Nova Nova Measuring Instruments Ltd. -2.16%  , the Israeli tech firm specializing in advanced measurement systems for the semiconductor industry, has cemented itself as one of the best-performing investments in both the Israeli and international markets. Currently trading at $272 per share, Nova's stock has skyrocketed 605% over the past five years and 156% over the last decade. In the past year alone, the stock surged 68%, reflecting a market capitalization of $7.9 billion and trading at a P/E ratio of 47.

The company's success isn't just reflected in its stock price—it’s also seen in how it compensates its employees. According to company data, at the beginning of 2024, employees held 587,669 unvested RSUs at an average grant price of $98.39. Over the course of the year, an additional 136,736 RSUs were awarded at an average price of $196.83. With the stock now at $272, employees are sitting on significant paper gains.

A quick calculation shows that by year-end, employees held 496,536 unvested RSUs. At the current stock price, this amounts to approximately $135 million in equity value, with an average grant price of $127.39. This translates to a theoretical profit of roughly $72 million across all employees, or about $60,000 per employee on average (based on an estimated workforce of 1,200).

Nova is also generous with stock options. The company has issued 37,830 options at an average exercise price of $34.18. With the stock now at $272, these options have an embedded gain of approximately $9 million, adding another $7,500 per employee on average. In total, between RSUs and stock options, the average employee is sitting on about $67,500 in equity-based compensation.

• "The More Complex Chip Manufacturing Becomes, the More Nova Benefits"
• "Market Concerns Are More Relevant to Nvidia, Less to Nova and Camtek"
• המלצת המערכת: כל הכותרות 24/7

Institutional Investors Reap the Benefits

Nova’s meteoric rise has also benefited major Israeli institutional investors. Menora Mivtachim holds a 7.25% stake (2.12 million shares), Migdal Insurance owns 7.81% (2.29 million shares), and Harel Investments controls 6.15% (1.8 million shares). Combined, their holdings exceed $1.7 billion. The largest shareholder remains FMR LLC with a 9.07% stake (2.66 million shares), followed by Wasatch Advisors with 8.24% (2.41 million shares).

Nova has perfectly capitalized on the AI and advanced computing boom. As the world increasingly demands higher precision in semiconductor manufacturing, Nova's cutting-edge measurement systems have become indispensable. The market has responded accordingly, driving the stock to new heights.

Record-Breaking Q4 Results

Nova reported stellar results for Q4 2024, delivering sharp revenue and profit growth. Under CEO Gabi Wiseman, the company posted record quarterly revenue of $195 million, a 45% year-over-year increase and a 9% sequential rise. The results exceeded Nova’s own guidance by $4 million and analyst estimates by $8 million.

GAAP net income reached $50.5 million, or $1.58 per share, marking a 32% increase year-over-year. On a Non-GAAP basis, excluding stock-based compensation and amortization, net income stood at $62 million, or $1.94 per share—$0.12 ahead of analyst expectations.

Operating profitability continues to improve, with operating margin reaching 33% in Q4, up from 32% in Q3 and 30% a year ago. Gross profit (Non-GAAP) climbed 47% year-over-year to $113 million, maintaining a robust 58% gross margin.

Nova attributes its strong performance to the success of its latest products, particularly the Metrion and Veraflex systems for material metrology, along with significant advances in dimensional metrology for advanced packaging. The company is rapidly expanding its customer base and increasing market share in new segments.

Bullish Outlook for 2025

Nova’s outlook for Q1 2025 suggests continued strong growth, with revenue expected in the range of $205–$215 million and Non-GAAP EPS of $2.00–$2.16. These projections significantly outpace analyst expectations, with a 9% revenue beat and a 12% EPS upside.

CEO Gabi Wiseman emphasized that Nova is outpacing the broader semiconductor market, securing major new contracts and expanding into new business areas. These results are particularly impressive given the challenges and uncertainties facing the global semiconductor industry.

Nova’s stock has surged 38% year-to-date and 68% over the past 12 months, now valuing the company at $7.9 billion.