Nova Ltd. (NVMI) Plunges More Than Broader Markets: What You Need to Know

NOTova ltd. (NVMI) closed the last day of trading at $105.63, which is -1.75% from the previous trading session. This change lagged the S&P 500’s 1.3% loss on the day. Meanwhile, the Dow lost 0.69% and the Nasdaq, a technology-heavy index, lost 0.45%.

Prior to today’s trading, shares of the maker of surveillance systems used in chip manufacturing were down 9.22% in the past month. This was lower than the IT & Technology sector’s 8.81% loss and the S&P 500’s 5.33% loss during this period.

Wall Street will be looking for positivity from Nova Ltd. closer to the date of its next earnings report. The company is expected to post EPS of $1.05, up 50% from the prior year quarter. Meanwhile, our latest consensus estimate calls for revenue of $126 million, up 49.77% from the prior year quarter.

NVMI’s full-year Zacks consensus estimates call for earnings of $4.19 per share and revenue of $512 million. These results would represent year-over-year variations of +8.83% and +23.04%, respectively.

It’s also important to note recent changes to analyst estimates for Nova Ltd. These recent revisions tend to reflect the evolving nature of short-term trading trends. With this in mind, we can view positive estimate revisions as a sign of optimism about the company’s business outlook.

Research indicates that these revisions to estimates are directly correlated to near-term stock price dynamics. Investors can take advantage of this by using the Zacks ranking. This model accounts for these estimation changes and provides a simple and actionable scoring system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven track record of outperformance, with #1 stocks returning an average of +25% per year since 1988. Over the past few months, the Zacks Consensus EPS estimate has fallen 7.79%. Nova Ltd. is currently a Zacks Rank #4 (sell).

In terms of valuation, Nova Ltd. is currently trading at a forward P/E ratio of 25.66. This represents a premium to its industry average Forward P/E of 19.33.

Investors should also note that NVMI has a PEG ratio of 0.8 at this time. This measure is used in the same way as the famous P/E ratio, but the PEG ratio also takes into account the growth rate of the stock’s expected earnings. Electronics – Semiconductors had an average PEG ratio of 1.24 at yesterday’s closing price.

The Electronics – Semiconductors industry is part of the Computer and Technology sector. This group has a Zacks industry ranking of 55, which places it in the top 22% of over 250 industries.

The Zacks Industry Ranking assesses the strength of our individual industry groups by measuring the average Zacks Ranking of individual stocks within the groups. Our research shows that the top 50% of industries outperform the bottom half by a factor of 2 to 1.

Be sure to track all of these stock movement metrics, and more, at Zacks.com.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.