Onto Innovation (ONTO) AI Stock Analysis

• Market Cap: $6.15B
• Dividend Yield: N/A
• Average Volume (3M): 1.59M
• Price to Earnings (P/E): 32.7
• Beta (1Y): 2.36
• Revenue Growth: 15.51%
• EPS Growth: 20.31%
• Country: US
• Employees: 1,551
• Sector: Technology
• Sector Strength: 88
• Industry: Semiconductors
• EPS (TTM): 1.25
• Shares Outstanding: 49,003,570
• 10 Day Avg. Volume: 1,035,788
• 30 Day Avg. Volume: 1,592,995
• PEG Ratio: 0.64
• Price to Book (P/B): 4.37
• Price to Sales (P/S): 8.53
• P/FCF Ratio: 39.39
• Enterprise Value/Market Cap: 0.64
• Enterprise Value/Revenue: 3.83
• Enterprise Value/Gross Profit: 7.42
• Enterprise Value/Ebitda: 15.65
• 1Y Price Target: $155.00
• Price Target Upside: 15.09% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 7

• Rating: 80 Outperform
• Price Target: $152.00 ▲(12.86% Upside)

Onto Innovation's strong financial performance and positive earnings call outlook are the primary drivers of its high score. The company's robust balance sheet and strategic acquisitions position it well for future growth. Technical indicators show moderate strength, while valuation suggests the stock may be overvalued. The absence of a dividend yield is a minor drawback for income-focused investors.

Positive Factors

Strategic Acquisition

The acquisition of Semilab International's product lines is expected to significantly boost Onto Innovation's revenue and EPS, enhancing its competitive position in the semiconductor equipment industry.

Strong Financial Health

Onto Innovation's robust balance sheet with low leverage enhances its financial stability and flexibility, enabling it to invest in growth opportunities and withstand industry fluctuations.

Revenue Growth

Consistent revenue growth, as demonstrated by the year-over-year increase, indicates strong market demand and effective business strategies, supporting long-term expansion.

Negative Factors

Free Cash Flow Decline

A decline in free cash flow growth could limit Onto Innovation's ability to fund new projects and return capital to shareholders, potentially impacting future financial flexibility.

Gross Margin Pressure

Decreasing gross margins suggest rising costs or pricing pressures, which could affect profitability if the trend continues, necessitating efficiency improvements or cost management.

Tariff Impact

Tariff impacts can reduce profitability and increase operational costs, challenging Onto Innovation's ability to maintain margin levels in affected markets.

Onto Innovation Business Overview & Revenue Model

Company Description

Onto Innovation Inc. engages in the design, development, manufacture, and support of process control tools that performs macro defect inspection and 2D/3D optical metrology, lithography systems, and process control analytical software worldwide. It offers process and yield management solutions, and device packaging and test facilities through standalone systems for macro-defect inspection, packaging lithography, probe card test and analysis, and transparent and opaque thin film measurements; and process control software portfolio that includes solutions for standalone tools, groups of tools, and enterprise-or factory-wide suites. The company also provides spare parts and software licensing services. Its products are used by semiconductor and advanced packaging device manufacturers; silicon wafer; light emitting diode; vertical-cavity surface-emitting laser; micro-electromechanical system; CMOS image sensor; power device; RF filter; data storage; and various industrial and scientific applications. The company was formerly known as Rudolph Technologies, Inc. Onto Innovation Inc. was founded in 1940 and is headquartered in Wilmington, Massachusetts.

How the Company Makes Money

Onto Innovation generates revenue primarily through the sale of its semiconductor equipment and related services. The company's revenue model is built on several key streams: equipment sales, which include metrology and inspection systems; service contracts that provide maintenance and support for their products; and software solutions that enhance the performance of semiconductor manufacturing processes. Additionally, partnerships with major semiconductor manufacturers and collaborations with research institutions contribute to Onto's earnings by expanding its market reach and facilitating innovation. The company also benefits from industry trends towards increased demand for advanced semiconductor technologies, which drives sales growth.

Onto Innovation Financial Statement Overview

Summary

Onto Innovation exhibits strong financial health with robust revenue growth and profitability. The balance sheet is particularly strong, with low leverage and high equity ratios. While cash flow generation is solid, the recent decline in free cash flow growth warrants monitoring. Overall, the company is well-positioned financially, with strengths in profitability and balance sheet stability.

Income Statement

Onto Innovation has demonstrated strong revenue growth with a TTM increase of 10.99%. The company maintains healthy profit margins, with a gross profit margin of 51.29% and a net profit margin of 19.29% in the TTM period. The EBIT and EBITDA margins are also robust at 20.82% and 26.25%, respectively. However, there is a slight decline in gross profit margin compared to previous periods, indicating potential cost pressures.

Balance Sheet

The balance sheet is strong, characterized by a low debt-to-equity ratio of 0.0068, indicating minimal leverage and financial risk. The return on equity is solid at 10.37%, reflecting efficient use of equity capital. The equity ratio stands at 91.76%, showcasing a strong equity base relative to total assets, which enhances financial stability.

Cash Flow

Cash flow performance is stable, with an operating cash flow to net income ratio of 1.75, indicating good cash generation relative to net income. However, the free cash flow growth rate has declined by 3.59% in the TTM period, which could be a concern if the trend continues. The free cash flow to net income ratio remains strong at 87.30%, suggesting efficient conversion of earnings into cash.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.04B	987.32M	815.87M	1.01B	788.90M	556.50M
Gross Profit	534.14M	515.31M	420.25M	539.22M	429.09M	278.45M
EBITDA	253.43M	249.41M	183.29M	301.38M	222.21M	94.25M
Net Income	199.87M	201.67M	121.16M	223.33M	142.35M	31.02M
Balance Sheet
Total Assets	2.14B	2.12B	1.91B	1.79B	1.65B	1.47B
Cash, Cash Equivalents and Short-Term Investments	894.94M	852.33M	697.81M	547.78M	511.34M	373.72M
Total Debt	13.41M	15.16M	19.52M	22.02M	17.72M	20.93M
Total Liabilities	177.00M	191.21M	173.18M	198.44M	223.76M	203.43M
Stockholders Equity	1.96B	1.93B	1.74B	1.60B	1.43B	1.26B
Cash Flow
Free Cash Flow	238.49M	213.77M	149.40M	118.30M	163.24M	102.16M
Operating Cash Flow	273.17M	245.68M	171.97M	136.70M	175.28M	105.98M
Investing Cash Flow	-125.47M	-226.55M	-103.39M	-55.69M	-141.79M	-48.60M
Financing Cash Flow	-104.95M	-35.67M	-9.47M	-68.35M	2.67M	-53.70M

Onto Innovation Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 134.68
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ONTO, the sentiment is Positive. The current price of 134.68 is above the 20-day moving average (MA) of 133.77, above the 50-day MA of 120.79, and above the 200-day MA of 126.59, indicating a neutral trend. The MACD of 2.75 indicates Positive momentum. The RSI at 52.53 is Neutral, neither overbought nor oversold. The STOCH value of 52.86 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ONTO.

Onto Innovation Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NVMI	83 Outperform	$9.65B	46.51	24.23%	―	43.69%	51.22%
ONTO	80 Outperform	$6.15B	32.65	10.53%	―	15.51%	20.31%
CAMT	77 Outperform	$5.54B	43.60	24.28%	1.13%	27.88%	37.85%
AMKR	76 Outperform	$7.90B	26.10	7.37%	2.30%	-1.20%	-19.46%
SMTC	67 Neutral	$5.65B	290.89	11.57%	―	22.22%	―
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
ALGM	52 Neutral	$5.68B	―	-6.75%	―	-18.82%	-195.20%

Onto Innovation Corporate Events

Onto Innovation Amends Acquisition Deal with Semilab

On June 27, 2025, Onto Innovation Inc. entered into an Equity Purchase Agreement to acquire Semilab USA from Semilab International Zrt., with the deal initially valued at approximately $495 million. However, after a request for additional information from the U.S. Department of Justice, the agreement was amended on October 9, 2025, to exclude the Fourier-Transform infrared spectroscopy reflectometry systems business, reducing the purchase price by about $50 million. The transaction is expected to be completed in 2025, with the acquired business projected to generate $120 million in annual revenue and increase earnings per share by 10% in the first year post-acquisition.

The most recent analyst rating on (ONTO) stock is a Buy with a $170.00 price target. To see the full list of analyst forecasts on Onto Innovation stock, see the ONTO Stock Forecast page.

Onto Innovation’s Earnings Call: Strong Q2 Amid Challenges

Onto Innovation’s recent earnings call reflected a generally positive sentiment, with the company showcasing a robust performance in the second quarter of 2025. The call highlighted strategic acquisitions and growth in AI packaging and advanced nodes as key drivers of this success. However, there were concerns about a potential revenue slowdown and the impact of tariffs in the upcoming quarter.

Onto Innovation Reports Strong Q2 2025 Results

Onto Innovation Inc., a leader in process control technologies for the semiconductor industry, is known for its advanced metrology and inspection solutions that enhance device performance and reliability. The company recently reported its second-quarter results for 2025, showcasing a robust performance with revenue surpassing the midpoint of its guidance range. Significant strides were made with the expansion of the Dragonfly 3Di metrology footprint and a notable acquisition of product lines from Semilab International Zrt., expected to boost annual revenue significantly.