Onto Innovation (ONTO) AI Stock Analysis

• Market Cap: $4.63B
• Dividend Yield: N/A
• Average Volume (3M): 1.75M
• Price to Earnings (P/E): 21.5
• Beta (1Y): 2.28
• Revenue Growth: 21.23%
• EPS Growth: 56.90%
• Country: US
• Employees: 1,551
• Sector: Technology
• Sector Strength: 78
• Industry: Semiconductors
• EPS (TTM): 1.51
• Shares Outstanding: 48,874,348
• 10 Day Avg. Volume: 1,057,144
• 30 Day Avg. Volume: 1,748,174
• PEG Ratio: 0.27
• Price to Book (P/B): 2.11
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 28.45
• Enterprise Value/Market Cap: 0.69
• Enterprise Value/Revenue: 0.83
• Enterprise Value/Gross Profit: 6.08
• Enterprise Value/Ebitda: 3.31
• 1Y Price Target: $140.25
• Price Target Upside: 48.10% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 8

• Rating: 74 Outperform
• Price Target: $117.00 ▲(23.55%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

Advanced Node Growth

Advanced Node sales grew 92% sequentially.

Sales Performance

Onto posted upside results including record sales.

Technological Development

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

Negative Factors

Margin Impact

Since all of Nova’s products are made in the U.S. tariffs are expected to impact margins by 75 bps.

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.

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 through the sale of its metrology and inspection systems, which are crucial for semiconductor manufacturers to maintain high-quality production standards. The company also offers software solutions that enhance the efficiency and effectiveness of these systems. Key revenue streams include direct sales of equipment and software licenses, as well as service contracts for ongoing support and maintenance. Onto Innovation's earnings are bolstered by strategic partnerships with leading semiconductor manufacturers and technology firms, which help drive technological advancement and expand market reach. Additionally, the company benefits from the growing demand for semiconductors across various industries, including consumer electronics, automotive, and telecommunications.

Onto Innovation Financial Statement Overview

Summary

Onto Innovation demonstrates strong financial health characterized by 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. The company's financial metrics position it well within the competitive semiconductor industry.

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	Mar 2022	Dec 2020
Income Statement		Total Revenue
1.03B	987.32M	815.87M	1.01B	788.90M	556.50M
	Gross Profit
527.85M	515.31M	420.25M	539.22M	429.09M	278.45M
	EBIT
208.82M	187.10M	116.08M	236.71M	156.41M	26.68M
	EBITDA
254.63M	249.41M	183.29M	301.38M	222.21M	94.25M
	Net Income Common Stockholders
218.91M	201.67M	121.16M	223.33M	142.35M	31.02M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
850.61M	852.33M	697.81M	547.78M	511.34M	373.72M
	Total Assets
2.12B	2.12B	1.91B	1.79B	1.65B	1.47B
	Total Debt
14.61M	15.16M	19.52M	22.02M	17.72M	20.93M
	Net Debt
-189.11M	-197.79M	-213.99M	-153.85M	-151.88M	-115.80M
	Total Liabilities
195.43M	191.21M	173.18M	198.44M	223.76M	203.43M
	Stockholders Equity
1.92B	1.93B	1.74B	1.60B	1.43B	1.26B
Cash Flow		Free Cash Flow
247.36M	213.77M	149.40M	118.30M	163.24M	102.16M
	Operating Cash Flow
280.52M	245.68M	171.97M	136.70M	175.28M	105.98M
	Investing Cash Flow
-156.53M	-226.55M	-103.39M	-55.69M	-141.79M	-48.60M
	Financing Cash Flow
-110.12M	-35.67M	-9.47M	-68.35M	2.67M	-53.70M

Onto Innovation Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 94.70
• 50DMA: Negative
• 100DMA: Negative
• 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 Negative. The current price of 94.7 is below the 20-day moving average (MA) of 96.27, below the 50-day MA of 107.93, and below the 200-day MA of 160.95, indicating a bearish trend. The MACD of -3.12 indicates Negative momentum. The RSI at 41.94 is Neutral, neither overbought nor oversold. The STOCH value of 61.76 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	$6.53B	33.73	23.87%	―	41.03%	51.42%
CAMT	79 Outperform	$3.21B	26.60	24.82%	1.89%	32.63%	46.16%
ONTO	74 Outperform	$4.63B	21.45	11.83%	―	21.23%	56.90%
SLAB	66 Neutral	$4.49B	―	-14.77%	―	2.16%	-55.38%
IPGP	62 Neutral	$2.80B	―	-9.17%	―	-20.08%	-218.29%
Sector *	62 Neutral	$11.80B	10.08	-7.46%	2.99%	7.37%	-8.21%
ALGM	60 Neutral	$5.30B	―	-7.09%	―	-30.91%	-148.73%

Onto Innovation Corporate Events

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.

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 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.