5 years is -0.13%.
The FCF CAGR over the past 5 years is +5.95%.
The trend of FCF growth rate over the past 5 years is +1.41%.