Onto Innovation (ONTO) AI Stock Analysis

• Market Cap: $4.69B
• Dividend Yield: N/A
• Average Volume (3M): 1.62M
• Price to Earnings (P/E): 21.8
• Beta (1Y): 2.27
• Revenue Growth: 21.23%
• EPS Growth: 56.90%
• Country: US
• Employees: 1,551
• Sector: Technology
• Sector Strength: 80
• Industry: Semiconductors
• EPS (TTM): 1.51
• Shares Outstanding: 48,874,348
• 10 Day Avg. Volume: 2,375,546
• 30 Day Avg. Volume: 1,621,916
• PEG Ratio: 2.17
• Price to Book (P/B): 2.27
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 20.22
• Enterprise Value/Market Cap: 0.88
• Enterprise Value/Revenue: 1.12
• Enterprise Value/Gross Profit: 8.41
• Enterprise Value/Ebitda: 4.51
• 1Y Price Target: $140.25
• Price Target Upside: 49.81% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 8

• Rating: 74 Outperform
• Price Target: $117.00 ▲(24.97%Upside)

Onto Innovation's overall score reflects its strong financial performance and robust earnings growth, despite some technical weaknesses. The company's financial health is solid, with strong profitability and cash generation capabilities. However, technical indicators suggest a short-term bearish trend, and valuation is moderate without a dividend yield. Earnings call insights reveal a cautious but optimistic outlook, balancing record revenue with potential challenges like tariffs and expected revenue declines in Q3.

Positive Factors

Financial Performance

Onto’s 1Q25 non-GAAP earnings of $1.51 per diluted share were $0.03 above investor expectations.

Sales Growth

Onto posted upside results including record sales.

Technology Development

Onto is accelerating development and introduction of its next-gen inspection platform, which could improve market share.

Negative Factors

Market Competition

Onto Innovation reported a disappointing quarter with the official announcement of 2.5D share loss to KLAC.

Revenue Decline

2.5D revenue is projected to be down approximately 25% year over year.

Tariffs Impact

Tariffs are expected to impact margins by 75 bps.

Onto Innovation Business Overview & Revenue Model

Company Description

Onto Innovation Inc. (ONTO) is a leading global supplier specializing in advanced process control solutions, primarily serving the semiconductor industry. The company provides a comprehensive suite of products and services, including metrology, inspection, lithography equipment, and software analytics, which are integral to the manufacturing process of semiconductor devices. Onto Innovation's cutting-edge technologies enable semiconductor manufacturers to improve yield and performance while reducing manufacturing costs.

How the Company Makes Money

Onto Innovation generates revenue through the sale of its advanced process control systems and related services to semiconductor manufacturers and other high-tech industries. Key revenue streams include the sales of metrology and inspection equipment, which are essential for ensuring quality and precision in semiconductor fabrication. Additionally, Onto Innovation offers software solutions that provide data analysis and insights, enhancing the efficiency of manufacturing processes. The company also earns revenue from service contracts and support agreements, providing maintenance and upgrades for its equipment. Partnerships with leading semiconductor firms and ongoing innovation in product offerings significantly contribute to Onto Innovation's earnings.

Onto Innovation Financial Statement Overview

Summary

Onto Innovation demonstrates strong financial health with impressive revenue growth of 21% year-over-year, high profitability with a net profit margin of 20.4%, and a robust balance sheet with no debt. The company also shows solid cash flow generation with a healthy free cash flow growth of 43.1% year-over-year, although capital expenditures are impacting free cash flow.

Income Statement

Onto Innovation's income statement reflects strong profitability with a gross profit margin of 52.2% and a net profit margin of 20.4% in the latest annual report. Revenue grew by 21% year-over-year, indicating strong demand and market position. However, the EBIT margin of 18.9% suggests room for operational efficiency improvements.

Balance Sheet

The balance sheet is robust, with a debt-to-equity ratio of 0.00, indicating no reliance on debt financing. The company maintains a strong equity ratio of 91.0%, reflecting financial stability and low leverage. The return on equity stands at 10.5%, showing effective use of shareholder funds.

Cash Flow

Cash flow analysis reveals a healthy free cash flow growth of 43.1% year-over-year. The operating cash flow to net income ratio of 1.2 indicates solid cash generation relative to earnings. However, lower free cash flow to net income ratio of 1.1 suggests capital expenditures are impacting free cash flow.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Mar 2022	Dec 2020
Income Statement		Total Revenue
987.32M	815.87M	1.01B	788.90M	556.50M
	Gross Profit
515.31M	420.25M	539.22M	429.09M	278.45M
	EBIT
187.10M	116.08M	236.71M	156.41M	26.68M
	EBITDA
249.41M	183.29M	301.38M	222.21M	94.25M
	Net Income Common Stockholders
201.67M	121.16M	223.33M	142.35M	31.02M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
852.33M	697.81M	547.78M	511.34M	373.72M
	Total Assets
2.12B	1.91B	1.79B	1.65B	1.47B
	Total Debt
15.16M	19.52M	22.02M	17.72M	20.93M
	Net Debt
-197.79M	-213.99M	-153.85M	-151.88M	-115.80M
	Total Liabilities
191.21M	173.18M	198.44M	223.76M	203.43M
	Stockholders Equity
1.93B	1.74B	1.60B	1.43B	1.26B
Cash Flow		Free Cash Flow
213.77M	149.40M	118.30M	163.24M	102.16M
	Operating Cash Flow
245.68M	171.97M	136.70M	175.28M	105.98M
	Investing Cash Flow
-226.55M	-103.39M	-55.69M	-141.79M	-48.60M
	Financing Cash Flow
-35.67M	-9.47M	-68.35M	2.67M	-53.70M

Onto Innovation Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 93.62
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• 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 Negative. The current price of 93.62 is below the 20-day moving average (MA) of 106.01, below the 50-day MA of 116.36, and below the 200-day MA of 167.53, indicating a bearish trend. The MACD of -7.53 indicates Positive momentum. The RSI at 38.14 is Neutral, neither overbought nor oversold. The STOCH value of 23.13 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ONTO.

Onto Innovation Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NVMI	80 Outperform	$5.80B	30.50	23.87%	―	41.03%	51.42%
CAMT	79 Outperform	$3.01B	24.97	24.82%	2.01%	32.63%	46.16%
ONTO	74 Outperform	$4.69B	21.76	11.83%	―	21.23%	56.90%
SLAB	66 Neutral	$4.08B	―	-14.77%	―	2.16%	-55.38%
IPGP	62 Neutral	$2.85B	―	-9.17%	―	-20.08%	-218.29%
Sector *	61 Neutral	$11.51B	10.19	-6.93%	2.94%	7.57%	-9.20%
ALGM	60 Neutral	$4.83B	―	-7.09%	―	-30.91%	-148.73%

Onto Innovation Corporate Events

Onto Innovation Holds 2025 Annual Stockholder Meeting

Onto Innovation held its 2025 Annual Meeting on May 21, 2025, in Milpitas, California, where stockholders voted on three key proposals. The stockholders elected seven directors to serve until the next annual meeting, approved executive compensation on an advisory basis, and ratified Ernst & Young LLP as the independent registered public accounting firm for the fiscal year ending January 3, 2026.

The most recent analyst rating on (ONTO) stock is a Buy with a $260.00 price target. To see the full list of analyst forecasts on Onto Innovation stock, see the ONTO Stock Forecast page.

Onto Innovation Announces Senior VP Resignation

On April 1, 2025, Dr. Srinivas Vedula informed Onto Innovation Inc. of his resignation as Senior Vice President, Customer Success, effective April 8, 2025, to pursue other opportunities. His departure was not due to any disagreements with the company regarding its operations, policies, or practices.