Onto Innovation (ONTO) AI Stock Analysis

• Market Cap: $5.34B
• Dividend Yield: N/A
• Average Volume (3M): 1.34M
• Price to Earnings (P/E): 26.9
• Beta (1Y): 2.33
• Revenue Growth: 15.51%
• EPS Growth: 20.31%
• Country: US
• Employees: 1,551
• Sector: Technology
• Sector Strength: 85
• Industry: Semiconductors
• EPS (TTM): 1.25
• Shares Outstanding: 49,003,570
• 10 Day Avg. Volume: 1,130,613
• 30 Day Avg. Volume: 1,338,324
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 0.74
• Enterprise Value/Revenue: 3.83
• Enterprise Value/Gross Profit: 7.46
• Enterprise Value/Ebitda: 14.58
• 1Y Price Target: $124.86
• Price Target Upside: 14.67% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 7

• Rating: 79 Outperform
• Price Target: $124.00 ▲(13.88% Upside)

Onto Innovation's strong financial performance and strategic acquisitions are key strengths, supporting a positive outlook. Technical indicators suggest bullish momentum, although valuation remains moderate. The company's strategic initiatives and leadership changes are expected to drive future growth.

Positive Factors

Acquisition

Onto announced that it has entered into a definitive agreement to acquire the materials analysis business of Semilab International for $475 million in cash and 706,215 shares of Onto Innovation common stock.

Product Development

Onto Innovation has improved its Dragonfly defect tool and received encouraging feedback from a recent customer demo.

Negative Factors

Financial Performance

Onto reported earnings for 2Q25 that were three cents below investor expectations and guided lower for 3Q25 due to softness in the Advanced Node segment.

Market Competition

ONTO’s shares have suffered a 50% haircut since late January primarily due to share loss at AI customers to KLA-Tencor in the defect analysis business.

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 demonstrates strong financial health with stable revenue growth, robust profitability margins, and efficient cash flow management. The balance sheet reflects a low leverage position, providing a solid foundation for future growth, although there may be potential to leverage debt more effectively for further expansion.

Income Statement

Onto Innovation shows strong profitability with a consistent increase in total revenue and net income over the years. The TTM gross profit margin is 51.48% and the net profit margin stands at 21.37%, indicating efficient cost management and strong profit generation. EBIT and EBITDA margins are also healthy at 20.37% and 24.84% respectively. Revenue growth rate from the previous annual report to TTM is 3.82%, showing a steady upward trend.

Balance Sheet

The company maintains a solid financial position with a low debt-to-equity ratio of 0.01 and a strong equity ratio of 90.77%, reflecting financial stability and low leverage. Return on equity (ROE) is robust at 11.40%, demonstrating effective utilization of equity. However, the high equity ratio might indicate underutilization of debt financing for growth opportunities.

Cash Flow

Onto Innovation exhibits strong cash flow management with a healthy operating cash flow to net income ratio of 1.28 and free cash flow to net income ratio of 1.13, suggesting efficient conversion of income into cash. The free cash flow growth rate from the previous year is 15.72%, highlighting robust cash generation capabilities.

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	531.57M	515.31M	420.25M	539.22M	429.09M	278.45M
EBITDA	272.03M	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: 108.89
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Negative
• 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 108.89 is above the 20-day moving average (MA) of 103.27, above the 50-day MA of 100.91, and below the 200-day MA of 135.94, indicating a neutral trend. The MACD of 2.47 indicates Negative momentum. The RSI at 58.82 is Neutral, neither overbought nor oversold. The STOCH value of 52.38 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	84 Outperform	$7.64B	35.46	24.23%	―	43.69%	51.22%
ONTO	79 Outperform	$5.34B	26.95	10.53%	―	15.51%	20.31%
CAMT	77 Outperform	$4.05B	30.49	24.28%	1.61%	27.88%	37.85%
Sector *	61 Neutral	$35.62B	8.22	-10.94%	1.88%	8.86%	-10.36%
IPGP	59 Neutral	$3.45B	―	-9.89%	―	-14.77%	-261.91%
SLAB	57 Neutral	$4.65B	―	-9.71%	―	29.66%	47.97%
ALGM	57 Neutral	$5.86B	―	-6.75%	―	-18.82%	-195.20%

Onto Innovation Corporate Events

Onto Innovation Acquires Semilab USA for $475 Million

On June 27, 2025, Onto Innovation Inc. announced an agreement to acquire Semilab USA for $475 million in cash and shares, with the transaction expected to close in the second half of 2025. This acquisition is anticipated to add over $130 million to annual revenue, enhance Onto Innovation’s market position in high-growth semiconductor segments, and be immediately accretive to margins and earnings per share.

Onto Innovation Appoints New CFO Brian Roberts

On June 12, 2025, Onto Innovation Inc. announced the appointment of Brian Roberts as the new Chief Financial Officer, effective June 16, 2025. Roberts brings extensive experience from his previous roles, including CFO at Sensata Technologies and CEO at Tarveda Therapeutics. His employment agreement includes a base salary, bonus incentives, equity grants, and severance benefits, reflecting Onto Innovation’s strategic focus on strengthening its financial leadership and operational stability.

Onto Innovation Announces CFO Departure Effective Immediately

On June 12, 2025, Onto Innovation, Inc. announced the mutual termination of employment with its Chief Financial Officer, Mr. Mark Slicer, effective immediately. The separation was amicable and not due to any disagreements regarding the company’s operations, policies, or practices.

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.