NOVT
Novanta Inc.
$135.59
Platform & Compounding FCF
50%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 477.8% above fair value
You pay
$135.59
Bear
$17.53
Fair
$23.47
Bull
$29.37
Bear
$17.53
-87.1%
6% stage 1 growth, 12% discount
Fair
$23.47
-82.7%
11% stage 1 growth, 12% discount
Bull
$29.37
-78.3%
14% stage 1 growth, 12% discount
Adjust Assumptions
10.7%
12.0%
3.0%
Key Value Driver
FCF growth rate (11% base case)
Terminal Value % of EV
35%
Implied Market Multiple
118.7x
Market is pricing in (growth)
35.2%
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 $23.47 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