Thinking about Nova and wondering if it’s still a good value or if you’ve missed the best entry? Let’s get a clear look at where shares stand today.
Nova’s had some wild swings lately, with a rapid rise of 43.1% year-to-date and a huge 62.5% run over the last year. However, it has pulled back by 12.2% in the past month.
Much of this recent momentum follows industry buzz around stronger-than-expected sector demand and regulatory updates, which have sent waves through many semiconductor stocks. News of expanded strategic partnerships and increasing investment in advanced manufacturing have further heightened market interest in Nova.
With a valuation score of 2/6 on traditional checks, there’s plenty to dig into here. We’ll break down the classic approaches to valuation next, and discuss what might be a smarter way to look at value by the end of this article.
Nova scores just 2/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.
The Discounted Cash Flow (DCF) model estimates the intrinsic value of a company by projecting its future free cash flows and discounting them back to their present value. This approach allows investors to focus on the actual cash a business is expected to generate, rather than just reported profits or revenue multiples.
For Nova, the latest reported Free Cash Flow is $228.95 million. Analysts provide direct projections for the next few years, with free cash flow expected to reach $281 million by the end of 2027. Beyond this point, projections are extrapolated and estimate Nova’s FCF could reach roughly $348 million by 2035. All cash flows are considered in US dollars.
Using the 2 Stage Free Cash Flow to Equity model, the intrinsic value for Nova comes out to $81.70 per share. This model indicates that shares are currently trading at a 255.3% premium to their DCF-derived fair value. This suggests the stock price is well above what future cash flows would justify.
While Nova’s growth outlook appears solid, the current valuation is not supported by its long-term cash flow potential, at least on this model’s assumptions.
Result: OVERVALUED
Our Discounted Cash Flow (DCF) analysis suggests Nova may be overvalued by 255.3%. Discover 885 undervalued stocks or create your own screener to find better value opportunities.
NVMI Discounted Cash Flow as at Nov 2025
The Price-to-Earnings (PE) ratio is a popular way to value profitable companies like Nova because it shows how much investors are willing to pay for each dollar of earnings. It is especially relevant for companies with consistent profits, as it ties the company’s valuation directly to its bottom line.
Story Continues
Growth expectations and perceived risk play a big role in determining what a “normal” or “fair” PE ratio should look like. Higher growth prospects or a more stable business often justify a higher PE multiple, while slower growth and greater risk would push it lower.
Nova is currently trading at a PE ratio of 35.1x. For context, the average PE for semiconductor industry peers sits at around 34.7x, while the broader peer group average is even higher at 46.9x. This places Nova’s valuation near the typical range for its sector but notably below many of its peers.
Simply Wall St’s proprietary “Fair Ratio” model goes deeper than simple peer or industry comparisons. The Fair Ratio for Nova is 26.3x, a figure designed to reflect not just sector averages but the company’s earnings growth rate, profitability, market size, and any risks on the horizon. This model delivers a fairer benchmark by customizing the comparison specifically to Nova’s prospects and business profile.
Since Nova’s actual PE ratio is considerably higher than its Fair Ratio, this suggests the stock is currently priced above what its fundamentals would warrant, even when accounting for growth and industry factors.
Result: OVERVALUED
NasdaqGS:NVMI PE Ratio as at Nov 2025
PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1411 companies where insiders are betting big on explosive growth.
Earlier we mentioned that there’s an even better way to understand valuation, so let’s introduce you to Narratives. A Narrative is your personalized story about Nova. It’s how you connect what you believe about the company and industry trends to your own forecasts for future revenue, earnings, margins, and ultimately what you think Nova is truly worth.
Unlike static models or generic ratios, Narratives allow you to link Nova’s latest news, risks, and opportunities directly to your investment thesis and a fair value calculation. This approach ensures your analysis is both forward-thinking and grounded in what matters to you. Narratives are easy to create and access through the Simply Wall St Community, where millions of investors are building and sharing their own perspectives on stocks like Nova.
They help you make better buy or sell decisions by clearly showing how your Fair Value compares to the real-time share price, and they automatically update when new information, such as earnings results or industry news, is released. For Nova, that means while one investor might see fair value at $298 per share based on bullish AI and product momentum, another could set it closer to $234, focusing more on margin risks and competitive threats. Narratives give you the power and confidence to invest smarter, your way.
Do you think there’s more to the story for Nova? Head over to our Community to see what others are saying!
NasdaqGS:NVMI Community Fair Values as at Nov 2025
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.
Companies discussed in this article include NVMI.
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