Strong Earnings Growth Lifted Novanta (NOVT) in Q4

Conestoga Capital Advisors, an asset management company, released its fourth-quarter 2025 investor letter. As many believe, US equities experienced solid returns in 2025, with double-digit gains across all major indices, yet underlying conditions revealed extreme volatility and market leadership. A copy of the letter can be downloaded here. In Q4 2025, Conestoga Capital Advisors Small Cap Strategy returned -1.89% net-of-fees, trailing the Russell 2000 Growth Index’s 1.22% return. The returns were volatile in the quarter. The “low quality” stocks rally persisted in the quarter, but at a slower pace compared to earlier quarters. Please review the Strategy’s top five holdings to gain insights into their key selections for 2025.

In its fourth-quarter 2025 investor letter, Conestoga Capital Advisors highlighted Novanta Inc. (NASDAQ:NOVT). Novanta Inc. (NASDAQ:NOVT) is a technology solutions company that offers precision medicine, precision manufacturing, medical solutions, robotics and automation solutions, and advanced surgery solutions. On February 18, 2026, Novanta Inc. (NASDAQ:NOVT) stock closed at $145.63 per share. One-month return of Novanta Inc. (NASDAQ:NOVT) was 5.29%, and its shares are up 1.98% over the past twelve months. Novanta Inc. (NASDAQ:NOVT) has a market capitalization of $5.2 billion.

Conestoga Capital Advisors stated the following regarding Novanta Inc. (NASDAQ:NOVT) in its fourth quarter 2025 investor letter:

"Novanta Inc. (NASDAQ:NOVT) provides technology solutions to medical and advanced industrial OEMs, specializing in photonics, vision, and precision motion. The company outperformed in the fourth quarter following a strong earnings report highlighted by double-digit growth in its Advanced Surgery business. Management noted that bookings grew 17% year over-year, signaling robust future demand as customer inventory levels normalize. We believe NOVT’s ability to exceed profit expectations while navigating a complex macro environment demonstrates the durability of its diversified, high-quality business model."

Novanta Inc. (NASDAQ:NOVT) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 27 hedge fund portfolios held Novanta Inc. (NASDAQ:NOVT) at the end of the third quarter, the same as in the previous quarter. While we acknowledge the potential of Novanta Inc. (NASDAQ:NOVT) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In another article, we covered Novanta Inc. (NASDAQ:NOVT) and shared Baron Small Cap Fund's views on the company last quarter. In addition, please check out our hedge fund investor letters Q4 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.