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Onto Innovation
(NYSE:ONTO)
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Rating:68Neutral
Price Target:
$217.00
▼(-25.59% Downside)
Action:Downgraded
Date:10/23/26
Strong underlying fundamentals and a very solid balance sheet, plus a highly upbeat earnings outlook with raised guidance and record backlog, support the score. These positives are meaningfully offset by very weak price momentum/technical trend and a rich valuation (P/E ~82.9) with no dividend yield provided.
Positive Factors
Backlog Visibility
A backlog above $1.1 billion provides meaningful revenue visibility beyond the current quarter and indicates customer commitment to Onto’s equipment. The portion extending into 2027 supports planning confidence and helps reduce reliance on purely short-cycle orders.
Negative Factors
Margin Compression
Although gross margins remain solid, lower net profitability than during prior peak years shows that revenue growth has not fully translated into earnings power. Continued margin compression could constrain reinvestment capacity and make results more sensitive to execution or cost pressures.
Read all positive and negative factors
Positive Factors
Negative Factors
Backlog Visibility
A backlog above $1.1 billion provides meaningful revenue visibility beyond the current quarter and indicates customer commitment to Onto’s equipment. The portion extending into 2027 supports planning confidence and helps reduce reliance on purely short-cycle orders.
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
$9.75B
Dividend YieldN/A
Average Volume (3M)966.09K
Price to Earnings (P/E)74.1
Beta (1Y)2.29
Revenue Growth8.08%
EPS Growth-33.87%
CountryUS
Employees1,867
SectorTechnology
Sector Strength88
IndustrySemiconductors
Share Statistics
EPS (TTM)2.68
Shares Outstanding49,074,245
10 Day Avg. Volume1,210,011
30 Day Avg. Volume966,093
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 Cap1.89
Enterprise Value/Revenue16.42
Enterprise Value/Gross Profit32.61
Enterprise Value/Ebitda74.07
Forecast
1Y Price Target
$386.00Price Target Upside32.36% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering10
EPS Forecast (FY)8.12
Revenue Forecast (FY)$1.44B
Onto Innovation Business Overview & Revenue Model
Company Description
Onto Innovation Inc. is a global leader in designing, manufacturing, and supporting cutting-edge process control solutions. The company's diverse portfolio encompasses tools for macro defect inspection, 2D/3D optical metrology, and lithography sys...
How the Company Makes Money
Onto Innovation makes money primarily by selling semiconductor process-control capital equipment and related offerings to manufacturers and packaging providers. The core revenue stream is product revenue from inspection and metrology systems used ...
Onto Innovation Earnings Call Summary
Earnings Call Date:Aug 06, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 09, 2026
Earnings Call Sentiment Positive
The call was strongly positive, marked by record second-quarter financial results, substantial revenue and margin outperformance, a backlog exceeding $1.1 billion, raised second-half guidance, and strong demand across advanced packaging, HBM, AI-related applications, and advanced nodes. The company also reported robust liquidity, improving operating leverage, and additional growth opportunities in silicon photonics, panel-level packaging, and X-ray process control. The main challenges were material, fuel, and freight cost headwinds, sequential weakness in other packaging and specialty device revenue, ongoing supply-chain concerns, and qualification timelines that defer some product contributions to 2027.Positive Updates
Record Second-Quarter Results
Revenue, gross margin, operating margin, and earnings per share all exceeded the high end of guidance. Revenue was $343 million, up 18% sequentially and 35% year-over-year, while earnings were $1.93 per share, $0.20 above the high end of the previous guidance range.
Negative Updates
Certain Cost Headwinds
The company remains cognizant of continued headwinds around certain material input costs, fuel surcharges, and freight expense.
Read all updates
Q2-2026 Updates
Positive
Negative
Record Second-Quarter Results
Revenue, gross margin, operating margin, and earnings per share all exceeded the high end of guidance. Revenue was $343 million, up 18% sequentially and 35% year-over-year, while earnings were $1.93 per share, $0.20 above the high end of the previous guidance range.
Read all positive updates
Company Guidance
Management raised its second half revenue growth outlook to 25% or more over the first half, with Q3 revenue expected in the range of $380 million-$400 million, an additional uptick in Q4, and Q4 revenue expected to be higher than Q3; CFO guidance calls for revenue to grow more than 25% in the second half of 2026, gross margin expansion of an incremental 50 basis points per quarter in Q3 and in Q4, operating margins of 32% in Q3 and 33% or higher exiting the year, and Q3 earnings per share of approximately $2.28, assuming a non-GAAP tax rate of 15% and slightly more than 50 million shares outstanding. The company expects advanced packaging growth of approximately 80%, or at least 80% this year, advanced nodes revenue to grow more than 35% in 2026, panel-level packaging revenue to more than double year-over-year with further growth in 2027, and silicon photonics served addressable market to grow to over $500 million by 2030.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 | 248.31M | 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
Negative
291.62
Price Trends
275.21
Negative
287.23
Negative
260.52
Negative
Market Momentum
-21.19
Positive
26.49
Positive
5.23
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ONTO, the sentiment is Negative. The current price of 291.62 is above the 20-day moving average (MA) of 268.57, above the 50-day MA of 275.21, and above the 200-day MA of 260.52, indicating a bearish trend. The MACD of -21.19 indicates Positive momentum. The RSI at 26.49 is Positive, neither overbought nor oversold. The STOCH value of 5.23 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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 |
|---|---|---|---|---|---|---|---|
69 Neutral | $190.02B | 39.52 | 85.38% | 0.58% | 11.72% | 20.58% | |
68 Neutral | $9.75B | 74.13 | 6.50% | ― | 8.08% | -33.87% | |
66 Neutral | $5.65B | 151.45 | 5.82% | 1.62% | 7.94% | -72.56% | |
66 Neutral | $9.90B | 35.61 | 20.25% | ― | 16.16% | 8.14% | |
65 Neutral | $2.57B | 109.79 | 2.62% | ― | -2.52% | -64.30% | |
63 Neutral | $2.27B | -57.71 | -4.91% | 1.11% | 32.66% | 55.60% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% |
* Technology Sector Average
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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 ...
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.