Nova Measuring Instruments
is a designer, developer and producer of integrated process control metrology systems and sells metrology used in the manufacture of semiconductors worldwide, either directly or through process equipment manufacturers. The company's revenues grew at a CAGR of 12.4% during the past five years.
During the fiscal year ended 2010, total revenue more than doubled to $86.6 million from $39.3 million a year earlier, driven by increased capital spending across the industry, market share gains and higher utilization rates at customers' manufacturing sites. Gross margin expanded 1,000 basis points to 54.7%, while operating margin increased 1,890 basis points to 25.2%. As a result, net income rose to $22.2 million or 86 cents per share from $2.6 million or 13 cents per share in 2009.
On the balance sheet side, cash and cash equivalents soared to $25.4 million from $9.9 million, current ratio stood at 4.1 and the company remains debt-free. Nova recently opened a new facility in South Korea to provide sales support to local customers support as well as development of tailored application solutions, thereby expanding its presence in the country.
The company received three orders worth $12 million for its integrated and standalone metrology tools, originating mostly from China-based customers. Furthermore, the company expects multi-million dollar orders from incumbents and other customers, leading to record quarterly bookings in the first quarter of 2011.
Based on the company's guidance for first quarter of 2011, revenue is expected to range between $27.5 million and $29.5 million, representing 72%-84% year-over-year increase. Net margin is expected to be 25%-28%.
All the four analysts covering the stock recommend a buy. There are no sell ratings on the stock. On average, analysts expect an upside of 44.3% to $13.33 in value from current levels. The stock has already gained 60% during the past one year, while it trades at a P/E of 10.7