Is Nova Ltd. overvalued or undervalued?

As of 25 February 2025, Nova Ltd. has moved from an attractive to a very attractive valuation grade, indicating a significant positive shift in its perceived value. The company is currently considered undervalued based on its financial metrics. Key ratios include a P/E ratio of 30, an EV to EBITDA of 26.03, and a PEG ratio of 0.59, suggesting that the stock is priced favorably relative to its growth prospects.
In comparison to its peer, NCR Voyix Corp., which has a P/E ratio of 326.20 and an EV to EBITDA of 5.22, Nova Ltd. stands out as a more attractive investment. The company's return on capital employed (ROCE) is notably high at 33.99%, further reinforcing its strong performance relative to peers. Additionally, Nova Ltd.'s stock has outperformed the S&P 500 over various time frames, with a year-to-date return of 18.86% compared to the index's 2.44%, further supporting the conclusion that it is undervalued in the current market.