Novanta Inc is scored 38 for moat and 72 for management. The management score rests on a return on invested capital of 5.5% and a gross margin of 41.6% — figures that describe a business earning a respectable return on what it employs. Debt sits at 0.26x equity. A narrow moat alongside strong management is a combination worth understanding before the price matters at all.
The price anchors are built on deliberately conservative assumptions. Growth is modelled at 10.7% a year, below the 11.0% actually measured over the last decade — the model caps growth rather than extrapolating a good run forwards. The exit multiple assumed is 21.3x. That produces an intrinsic value of $22.69, a 10-CAP price of $29.19 and a payback time price of $37.85, with the value zone set at the highest of the three, $37.85. Today's price of $143.58 is 279% above it.
The price is above the value zone and the business scores 38 for moat and 72 for management. Neither test argues for paying up here.
| Price | $143.58 |
| Market cap | $5.1B |
| P/E ratio | 92.0x |
| Return on invested capital | 5.5% |
| Gross margin | 41.6% |
| Debt to equity | 0.26x |
| Free cash flow yield | 1.1% |
| Growth rate used | 10.7% |
| Growth rate measured | 11.0% |
| Exit multiple assumed | 21.3x |
| Company | Moat | Buy price |
| Sensata Technologies Holdplc (ST) | 32 | $41.26 |
| Plexus Corp (PLXS) | 61 | $34.60 |
| Cognex Corp (CGNX) | 40 | $15.93 |
| Ttm Technologies (TTMI) | 47 | $8.67 |
Every number above is built on assumptions that can be changed. In Moatly you can move the growth rate, the exit multiple and the margin of safety and watch every figure recalculate, so you are testing your own view of Novanta Inc rather than accepting ours.