What Happened:
Shares of semiconductor quality control company Nova (NASDAQ: NVMI) jumped 7.5% in the afternnon session after the company reported fourth-quarter results that blew past analysts' revenue and EPS expectations, driven by outperformance in both its segments (Products and Services). In addition, its inventory levels shrunk, and its gross margin improved year on year. Looking ahead, Nova's revenue and EPS guidance for Q1 2024 beat expectations. Overall, this was a fantastic quarter that should have shareholders cheering.
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What is the market telling us:
Nova's shares are somewhat volatile and over the last year have had 4 moves greater than 5%. In context of that, today's move is indicating the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 9 months ago, when the stock gained 5.3% on the news that the company reported first-quarter results that exceeded analysts' expectations for revenue, gross margin, and earnings per share. Revenue guidance for the next quarter came in below Consensus despite the record bookings recorded in the materials metrology division. In addition, EPS guidance was in line. Overall, it was a mixed quarter highlighting weaknesses similar to those observed by peers that had reported earnings, with management mentioning a "challenging industry environment."
Nova is up 23.5% since the beginning of the year. Investors who bought $1,000 worth of Nova's shares 5 years ago would now be looking at an investment worth $6,721.
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