Novanta Inc. (NOVT) and Ouster, Inc. (OUST) both operate in the hardware, equipment, and parts sector, focusing on advanced technology solutions. Novanta excels in photonics and precision motion components for medical and industrial markets, while Ouster specializes in high-resolution digital lidar sensors for 3D vision applications. This comparison explores their innovation strategies and market positions to help you decide which company holds the most promise for your investment portfolio.
Table of contents
Companies Overview
I will begin the comparison between Novanta Inc. and Ouster, Inc. by providing an overview of these two companies and their main differences.
Novanta Inc. Overview
Novanta Inc. designs, manufactures, and sells photonics, vision, and precision motion components and sub-systems targeting medical and industrial markets globally. Its product range includes laser scanning, medical insufflators, optical data collection, and precision motors. Novanta operates through multiple brands and serves original equipment manufacturers with sophisticated technology solutions. The company is headquartered in Bedford, Massachusetts, and employs around 3,000 people.
Ouster, Inc. Overview
Ouster, Inc. specializes in high-resolution digital lidar sensors and software, providing 3D vision capabilities for machinery, vehicles, robots, and infrastructure. Its product portfolio features scanning and solid-state flash sensors designed to enhance spatial perception. Based in San Francisco, California, Ouster is smaller with roughly 292 employees and focuses on advancing lidar technology within the technology sector.
Key similarities and differences
Both Novanta and Ouster operate in the hardware and technology sectors, supplying components that support advanced sensing and imaging technologies. Novanta serves diverse industrial and medical markets with a broad portfolio of photonics and motion products, while Ouster concentrates on digital lidar and 3D vision sensors primarily for automation and vehicle applications. Novanta is significantly larger in market capitalization and workforce, reflecting its established multi-segment presence compared to Ouster’s specialized and newer market focus.
Income Statement Comparison
The table below presents a factual comparison of key income statement metrics for Novanta Inc. and Ouster, Inc. for the fiscal year 2024.
| Metric | Novanta Inc. (NOVT) | Ouster, Inc. (OUST) |
|---|---|---|
| Market Cap | 4.73B | 1.64B |
| Revenue | 949M | 111M |
| EBITDA | 180M | -80M |
| EBIT | 124M | -95M |
| Net Income | 64M | -97M |
| EPS | 1.78 | -2.08 |
| Fiscal Year | 2024 | 2024 |
Income Statement Interpretations
Novanta Inc.
Novanta Inc. has shown steady revenue growth, increasing from $591M in 2020 to $949M in 2024, with net income rising from $44.5M to $64.1M over the same period. Gross and EBIT margins remain favorable at around 44% and 13%, respectively. The latest year saw revenue growth slow to 7.7%, while net margin declined by over 18%, indicating some pressure on profitability despite solid top-line expansion.
Ouster, Inc.
Ouster, Inc. recorded rapid revenue growth from $19M in 2020 to $111M in 2024, a 487% increase overall. Despite this, the company remains unprofitable, with net losses narrowing from -$107M to -$97M. Gross margin improved significantly to 36%, but EBIT and net margins stayed negative at -85% and -87%. The latest year showed strong improvements in margins and earnings growth, signaling operational progress.
Which one has the stronger fundamentals?
Novanta Inc. offers stronger fundamentals with consistent profitability, stable and favorable margins, and sustained net income growth. Ouster demonstrates impressive growth in revenue and margin improvements but continues to report significant losses and negative profitability metrics. Novanta’s financial stability contrasts with Ouster’s growth-focused but loss-making profile, reflecting differing stages of business maturity.
Financial Ratios Comparison
The table below presents key financial ratios for Novanta Inc. (NOVT) and Ouster, Inc. (OUST) for the fiscal year 2024, providing a snapshot of their profitability, liquidity, leverage, and market valuation.
| Ratios | Novanta Inc. (NOVT) | Ouster, Inc. (OUST) |
|---|---|---|
| ROE | 8.6% | -53.6% |
| ROIC | 7.3% | -50.8% |
| P/E | 85.7 | -5.9 |
| P/B | 7.37 | 3.15 |
| Current Ratio | 2.58 | 2.80 |
| Quick Ratio | 1.72 | 2.59 |
| D/E (Debt-to-Equity) | 0.63 | 0.11 |
| Debt-to-Assets | 34% | 7.3% |
| Interest Coverage | 3.51 | -57.1 |
| Asset Turnover | 0.68 | 0.40 |
| Fixed Asset Turnover | 6.08 | 4.54 |
| Payout ratio | 0 | 0 |
| Dividend yield | 0% | 0% |
Interpretation of the Ratios
Novanta Inc.
Novanta Inc. shows a mixed financial profile with favorable liquidity ratios (current ratio 2.58, quick ratio 1.72) and a strong fixed asset turnover of 6.08, indicating efficient asset use. However, profitability ratios such as ROE (8.59%) and WACC (10.82%) are unfavorable, alongside high valuation multiples (PE 85.7, PB 7.37). The company does not pay dividends, reflecting a prioritization of reinvestment or growth.
Ouster, Inc.
Ouster, Inc. has several favorable solvency ratios, including a low debt-to-equity ratio of 0.11 and a strong current ratio of 2.8. Yet, it faces significant challenges with negative profitability metrics (net margin -87.35%, ROE -53.64%) and an unfavorable interest coverage ratio (-51.94). The firm also does not distribute dividends, likely due to ongoing investment in R&D and growth stage constraints.
Which one has the best ratios?
Novanta Inc. presents a slightly unfavorable overall ratio profile but benefits from better profitability and asset utilization compared to Ouster, Inc., which faces more severe negative returns and coverage issues. Liquidity is strong for both, but Ouster’s losses and interest coverage concerns weigh heavily, making Novanta’s financial ratios comparatively more stable.
Strategic Positioning
This section compares the strategic positioning of Novanta Inc. and Ouster, Inc., focusing on Market position, Key segments, and Exposure to disruption:
Novanta Inc.
- Mid-sized market cap around 4.7B USD with diverse competitors in hardware and equipment.
- Diverse segments including photonics, vision, precision motion serving medical, industrial markets.
- Exposure through photonics and precision motion technologies, vulnerable to advances in optics and laser tech.
Ouster, Inc.
- Smaller market cap near 1.6B USD with high beta, facing intense competition in lidar sensors.
- Concentrated segment focused on high-resolution digital lidar sensors and related software.
- Exposure centered on lidar sensor innovation, reliant on solid-state and scanning sensor technologies.
Novanta Inc. vs Ouster, Inc. Positioning
Novanta adopts a diversified approach across medical and industrial photonics, vision, and precision motion, spreading risk but demanding broad expertise. Ouster concentrates on lidar sensor technology, offering specialization but higher market vulnerability due to narrow focus.
Which has the best competitive advantage?
Both companies exhibit slightly unfavorable MOATs as they are shedding value, but both show growing ROIC trends. Novanta’s broader segment base may offer steadier returns, while Ouster’s rapid ROIC growth indicates potential but with greater risk.
Stock Comparison
The stock price movements of Novanta Inc. (NOVT) and Ouster, Inc. (OUST) over the past 12 months reveal contrasting trends, with NOVT showing a significant decline and OUST experiencing a substantial rise, alongside notable shifts in recent trading dynamics.
Trend Analysis
Novanta Inc. (NOVT) displayed a bearish trend over the past year with a price decrease of 17.12%, an accelerating decline, high volatility (std deviation 25.04), a high of 185.16, and a low near 99.96. Recently, NOVT showed a mild bullish reversal of 3.46% over the last two and a half months.
Ouster, Inc. (OUST) exhibited a strong bullish trend with a 407.66% price increase over the past year, though with decelerating momentum and moderate volatility (std deviation 8.61). Its recent trend reversed to bearish, dropping 18.28% within the last two and a half months.
Comparing the two, OUST delivered the highest market performance with a large annual gain, while NOVT declined. Recent short-term trends diverge, with NOVT recovering slightly and OUST facing a pullback.
Target Prices
The current analyst target consensus reveals clear expectations for these stocks.
| Company | Target High | Target Low | Consensus |
|---|---|---|---|
| Novanta Inc. | 160 | 160 | 160 |
| Ouster, Inc. | 39 | 33 | 36.67 |
Analysts expect Novanta’s stock to rise significantly from its current price of 131.37 USD, while Ouster’s consensus target suggests a moderate upside from 27.29 USD.
Analyst Opinions Comparison
This section compares analysts’ ratings and financial scores for Novanta Inc. and Ouster, Inc.:
Rating Comparison
Novanta Inc. Rating
- Rating: C+, considered Very Favorable.
- Discounted Cash Flow Score: 3, Moderate.
- ROE Score: 3, Moderate.
- ROA Score: 3, Moderate.
- Debt To Equity Score: 1, Very Unfavorable.
- Overall Score: 2, Moderate.
Ouster, Inc. Rating
- Rating: C-, considered Very Favorable.
- Discounted Cash Flow Score: 1, Very Unfavorable.
- ROE Score: 1, Very Unfavorable.
- ROA Score: 1, Very Unfavorable.
- Debt To Equity Score: 3, Moderate.
- Overall Score: 1, Very Unfavorable.
Which one is the best rated?
Novanta Inc. holds a higher overall rating (C+) and better scores in DCF, ROE, and ROA, while Ouster, Inc. scores better only in debt-to-equity. Overall, Novanta is better rated based on the provided data.
Scores Comparison
Here is a comparison of the financial health scores for Novanta Inc. and Ouster, Inc.:
Novanta Inc. Scores
- Altman Z-Score: 5.39, indicating the company is in the safe zone with low bankruptcy risk.
- Piotroski Score: 6, reflecting average financial strength and moderate investment quality.
Ouster, Inc. Scores
- Altman Z-Score: 3.66, also in the safe zone, indicating low bankruptcy risk.
- Piotroski Score: 4, showing average financial strength but lower than Novanta’s.
Which company has the best scores?
Novanta Inc. shows a higher Altman Z-Score and a better Piotroski Score compared to Ouster, Inc., indicating stronger financial health based on these metrics.
Grades Comparison
The following presents a summary of the recent grades and ratings assigned to Novanta Inc. and Ouster, Inc.:
Novanta Inc. Grades
This table shows the latest grades and recommendations from established grading firms for Novanta Inc.:
| 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 |
Novanta’s ratings have remained largely stable at a neutral or hold level, with an earlier upgrade by William Blair to outperform in 2022.
Ouster, Inc. Grades
This table presents the most recent grades and rating changes for Ouster, Inc. from reputable firms:
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Cantor Fitzgerald | Upgrade | Overweight | 2025-11-07 |
| Cantor Fitzgerald | Upgrade | Overweight | 2025-11-06 |
| WestPark Capital | Maintain | Buy | 2025-11-05 |
| Rosenblatt | Maintain | Buy | 2025-11-05 |
| WestPark Capital | Upgrade | Buy | 2025-08-13 |
| Oppenheimer | Maintain | Outperform | 2025-07-16 |
| WestPark Capital | Downgrade | Hold | 2025-06-12 |
| WestPark Capital | Upgrade | Buy | 2025-05-09 |
| Rosenblatt | Maintain | Buy | 2025-03-21 |
| Cantor Fitzgerald | Maintain | Overweight | 2025-03-21 |
Ouster’s ratings show a general trend toward positive upgrades and consistent buy or outperform recommendations.
Which company has the best grades?
Ouster, Inc. has received more frequent and recent upgrades, with a consensus rating of Buy supported by multiple firms, while Novanta Inc. holds a more cautious Hold consensus. This suggests Ouster’s stock currently commands a stronger positive outlook, potentially impacting investor confidence and portfolio positioning.
Strengths and Weaknesses
Below is a comparative table presenting the key strengths and weaknesses of Novanta Inc. (NOVT) and Ouster, Inc. (OUST) based on the most recent financial and operational data.
| Criterion | Novanta Inc. (NOVT) | Ouster, Inc. (OUST) |
|---|---|---|
| Diversification | Highly diversified across Precision Manufacturing, Robotics, Advanced Surgery, and Precision Medicine with revenues exceeding $940M in 2024. | Limited diversification; single reportable segment with $111M revenue in 2024. |
| Profitability | Moderate profitability with net margin 6.75%, ROIC 7.25% but ROIC below WACC (10.82%), indicating slight value destruction. | Negative profitability; net margin -87.35%, ROIC -50.84%, significantly below WACC (17.47%), indicating substantial value destruction. |
| Innovation | Strong emphasis on advanced technologies and medical devices, supporting a growing ROIC trend and innovation-driven segments. | Focused on LiDAR technology but still developing commercial scale; growing ROIC trend but from a low base. |
| Global presence | Established global footprint in multiple high-tech markets. | Smaller scale, likely more regional with growth potential. |
| Market Share | Solid position in precision components and medical technology markets. | Emerging player in the LiDAR market with limited market share. |
Key takeaways: Novanta offers a well-diversified and innovation-driven portfolio with improving profitability, though it currently destroys some value relative to cost of capital. Ouster is an early-stage company with significant losses but shows potential through rapid ROIC growth and a strong niche focus. Both require cautious evaluation due to value destruction risks.
Risk Analysis
Below is a summary table comparing key risk factors for Novanta Inc. (NOVT) and Ouster, Inc. (OUST) based on their latest available financial data for 2024.
| Metric | Novanta Inc. (NOVT) | Ouster, Inc. (OUST) |
|---|---|---|
| Market Risk | Beta 1.60 (moderate) | Beta 2.94 (high volatility) |
| Debt Level | Debt/Equity 0.63 (neutral) | Debt/Equity 0.11 (low) |
| Regulatory Risk | Moderate (medical/device sector) | Moderate (sensor tech, automotive) |
| Operational Risk | Medium (diversified segments) | High (early stage, smaller scale) |
| Environmental Risk | Moderate (manufacturing impact) | Moderate (tech manufacturing) |
| Geopolitical Risk | Low (US-based, global exposure) | Low (US-based, global exposure) |
Novanta exhibits moderate market risk and a balanced debt profile but faces regulatory complexities in medical and industrial markets. Ouster, with higher beta and negative profitability, shows greater operational and market risk amid its growth phase. Both require monitoring for sector-specific regulations and global supply chain impacts.
Which Stock to Choose?
Novanta Inc. (NOVT) shows gradual income growth with a favorable gross margin of 44.41% and neutral to unfavorable financial ratios, including a slightly unfavorable global ratios opinion and a moderate rating of C+. Its profitability is positive but limited, with debt levels and interest coverage at neutral levels.
Ouster, Inc. (OUST) has experienced strong revenue growth of 33.41% in one year and a bullish price trend overall, but exhibits unfavorable profitability metrics, negative returns, and an unfavorable global ratios evaluation. Its rating is C-, indicating financial challenges despite favorable liquidity and low debt.
Investors seeking stability and moderate profitability might find Novanta’s profile more consistent given its favorable income statement and moderate rating, while those focused on growth potential could interpret Ouster’s rapid revenue expansion and improving ROIC trend as signals of a high-risk, high-reward opportunity.
Disclaimer: Investment carries a risk of loss of initial capital. The past performance is not a reliable indicator of future results. Be sure to understand risks before making an investment decision.
Go Further
I encourage you to read the complete analyses of Novanta Inc. and Ouster, Inc. to enhance your investment decisions:
