Onto Innovation Inc (ONTO)
NYSE:ONTO
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Onto Innovation
(NYSE:ONTO)
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Rating:80Outperform
Price Target:
$344.00
▲(18.31% Upside)
Action:ReiteratedDate:05/06/26
The score is driven primarily by strong financial quality (debt-free balance sheet and robust free cash flow) and upbeat earnings-call guidance pointing to accelerating growth and margin expansion. Positive technical momentum supports the outlook. The main constraint is valuation, with an extremely high P/E that increases downside sensitivity if execution or end-demand weakens.
Positive Factors
Debt-free balance sheet & strong cash generation
A debt-free capital structure plus roughly $300M free cash flow in 2026 provides durable financial flexibility. It supports sustained R&D, product qualification, service infrastructure and selective M&A or investments without reliance on high-cost debt, cushioning cyclical WFE swings over months.
Negative Factors
Sustained margin compression versus prior peaks
Lower net margins and moderated ROE versus prior peak levels indicate reduced operating leverage or higher structural costs. If margins remain below historical peaks, free cash flow conversion and long-term returns on equity could be muted even as revenue grows, pressuring reinvestment capacity.
Read all positive and negative factors
Positive Factors
Negative Factors
Debt-free balance sheet & strong cash generation
A debt-free capital structure plus roughly $300M free cash flow in 2026 provides durable financial flexibility. It supports sustained R&D, product qualification, service infrastructure and selective M&A or investments without reliance on high-cost debt, cushioning cyclical WFE swings over months.
Read all positive factors
Onto Innovation (ONTO) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$14.90B
Dividend YieldN/A
Average Volume (3M)742.05K
Price to Earnings (P/E)194.3
Beta (1Y)2.35
Revenue Growth1.82%
EPS Growth-31.84%
CountryUS
Employees1,551
SectorTechnology
Sector Strength88
IndustrySemiconductors
Share Statistics
EPS (TTM)2.78
Shares Outstanding49,743,570
10 Day Avg. Volume826,385
30 Day Avg. Volume742,046
Financial Highlights & Ratios
PEG Ratio-1.86
Price to Book (P/B)3.88
Price to Sales (P/S)8.11
P/FCF Ratio27.18
Enterprise Value/Market Cap1.02
Enterprise Value/Revenue15.09
Enterprise Value/Gross Profit30.36
Enterprise Value/Ebitda68.84
Forecast
1Y Price Target
$334.29Price Target Upside14.97% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering7
EPS Forecast (FY)7.07
Revenue Forecast (FY)$1.32B
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. I...
How the Company Makes Money
Onto Innovation primarily makes money by selling semiconductor capital equipment—metrology and inspection tools used in-line or at-line in semiconductor manufacturing to detect defects, measure critical dimensions/film properties, and control proc...
Onto Innovation Key Performance Indicators (KPIs)
Any
Revenue by Segment
Reveals how different parts of the business contribute to overall sales, highlighting key areas of strength and potential vulnerabilities in the company's operations.
Reveals how different parts of the business contribute to overall sales, highlighting key areas of strength and potential vulnerabilities in the company's operations.
Data provided by:
The Fly
The FlyOnto Innovation Earnings Call Summary
Earnings Call Date:May 05, 2026
(Q1-2026)
| Next Earnings Date:Aug 06, 2026
Earnings Call Sentiment Positive
The call conveyed strong execution and robust demand drivers: Q1 results beat guidance, margins expanded, EPS improved, and management provided ambitious 2026 and Q2 guidance. Strategic moves (27% Rigaku stake) and product qualifications (Dragonfly G5, Atlas G6, TSV win, JetStep) position the company for sizable growth, particularly in advanced packaging (>50% growth) and advanced nodes (~25%). Offsetting factors include rising input and logistics costs, modest near-term margin impact from new product volume, supply-chain/lead-time pressure, and accounting/ cash-use considerations related to the Rigaku investment. Overall, the positive operational momentum and sizable growth catalysts appear to outweigh the near-term headwinds.Positive Updates
Revenue Beat and Upside Guidance
Q1 revenue of $292 million, up nearly 10% sequentially, exceeded the high end of company guidance. Q2 revenue guidance of $320–$330 million (midpoint cited as +20% YoY by CEO and +28% YoY by CFO in the call). Company expects 2026 revenue growth of more than 30% and total 2026 revenue greater than $1.3 billion.
Negative Updates
Rising Input Costs and Margin Headwinds
Management flagged increasing headwinds from certain material input costs (notably memory-related inputs), higher fuel and shipping charges, and the need to invest in R&D and services to support the ramp, which could pressure margins despite guidance to expand margins.
Read all updates
Q1-2026 Updates
Positive
Negative
Revenue Beat and Upside Guidance
Q1 revenue of $292 million, up nearly 10% sequentially, exceeded the high end of company guidance. Q2 revenue guidance of $320–$330 million (midpoint cited as +20% YoY by CEO and +28% YoY by CFO in the call). Company expects 2026 revenue growth of more than 30% and total 2026 revenue greater than $1.3 billion.
Read all positive updates
Company Guidance
Management guided Q2 revenue of $320–$330 million (midpoint noted as materially above prior analyst expectations), Q2 gross margin of 56.0%–56.5%, operating expenses of $90–$92 million, operating margin of 28.0%–28.6% and non‑GAAP EPS of about $1.69 at the midpoint (assuming ~15% tax rate and just over 50 million shares outstanding). They reaffirmed 2026 revenue above $1.3 billion (total 2026 growth >30%), expect advanced packaging revenue to grow >50% and advanced nodes to grow ~25% in 2026, foresee second‑half revenue accelerating at least 15% over the first half (with >15% sequential growth in H2), plan gross‑margin expansion (Q3 up at least 50 bps per quarter) and to exit Q4 with operating margin >30%; for context, Q1 results were $292M revenue, 55.7% gross margin, 26.7% operating margin and $1.42 EPS.Onto Innovation Financial Statement Overview
Summary
Income Statement
72
Positive
Balance Sheet
92
Very Positive
Cash Flow
85
Very Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 1.01B | 987.32M | 815.87M | 1.01B | 788.90M |
| Gross Profit | 499.77M | 515.31M | 420.25M | 539.22M | 429.09M |
| EBITDA | 223.34M | 249.41M | 183.29M | 301.38M | 222.21M |
| Net Income | 136.76M | 201.67M | 121.16M | 223.33M | 142.35M |
Balance Sheet | |||||
| Total Assets | 2.37B | 2.12B | 1.91B | 1.79B | 1.65B |
| Cash, Cash Equivalents and Short-Term Investments | 639.62M | 852.33M | 697.81M | 547.78M | 511.34M |
| Total Debt | 17.48M | 15.16M | 19.52M | 22.02M | 17.72M |
| Total Liabilities | 267.09M | 191.21M | 173.18M | 198.44M | 223.76M |
| Stockholders Equity | 2.10B | 1.93B | 1.74B | 1.60B | 1.43B |
Cash Flow | |||||
| Free Cash Flow | 299.80M | 213.77M | 149.40M | 118.30M | 163.24M |
| Operating Cash Flow | 328.31M | 245.68M | 171.97M | 136.70M | 175.28M |
| Investing Cash Flow | -121.57M | -226.55M | -103.39M | -55.69M | -141.79M |
| Financing Cash Flow | -75.15M | -35.67M | -9.47M | -68.35M | 2.67M |
Onto Innovation Technical Analysis
Positive
290.76
Price Trends
216.50
Positive
195.80
Positive
156.35
Positive
Market Momentum
17.87
Negative
76.33
Negative
87.02
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 290.76 is above the 20-day moving average (MA) of 229.85, above the 50-day MA of 216.50, and above the 200-day MA of 156.35, indicating a bullish trend. The MACD of 17.87 indicates Negative momentum. The RSI at 76.33 is Negative, neither overbought nor oversold. The STOCH value of 87.02 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ONTO.
Onto Innovation Risk Analysis
Onto Innovation disclosed 40 risk factors in its most recent earnings report. Onto Innovation reported the most risks in the "Tech & Innovation" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Onto Innovation Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $14.90B | 194.34 | 6.85% | ― | 1.82% | -31.84% | |
74 Outperform | $15.65B | 39.37 | 22.70% | ― | 30.96% | 37.48% | |
71 Outperform | $8.37B | 33.85 | 8.42% | ― | 15.57% | -57.34% | |
70 Outperform | $17.59B | 33.43 | 9.96% | 0.81% | 12.71% | 37.49% | |
66 Neutral | $9.97B | -63.06 | -7.22% | ― | 15.48% | 82.89% | |
66 Neutral | $9.17B | 149.88 | -1.40% | ― | 8.67% | 79.04% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% |
* Technology Sector Average
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Onto Innovation Corporate Events
Business Operations and StrategyM&A TransactionsPrivate Placements and Financing
Onto Innovation Takes Strategic Minority Stake in Rigaku
Positive
Apr 21, 2026
Onto Innovation on April 20, 2026 announced a strategic collaboration with Rigaku Holdings Corporation, a leading X-ray technology provider, to jointly develop next-generation process control solutions for semiconductor manufacturing by integratin...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.