In the rapidly evolving landscape of technology and life sciences, Novanta Inc. (NOVT) and Mesa Laboratories, Inc. (MLAB) stand out as key players within the Hardware, Equipment & Parts sector. Both companies focus on innovative solutions that cater to medical and industrial markets, but their approaches and product lines differ significantly. By comparing these two firms, we can uncover which one presents a more compelling investment opportunity. Join me as we delve into their strategies and market positions to determine the most interesting company for your portfolio.
Table of contents
Company Overview
Novanta Inc. Overview
Novanta Inc. is a leading provider of photonics, vision, and precision motion components, primarily serving medical and industrial markets globally. Founded in 1968 and headquartered in Bedford, Massachusetts, Novanta designs and manufactures advanced solutions, including laser technologies and motion control systems. The company focuses on innovation, providing original equipment manufacturers (OEMs) with high-quality sub-systems that enhance their product offerings. With a market cap of approximately $4.07B, Novanta has demonstrated resilience in a competitive landscape, leveraging its expertise to cater to the growing demand for precision technologies in healthcare and industrial applications.
Mesa Laboratories, Inc. Overview
Mesa Laboratories, Inc., established in 1982 and based in Lakewood, Colorado, specializes in life sciences tools and quality control products. The company serves a wide array of sectors, including healthcare, pharmaceuticals, and biotechnology, with offerings such as sterilization indicators and automated systems for protein analysis. Mesa’s commitment to quality and innovation has positioned it as a trusted partner in ensuring safety and efficacy within critical industries. With a market cap of about $445M, Mesa continues to expand its reach through its diverse product segments, enhancing its competitive edge.
Both Novanta and Mesa operate within the technology sector, focusing on hardware and equipment. While Novanta emphasizes photonics and motion control, Mesa’s strength lies in life sciences tools and quality control solutions. Each company addresses distinct market needs, showcasing their unique business models and technological capabilities.
Income Statement Comparison
The following table compares the most recent income statements of Novanta Inc. (NOVT) and Mesa Laboratories, Inc. (MLAB), highlighting key financial metrics for analysis.
| Metric | Novanta Inc. | Mesa Laboratories, Inc. |
|---|---|---|
| Revenue | 949M | 241M |
| EBITDA | 180M | 42M |
| EBIT | 124M | 18M |
| Net Income | 64M | -2M |
| EPS | 1.78 | -0.36 |
Interpretation of Income Statement
In 2024, Novanta Inc. exhibited a strong revenue growth of 8% compared to 2023, alongside a stable net income of 64M, albeit down from 73M in the prior year, reflecting tighter margins. In contrast, Mesa Laboratories faced significant challenges, reporting a net loss of 2M in 2025, following a downward trend in profitability over the last two years. The decline in revenue from 219M to 241M indicates instability, especially as operating expenses rose sharply, leading to negative earnings per share (EPS). This divergence in performance suggests that investors should approach MLAB with caution while considering NOVT as a more stable investment option.
Financial Ratios Comparison
The table below compares the most recent financial ratios for Novanta Inc. (NOVT) and Mesa Laboratories, Inc. (MLAB) to help investors evaluate each company’s performance.
| Metric | Novanta Inc. (NOVT) | Mesa Laboratories, Inc. (MLAB) |
|---|---|---|
| ROE | 8.59% | -1.24% |
| ROIC | 7.19% | -1.45% |
| P/E | 85.70 | -326.35 |
| P/B | 7.37 | 4.03 |
| Current Ratio | 2.58 | 0.63 |
| Quick Ratio | 1.72 | 0.47 |
| D/E | 0.63 | 1.14 |
| Debt-to-Assets | 33.92% | 41.88% |
| Interest Coverage | 3.51 | 1.38 |
| Asset Turnover | 0.68 | 0.56 |
| Fixed Asset Turnover | 6.08 | 7.45 |
| Payout ratio | 0% | -1.76% |
| Dividend yield | 0% | 0.54% |
Interpretation of Financial Ratios
Novanta Inc. demonstrates solid financial health with positive ROE and ROIC, indicating effective capital utilization. Its low debt ratios and high interest coverage reflect strong risk management. In contrast, Mesa Laboratories shows significant financial distress with negative profitability ratios, high debt levels, and poor liquidity, raising concerns about sustainability. Investors should be cautious with MLAB, as its current financial position poses substantial risks.
Dividend and Shareholder Returns
Novanta Inc. (NOVT) does not pay dividends, reflecting a focus on growth and reinvestment strategies, particularly during its high growth phase. The absence of dividends allows NOVT to allocate resources towards R&D and acquisitions, potentially enhancing long-term shareholder value. Meanwhile, Mesa Laboratories, Inc. (MLAB) offers a modest dividend yield of approximately 0.54% and maintains a payout ratio of about 1.76, indicating a commitment to returning capital while still investing in growth. Both companies engage in share buybacks, which can support stock price appreciation. Overall, while MLAB provides direct returns, NOVT’s strategy may align better with sustainable long-term value creation through reinvestment.
Strategic Positioning
In the competitive landscape of the Hardware, Equipment & Parts industry, Novanta Inc. (NOVT) holds a significant market share, driven by its diverse product offerings in photonics and precision motion components. With a market cap of 4.07B, it faces competitive pressure from Mesa Laboratories, Inc. (MLAB), which, despite a smaller market cap of 445M, excels in life sciences tools. Both companies must navigate technological disruptions and evolving industry standards to maintain their market positions effectively.
Stock Comparison
In this section, I will present a comparative analysis of Novanta Inc. (NOVT) and Mesa Laboratories, Inc. (MLAB), focusing on their weekly stock price movements over the past year, highlighting key price dynamics and trends.
Trend Analysis
Novanta Inc. (NOVT): Over the past year, NOVT has experienced a price change of -26.6%, indicating a bearish trend. The stock has seen notable volatility, with a standard deviation of 24.42. The highest price reached was 185.16, while the lowest was 99.96. The trend appears to be accelerating downward, suggesting a continuation of this negative momentum.
Mesa Laboratories, Inc. (MLAB): In contrast, MLAB has recorded an overall price change of -18.62%, also reflecting a bearish trend. Similar to NOVT, MLAB has shown significant volatility, with a standard deviation of 22.44. This stock reached a high of 147.79 and a low of 61.66. The trend is accelerating downward, indicating a persistent decline.
In the recent trend analysis for both companies, NOVT shows a slight decrease of -1.38%, while MLAB has demonstrated a more robust increase of 30.57%. Despite MLAB’s recent positive movement, the overall trend remains bearish for both stocks.
Analyst Opinions
Recent analyst recommendations indicate a mixed outlook for Novanta Inc. (NOVT) and Mesa Laboratories, Inc. (MLAB). Analysts have rated NOVT as a “B-” with strong scores in return on assets and equity, suggesting it is a buy for growth-oriented investors. In contrast, MLAB received a “C+” rating, primarily due to weaker performance metrics, making it a hold for cautious investors. The consensus leans towards a buy for NOVT, while MLAB is viewed with more skepticism, emphasizing the need for careful evaluation before investing.
Stock Grades
In this section, I will share the latest stock grades for Novanta Inc. (NOVT) and Mesa Laboratories, Inc. (MLAB), providing insights that can help guide your investment decisions.
Novanta Inc. Grades
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Baird | maintain | Neutral | 2025-08-11 |
| Baird | maintain | Neutral | 2025-03-03 |
| Baird | maintain | Neutral | 2024-11-06 |
| Baird | maintain | Neutral | 2024-08-07 |
| Baird | maintain | Neutral | 2023-05-11 |
| Baird | maintain | Neutral | 2023-05-10 |
| William Blair | upgrade | Outperform | 2022-05-11 |
| William Blair | upgrade | Outperform | 2022-05-10 |
| Berenberg | maintain | Hold | 2020-11-13 |
| Baird | maintain | Neutral | 2020-05-13 |
Mesa Laboratories, Inc. Grades
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Wells Fargo | upgrade | Equal Weight | 2025-08-08 |
| Wells Fargo | maintain | Underweight | 2025-05-30 |
| Evercore ISI Group | maintain | Outperform | 2024-10-01 |
| Evercore ISI Group | maintain | Outperform | 2024-08-06 |
| Evercore ISI Group | maintain | Outperform | 2024-07-02 |
| Evercore ISI Group | maintain | Outperform | 2024-04-04 |
| Evercore ISI Group | upgrade | Outperform | 2024-01-04 |
| Evercore ISI Group | downgrade | In Line | 2021-01-04 |
| Evercore ISI Group | downgrade | In Line | 2021-01-03 |
| Keybanc | maintain | Equal Weight | 2020-11-10 |
Overall, the grades for NOVT indicate a consistent rating of ‘Neutral’ from Baird, showing stability but limited upward movement. In contrast, MLAB has recently seen an upgrade to ‘Equal Weight’ from Wells Fargo, suggesting a positive shift in sentiment. This divergence highlights differing market perceptions, which investors should consider when making decisions.
Target Prices
The consensus target prices for Novanta Inc. and Mesa Laboratories, Inc. are as follows:
| Company | Target High | Target Low | Consensus |
|---|---|---|---|
| Novanta Inc. (NOVT) | 160 | 160 | 160 |
| Mesa Laboratories, Inc. (MLAB) | 120 | 120 | 120 |
Analysts expect Novanta Inc. to reach a target of 160, while Mesa Laboratories, Inc. has a target consensus of 120. With current stock prices of 112.95 for NOVT and 80.51 for MLAB, both companies appear to have upside potential according to analyst expectations.
Strengths and Weaknesses
The following table summarizes the strengths and weaknesses of Novanta Inc. (NOVT) and Mesa Laboratories, Inc. (MLAB).
| Criterion | Novanta Inc. (NOVT) | Mesa Laboratories, Inc. (MLAB) |
|---|---|---|
| Diversification | High | Moderate |
| Profitability | Moderate | Low |
| Innovation | Strong | Moderate |
| Global presence | Strong | Moderate |
| Market Share | Growing | Stable |
| Debt level | Moderate | High |
Key takeaways indicate that Novanta Inc. demonstrates stronger profitability and innovation compared to Mesa Laboratories. However, MLAB’s higher debt level poses a risk, suggesting cautious investment considerations.
Risk Analysis
The following table outlines key risks associated with Novanta Inc. (NOVT) and Mesa Laboratories, Inc. (MLAB):
| Metric | Novanta Inc. | Mesa Laboratories, Inc. |
|---|---|---|
| Market Risk | High | Moderate |
| Regulatory Risk | Moderate | High |
| Operational Risk | Moderate | High |
| Environmental Risk | Low | Moderate |
| Geopolitical Risk | Moderate | Moderate |
Both companies face significant operational and regulatory risks, especially MLAB, which has reported negative margins recently. NOVT, while maintaining a strong market position, is exposed to high volatility. Investors should proceed with caution given these factors.
Which one to choose?
After analyzing Novanta Inc. (NOVT) and Mesa Laboratories, Inc. (MLAB), it’s clear that both companies have distinct strengths and weaknesses. NOVT shows strong gross profit margins (44.4%) and a solid return on equity (8.6%), but its high price-to-earnings ratio (85.7) raises concerns about valuation. On the other hand, MLAB demonstrates robust revenue growth but struggles with profitability, evident from its negative net profit margin (-0.8%).
Analyst ratings reflect this disparity; NOVT holds a B- rating, while MLAB is rated C+. Given the current trends, NOVT appears more favorable for long-term investors seeking stability, despite its high valuation risks. Conversely, MLAB may attract investors looking for growth opportunities, but it carries significant operational challenges.
Recommendation: Investors focused on growth may prefer MLAB, while those prioritizing stability and sustainability may favor NOVT. However, both companies face risks related to market dependence and competition.
Disclaimer: This article is not financial advice. Each investor is responsible for their own investment decisions.
Go further
I encourage you to read the complete analyses of Novanta Inc. and Mesa Laboratories, Inc. to enhance your investment decisions:
