Semiconductor quality control company Nova (NASDAQ:NVMI) will be announcing earnings results tomorrow before the bell. Here’s what investors should know.
Nova beat analysts’ revenue expectations by 5.9% last quarter, reporting revenues of $156.9 million, up 27.8% year on year. It was a stunning quarter for the company, with optimistic earnings guidance for the next quarter and an impressive beat of analysts’ EBITDA estimates.
Is Nova a buy or sell going into earnings? Read our full analysis here, it’s free.
This quarter, analysts are expecting Nova’s revenue to grow 33.4% year on year to $171.8 million, a reversal from the 10.5% decrease it recorded in the same quarter last year. Adjusted earnings are expected to come in at $1.68 per share.
The majority of analysts covering the company have reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. Nova has a history of exceeding Wall Street’s expectations, beating revenue estimates every single time over the past two years by 3.2% on average.
Looking at Nova’s peers in the semiconductor manufacturing segment, some have already reported their Q3 results, giving us a hint as to what we can expect. Teradyne delivered year-on-year revenue growth of 4.8%, beating analysts’ expectations by 3%, and Lam Research reported revenues up 19.7%, topping estimates by 2.7%. Teradyne traded down 11.1% following the results while Lam Research was up 4.8%.
Read our full analysis of Teradyne’s results here and Lam Research’s results here.
Stocks, especially growth stocks where cash flows further in the future are more important to the story, had a good end of 2023. But 2024 has seen more volatile stock performance thanks to mixed inflation data, and while some of the semiconductor manufacturing stocks have fared somewhat better, they have not been spared, with share prices down 4.4% on average over the last month. Nova is down 8.8% during the same time and is heading into earnings with an average analyst price target of $239.80 (compared to the current share price of $190.35).
Today’s young investors won’t have read the timeless lessons in Gorilla Game: Picking Winners In High Technology because it was written more than 20 years ago when Microsoft and Apple were first establishing their supremacy. But if we apply the same principles, then enterprise software stocks leveraging their own generative AI capabilities may well be the Gorillas of the future. So, in that spirit, we are excited to present our Special Free Report on a profitable, fast-growing enterprise software stock that is already riding the automation wave and looking to catch the generative AI next.
