Yahoo Finance Novanta Inc. Beat Analyst Estimates: See What The Consensus Is Forecasting For This Year
Novanta Inc. (NASDAQ:NOVT) came out with its first-quarter results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. It looks like a credible result overall - although revenues of US$231m were what the analysts expected, Novanta surprised by delivering a (statutory) profit of US$0.41 per share, an impressive 28% above what was forecast. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Check out our latest analysis for Novanta
Following the latest results, Novanta's three analysts are now forecasting revenues of US$980.6m in 2024. This would be a meaningful 9.8% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to rise 9.0% to US$2.11. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$985.6m and earnings per share (EPS) of US$2.24 in 2024. The analysts seem to have become a little more negative on the business after the latest results, given the small dip in their earnings per share numbers for next year.
The consensus price target held steady at US$179, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Novanta analyst has a price target of US$187 per share, while the most pessimistic values it at US$170. 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.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's clear from the latest estimates that Novanta's rate of growth is expected to accelerate meaningfully, with the forecast 13% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 9.8% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 6.2% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Novanta is expected to grow much faster than its industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Novanta. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. The consensus price target held steady at US$179, with the latest estimates not enough to have an impact on their price targets.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Novanta going out to 2025, and you can see them free on our platform here..
Before you take the next step you should know about the 1 warning sign for Novanta that we have uncovered.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
