Onto Innovation (ONTO) AI Stock Analysis

• Market Cap: $7.71B
• Dividend Yield: N/A
• Average Volume (3M): 857.10K
• Price to Earnings (P/E): 44.4
• Beta (1Y): 2.47
• Revenue Growth: 6.38%
• EPS Growth: -4.15%
• Country: US
• Employees: 1,551
• Sector: Technology
• Sector Strength: 88
• Industry: Semiconductors
• EPS (TTM): 0.92
• Shares Outstanding: 49,011,160
• 10 Day Avg. Volume: 627,171
• 30 Day Avg. Volume: 857,095
• 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: 0.69
• Enterprise Value/Revenue: 5.28
• Enterprise Value/Gross Profit: 10.42
• Enterprise Value/Ebitda: 23.06
• 1Y Price Target: $158.44
• Price Target Upside: -1.29% Downside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 9
• EPS Forecast (FY): 4.96
• Revenue Forecast (FY): $1.00B

• Rating: 83 Outperform
• Price Target: $183.00 ▲(14.01% Upside)

Onto Innovation's strong financial health, positive earnings call, and bullish technical indicators drive a high overall score. The company's strategic initiatives in AI and advanced packaging, along with the successful acquisition of Semilab, support a positive growth outlook. However, high valuation metrics and potential overbought technical signals warrant cautious optimism.

Positive Factors

Strong Cash Generation

Onto Innovation's robust cash generation enhances its financial flexibility, supporting strategic investments and operational stability.

Advanced Packaging and Nodes Achievements

Success in advanced packaging and nodes positions Onto Innovation for significant market share gains and long-term growth.

Semilab Acquisition

The acquisition of Semilab is expected to be accretive to revenue and earnings, enhancing Onto Innovation's competitive position.

Negative Factors

Tariff Impact on Gross Margin

Continued tariff impacts on gross margins could pressure profitability, affecting long-term financial performance.

NAND Revenue Weakness

Weakness in NAND revenue suggests potential vulnerabilities in product demand, impacting overall revenue growth.

Acquisition Delays and Adjustments

Delays and adjustments in the Semilab acquisition process may hinder strategic execution and integration efforts.

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 core products, which include metrology and inspection systems, alongside software solutions that support semiconductor manufacturing processes. The company primarily earns money through direct sales to semiconductor manufacturers, as well as recurring revenue from service contracts, maintenance agreements, and software licensing. Key revenue streams include new system sales, upgrades to existing systems, and ongoing support services. Additionally, Onto Innovation benefits from strategic partnerships with major semiconductor firms, which can lead to collaborative development projects and enhanced market penetration, thereby contributing to its overall earnings.

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	1.00B	987.32M	815.87M	1.01B	788.90M	556.50M
Gross Profit	508.39M	515.31M	420.25M	539.22M	429.09M	278.45M
EBITDA	229.61M	249.41M	183.29M	301.38M	222.21M	94.25M
Net Income	175.05M	201.67M	121.16M	223.33M	142.35M	31.02M
Balance Sheet
Total Assets	2.19B	2.12B	1.91B	1.79B	1.65B	1.47B
Cash, Cash Equivalents and Short-Term Investments	983.93M	852.33M	697.81M	547.78M	511.34M	373.72M
Total Debt	14.07M	15.16M	19.52M	22.02M	17.72M	20.93M
Total Liabilities	184.54M	191.21M	173.18M	198.44M	223.76M	203.43M
Stockholders Equity	2.00B	1.93B	1.74B	1.60B	1.43B	1.26B
Cash Flow
Free Cash Flow	261.31M	213.77M	149.40M	118.30M	163.24M	102.16M
Operating Cash Flow	289.32M	245.68M	171.97M	136.70M	175.28M	105.98M
Investing Cash Flow	227.84M	-226.55M	-103.39M	-55.69M	-141.79M	-48.60M
Financing Cash Flow	-103.54M	-35.67M	-9.47M	-68.35M	2.67M	-53.70M

Onto Innovation Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 160.51
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

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 160.51 is above the 20-day moving average (MA) of 139.59, above the 50-day MA of 136.32, and above the 200-day MA of 117.92, indicating a bullish trend. The MACD of 7.11 indicates Negative momentum. The RSI at 69.85 is Neutral, neither overbought nor oversold. The STOCH value of 93.35 is Negative, 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
ONTO	83 Outperform	$7.71B	44.37	8.96%	―	6.38%	-4.15%
NVMI	81 Outperform	$9.90B	42.59	23.58%	―	39.37%	40.87%
CAMT	76 Outperform	$5.36B	132.46	8.76%	―	21.12%	-54.97%
SMTC	71 Outperform	$7.37B	261.70	13.39%	―	20.60%	―
AMKR	68 Neutral	$10.69B	34.84	7.27%	0.74%	0.13%	-16.17%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
ALGM	52 Neutral	$5.41B	―	-3.02%	―	-7.23%	-15.69%

Onto Innovation Corporate Events

Onto Innovation Adopts New Deferred Compensation Plan

Onto Innovation Inc. announced the adoption of a Nonqualified Deferred Compensation Plan on November 19, 2025, which will take effect on January 1, 2026. This plan allows designated employees and non-employee directors to defer a portion of their compensation, with executive officers initially eligible to participate. The plan includes options for deferring up to 75% of annual salary and 100% of bonuses for employees, and up to 100% of retainers and fees for directors. Contributions are fully vested, and the company may also contribute to participant accounts. Distributions can be made in lump sums or installments over a specified period, providing flexibility for participants.

Onto Innovation Completes Acquisition of Semilab USA

On November 17, 2025, Onto Innovation Inc. completed its acquisition of Semilab USA LLC, enhancing its capabilities in materials characterization for advanced logic, AI-enabling advanced packaging, and power semiconductors. The acquisition, valued at approximately $495 million, is expected to contribute significantly to Onto Innovation’s revenue, with an immediate positive impact on margins and earnings per share in the fourth quarter of 2025, and an anticipated $120 million revenue contribution in 2026.

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.