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    Does Novanta’s (NOVT) Revenue Beat But EBITDA Miss Challenge Its Margin Expansion Narrative?

    Simply Wall St·12/25/2025 03:45:31
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    • Earlier this week, Novanta reported a 1.4% year-on-year revenue increase that came in 0.8% above analyst expectations, but EBITDA fell well short of forecasts and marked the slowest revenue growth across its electronic components peers.
    • This mix of stronger-than-expected sales and weaker profitability raises questions about the efficiency of Novanta’s growth engine at a time when peers appear to be scaling more effectively.
    • We’ll now examine how this revenue beat but EBITDA miss may influence Novanta’s investment narrative built around margin expansion and acquisition-led growth.

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    Novanta Investment Narrative Recap

    To own Novanta, you need to believe that its mix of precision medicine and industrial technologies can eventually convert modest revenue growth into stronger, more consistent profitability. The latest quarter’s revenue beat but EBITDA miss, and the 11.4% share price drop since, makes the near term margin recovery the key catalyst to watch, while highlighting the risk that integration costs, tariffs and cost inflation blunt the impact of any future acquisition-led growth.

    Against this backdrop, the recently expanded US$200 million share repurchase authorization is especially relevant, as it signals the board’s willingness to commit capital to offset dilution while earnings remain under pressure from weaker EBITDA and ongoing restructuring costs. If execution on manufacturing regionalization and segment recovery lags, though, buybacks alone may not be enough to support the longer term margin expansion story investors are hoping for.

    But beneath the headline revenue beat, investors should also be aware of the mounting risk that persistent tariffs and relocation costs could keep margins under strain...

    Read the full narrative on Novanta (it's free!)

    Novanta's narrative projects $1.1 billion revenue and $135.3 million earnings by 2028.

    Uncover how Novanta's forecasts yield a $154.00 fair value, a 26% upside to its current price.

    Exploring Other Perspectives

    NOVT 1-Year Stock Price Chart
    NOVT 1-Year Stock Price Chart

    Three fair value estimates from the Simply Wall St Community span roughly US$46 to US$154 per share, underscoring how far apart individual views can be. Against this wide spread, the recent revenue beat but EBITDA miss keeps the margin recovery risk front and center for anyone assessing how the business might perform from here.

    Explore 3 other fair value estimates on Novanta - why the stock might be worth as much as 26% more than the current price!

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    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.