Nova Measuring Instruments — NASDAQ:NVMI

About Nova Measuring Instruments

Nova Measuring Instruments Ltd. develops, produces and markets optical metrology solutions. It offers process control metrology systems and stand-alone metrology used in the manufacturing process of semiconductors.

Its products include metrology systems for thin film measurement in chemical mechanical polishing and chemical vapor deposition applications; optical and metal line thickness systems for use in post-copper chemical mechanical polishing applications and optical critical dimension systems for lithography and etch applications.

The company was founded by Giora Dishon and Moshe Finarov in May 1993 and is headquartered in Ness-Ziona, Israel.

$14.09
Entry Price
$27.12
Share Price
+92%
Trade Return
493
Trade age — days

Overview

NVMI is another company benefiting from a strong upswing in the semiconductor manufacturing business.

Given the company’s strong margins and growth, it is well positioned for strong EPS growth in the coming 12-24 months.

Growth Drivers

  • Continued semiconductor cyclical upswing
  • Margin improvements with increased revenue

Risks

  • Semiconductor is in a cyclical upswing, unknown how long it will last

Valuation Metrics

EPS of 0.35 up 49% YoY.

Forecast 12m EPS of $1.50 putting the company on a PE less than 10.

Potential for further upside from there as well.

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Stock notes

14 Feb 2017

Q4 2016 results beat guidance

EPS of $0.42 is very strong for the quarter, with a number of big contract wins.

Forecast FY EPS of $1.60 which is a PE of 10 at todays price of $16.00.

Q1 2017 outlook is EPS $0.37 - $0.45.

Note the company also has $100m in cash and no debt.

Management comments:

This year’s performance is at 45% growth in non-GAAP profits per diluted share bolsters our confident in our ability to continue our sustainable growth in 2017

And to underscore the strength of our business model I point out that while we grew revenues at 10%, we increased our non-GAAP net income by 44%, more than four times faster than we grow revenue.

We believe that the strong end to 2016 sets us on course for another growth year in 2017, bolstered by growing demand for our entire product portfolio

09 Apr 2017

Q1 2017 results beat guidance - again

Q1 2017 highlights:

  • EPS $0.50
  • Revenue up 60% YoY
  • Record quarterly bookings from 3D-NAND

Great to see strong 3D-NAND growth.

Forecast FY EPS of $2.00 putting the company on a PE of 11 at todays price of $22 (after a big earnings jump).

Q2 2017 forecast EPS of $0.38 - $0.46.

Given the company’s conservative guidance in the past, the earnings could potentially surpass $0.50.