NOVT
Novanta Inc.
$141.62
Platform & Compounding FCF
50%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 802.0% above fair value
You pay
$141.62
Bear
$11.84
Fair
$15.70
Bull
$19.54
Bear
$11.84
-91.6%
6% stage 1 growth, 12% discount
Fair
$15.70
-88.9%
11% stage 1 growth, 12% discount
Bull
$19.54
-86.2%
14% stage 1 growth, 12% discount
Key Value Driver
FCF growth rate (11% base case)
Terminal Value % of EV
35%
Implied Market Multiple
190.4x
Market is pricing in (growth)
41.9%
vs 10.7% base
Summary
Using a two-stage FCF DCF with 11% growth decelerating over 15 years, discounted at 12%, the base-case intrinsic value is $15.70 per share.
Warnings
Stock-based employee pay equals 55% of profits. This dilutes existing shareholders, so cash flow alone overstates what owners really earn.
Key Risks
- P/E alone misleads — earnings depressed by growth investment
- Cyclical or commodity businesses may be misclassified as platforms
- Terminal value dominance suggests sensitivity to long-run assumptions