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Onto Innovation
(NYSE:ONTO)
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Rating:80Outperform
Price Target:
$381.00
▲(39.75% Upside)
Action:Reiterated
Date:08/10/26
The score is driven primarily by strong financial resilience (near-zero debt and solid free cash flow) and a very constructive earnings call with upbeat growth and margin guidance. Technicals remain supportive with the stock above major moving averages, though negative MACD signals softer near-term momentum. Valuation is the key constraint due to the very high P/E and lack of dividend yield support.
Positive Factors
Balance Sheet Strength
Effectively negligible debt gives Onto substantial financial flexibility to fund research, product expansion and strategic investments. The strong equity base and limited interest burden also improve resilience through semiconductor equipment cycles.
Negative Factors
Profitability Compression
Although gross margins remain solid, lower operating and net margins indicate weaker incremental profitability than during prior peak periods. Sustained margin compression could limit earnings conversion from revenue growth and reduce flexibility for reinvestment.
Read all positive and negative factors
Positive Factors
Negative Factors
Balance Sheet Strength
Effectively negligible debt gives Onto substantial financial flexibility to fund research, product expansion and strategic investments. The strong equity base and limited interest burden also improve resilience through semiconductor equipment cycles.
Read all positive factors
Onto Innovation Key Performance Indicators (KPIs)
Any
Revenue by Segment
Reveals how different parts of the business contribute to overall sales, highlighting key areas of strength and potential vulnerabilities in the company's operations.
Reveals how different parts of the business contribute to overall sales, highlighting key areas of strength and potential vulnerabilities in the company's operations.
Data provided by:
The Fly
The FlyOnto Innovation (ONTO) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$15.48B
Dividend YieldN/A
Average Volume (3M)1.30M
Price to Earnings (P/E)111.3
Beta (1Y)2.27
Revenue Growth8.08%
EPS Growth-33.87%
CountryUS
Employees1,615
SectorTechnology
Sector Strength88
IndustrySemiconductors
Share Statistics
EPS (TTM)2.69
Shares Outstanding49,074,245
10 Day Avg. Volume963,708
30 Day Avg. Volume1,296,230
Financial Highlights & Ratios
PEG Ratio-1.86
Price to Book (P/B)3.88
Price to Sales (P/S)8.11
P/FCF Ratio27.18
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$385.33Price Target Upside41.34% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering12
EPS Forecast (FY)8.09
Revenue Forecast (FY)$1.43B
Onto Innovation Business Overview & Revenue Model
Company Description
Onto Innovation Inc. (ONTO) is a semiconductor process control and inspection company that develops and sells metrology and inspection systems, along with related software and services, used to monitor, measure, and improve manufacturing processes...
How the Company Makes Money
Onto Innovation primarily makes money by selling capital equipment used for semiconductor metrology and inspection. Revenue is largely generated from (1) product sales of its process control tools (inspection and metrology systems deployed in semi...
Onto Innovation Earnings Call Summary
Earnings Call Date:May 05, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Oct 29, 2026
Earnings Call Sentiment Positive
The call conveyed strong execution and robust demand drivers: Q1 results beat guidance, margins expanded, EPS improved, and management provided ambitious 2026 and Q2 guidance. Strategic moves (27% Rigaku stake) and product qualifications (Dragonfly G5, Atlas G6, TSV win, JetStep) position the company for sizable growth, particularly in advanced packaging (>50% growth) and advanced nodes (~25%). Offsetting factors include rising input and logistics costs, modest near-term margin impact from new product volume, supply-chain/lead-time pressure, and accounting/ cash-use considerations related to the Rigaku investment. Overall, the positive operational momentum and sizable growth catalysts appear to outweigh the near-term headwinds.Positive Updates
Revenue Beat and Upside Guidance
Q1 revenue of $292 million, up nearly 10% sequentially, exceeded the high end of company guidance. Q2 revenue guidance of $320–$330 million (midpoint cited as +20% YoY by CEO and +28% YoY by CFO in the call). Company expects 2026 revenue growth of more than 30% and total 2026 revenue greater than $1.3 billion.
Negative Updates
Rising Input Costs and Margin Headwinds
Management flagged increasing headwinds from certain material input costs (notably memory-related inputs), higher fuel and shipping charges, and the need to invest in R&D and services to support the ramp, which could pressure margins despite guidance to expand margins.
Read all updates
Q1-2026 Updates
Positive
Negative
Revenue Beat and Upside Guidance
Q1 revenue of $292 million, up nearly 10% sequentially, exceeded the high end of company guidance. Q2 revenue guidance of $320–$330 million (midpoint cited as +20% YoY by CEO and +28% YoY by CFO in the call). Company expects 2026 revenue growth of more than 30% and total 2026 revenue greater than $1.3 billion.
Read all positive updates
Company Guidance
Management guided Q2 revenue of $320–$330 million (midpoint noted as materially above prior analyst expectations), Q2 gross margin of 56.0%–56.5%, operating expenses of $90–$92 million, operating margin of 28.0%–28.6% and non‑GAAP EPS of about $1.69 at the midpoint (assuming ~15% tax rate and just over 50 million shares outstanding). They reaffirmed 2026 revenue above $1.3 billion (total 2026 growth >30%), expect advanced packaging revenue to grow >50% and advanced nodes to grow ~25% in 2026, foresee second‑half revenue accelerating at least 15% over the first half (with >15% sequential growth in H2), plan gross‑margin expansion (Q3 up at least 50 bps per quarter) and to exit Q4 with operating margin >30%; for context, Q1 results were $292M revenue, 55.7% gross margin, 26.7% operating margin and $1.42 EPS.Onto Innovation Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
92
Very Positive
Cash Flow
85
Very Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.12B | 1.01B | 987.32M | 815.87M | 1.01B | 788.90M |
| Gross Profit | 564.06M | 499.77M | 515.31M | 420.25M | 539.22M | 429.09M |
| EBITDA | 264.68M | 223.34M | 282.76M | 199.79M | 306.25M | 221.48M |
| Net Income | 132.60M | 136.76M | 201.67M | 121.16M | 223.33M | 142.35M |
Balance Sheet | ||||||
| Total Assets | 3.70B | 2.37B | 2.12B | 1.91B | 1.79B | 1.65B |
| Cash, Cash Equivalents and Short-Term Investments | 1.88B | 639.62M | 852.33M | 697.81M | 547.78M | 511.34M |
| Total Debt | 1.47B | 17.48M | 15.16M | 19.52M | 22.02M | 17.72M |
| Total Liabilities | 1.78B | 267.09M | 191.21M | 173.18M | 198.44M | 223.76M |
| Stockholders Equity | 1.92B | 2.10B | 1.93B | 1.74B | 1.60B | 1.43B |
Cash Flow | ||||||
| Free Cash Flow | 252.47M | 299.80M | 213.77M | 149.40M | 118.30M | 163.24M |
| Operating Cash Flow | 266.22M | 328.31M | 245.68M | 171.97M | 136.70M | 175.28M |
| Investing Cash Flow | -399.51M | -121.57M | -226.55M | -103.39M | -55.69M | -141.79M |
| Financing Cash Flow | 1.17B | -75.15M | -35.67M | -9.47M | -68.35M | 2.67M |
Onto Innovation Technical Analysis
Neutral
272.62
Price Trends
303.67
Negative
284.68
Positive
232.42
Positive
Market Momentum
9.23
Negative
49.65
Neutral
56.54
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ONTO, the sentiment is Neutral. The current price of 272.62 is below the 20-day moving average (MA) of 289.44, below the 50-day MA of 303.67, and above the 200-day MA of 232.42, indicating a neutral trend. The MACD of 9.23 indicates Negative momentum. The RSI at 49.65 is Neutral, neither overbought nor oversold. The STOCH value of 56.54 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for ONTO.
Onto Innovation Risk Analysis
Onto Innovation disclosed 44 risk factors in its most recent earnings report. Onto Innovation reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Onto Innovation Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $15.48B | 111.34 | 6.50% | ― | 8.08% | -33.87% | |
69 Neutral | $12.60B | -336.45 | -5.93% | ― | 14.22% | 81.01% | |
68 Neutral | $12.43B | 43.69 | 20.25% | ― | 16.16% | 8.14% | |
66 Neutral | $7.27B | 188.32 | 5.82% | ― | 7.94% | -72.56% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
61 Neutral | $13.63B | 22.72 | 12.37% | 0.51% | 17.93% | 82.27% | |
60 Neutral | $7.34B | 473.46 | 1.48% | ― | 24.22% | ― |
* Technology Sector Average
ONTO
Onto Innovation
299.50
194.04
183.99%
AMKR
Amkor
50.89
27.88
121.15%
CAMT
Camtek
150.66
68.92
84.31%
NVMI
Nova
385.33
138.11
55.87%
SMTC
Semtech
125.36
75.97
153.82%
ALGM
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38.35
7.47
24.19%
Onto Innovation Corporate Events
Business Operations and StrategyM&A Transactions
Onto Innovation Finalizes Strategic Stake in Rigaku Holdings
Positive
Aug 10, 2026
On August 10, 2026, Onto Innovation completed the previously announced acquisition of a 27% minority equity stake in Japan-based Rigaku Holdings Corporation from Atom Investment, an affiliate of Carlyle, for approximately US$720 million. The deal ...
Business Operations and StrategyStock BuybackPrivate Placements and Financing
Onto Innovation Issues $1.5 Billion Convertible Notes
Positive
May 21, 2026
On May 21, 2026, Onto Innovation issued $1.5 billion of 0.00% Convertible Senior Notes due 2031, including the full $200 million overallotment, in a private Rule 144A offering to qualified institutional buyers. The notes are senior unsecured oblig...
Executive/Board ChangesShareholder Meetings
Onto Innovation Shareholders Back Board, Pay and Auditor
Positive
May 20, 2026
Onto Innovation held its 2026 Annual Meeting on May 20, 2026, at its Wilmington, Massachusetts headquarters, where shareholders elected seven directors, including Stephen D. Kelley and Michael P. Plisinski, to serve until the next annual meeting. ...
Business Operations and StrategyStock BuybackM&A TransactionsPrivate Placements and Financing
Onto Innovation Announces $1.1 Billion Convertible Notes Offering
Positive
May 18, 2026
On May 18, 2026, Onto Innovation Inc. announced plans for a private offering of $1.1 billion in convertible senior notes due June 1, 2031, targeting qualified institutional buyers under Rule 144A, with an option for initial purchasers to buy an ad...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.