It's been a pretty great week for Novanta Inc. (NASDAQ:NOVT) shareholders, with its shares surging 14% to US$156 in the week since its latest quarterly results. It looks like a credible result overall - although revenues of US$258m were what the analysts expected, Novanta surprised by delivering a (statutory) profit of US$0.51 per share, an impressive 27% 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

Taking into account the latest results, the current consensus from Novanta's three analysts is for revenues of US$1.05b in 2026. This would reflect a credible 4.8% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to jump 65% to US$2.49. In the lead-up to this report, the analysts had been modelling revenues of US$1.04b and earnings per share (EPS) of US$2.16 in 2026. There was no real change to the revenue estimates, but the analysts do seem more bullish on earnings, given the substantial gain in earnings per share expectations following these results.

The consensus price target rose 9.2% to US$172, suggesting that higher earnings estimates flow through to the stock's valuation as well. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Novanta, with the most bullish analyst valuing it at US$173 and the most bearish at US$170 per share. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that Novanta's revenue growth is expected to slow, with the forecast 6.5% annualised growth rate until the end of 2026 being well below the historical 8.5% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 13% annually. Factoring in the forecast slowdown in growth, it seems obvious that Novanta is also expected to grow slower than other industry participants.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Novanta's earnings potential next year. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Novanta's revenue is expected to perform worse than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Novanta going out to 2027, and you can see them free on our platform here.

You still need to take note of risks, for example - Novanta has 1 warning sign we think you should be aware of.

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.