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Onto Innovation
(NYSE:ONTO)
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Rating:79Outperform
Price Target:
$321.00
▲(10.40% Upside)
Action:Reiterated
Date:07/01/26
The score is driven primarily by strong financial resilience (debt-free balance sheet and solid cash conversion) and bullish price trend versus major moving averages, supported by an upbeat earnings call with raised/ambitious growth and margin guidance. These positives are tempered by very expensive valuation (high P/E) and higher risk characteristics (high beta), plus incremental dilution/structure risk from the convertible financing.
Positive Factors
Conservative balance sheet & cash conversion
Zero reported debt, rising equity and strong operating cash conversion provide durable financial flexibility across semiconductor cycles. This conservatism supports capital allocation for R&D, strategic investments, and opportunistic buybacks without stressing liquidity, preserving long-term optionality.
Negative Factors
Margin compression and weaker profitability trend
Material margin and net income compression versus 2022–2024 reduces internal cash generation and returns on invested capital. If new-product volumes and mix improvements lag, lower margins could constrain R&D, services expansion and shareholder returns over the medium term.
Read all positive and negative factors
Positive Factors
Negative Factors
Conservative balance sheet & cash conversion
Zero reported debt, rising equity and strong operating cash conversion provide durable financial flexibility across semiconductor cycles. This conservatism supports capital allocation for R&D, strategic investments, and opportunistic buybacks without stressing liquidity, preserving long-term optionality.
Read all positive factors
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 (ONTO) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$14.50B
Dividend YieldN/A
Average Volume (3M)1.36M
Price to Earnings (P/E)146.8
Beta (1Y)2.25
Revenue Growth0.54%
EPS Growth-51.32%
CountryUS
Employees1,551
SectorTechnology
Sector Strength88
IndustrySemiconductors
Share Statistics
EPS (TTM)2.16
Shares Outstanding49,743,570
10 Day Avg. Volume1,568,956
30 Day Avg. Volume1,357,886
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 Cap1.08
Enterprise Value/Revenue15.15
Enterprise Value/Gross Profit31.04
Enterprise Value/Ebitda75.08
Forecast
1Y Price Target
$366.55Price Target Upside26.06% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering11
EPS Forecast (FY)7.18
Revenue Forecast (FY)$1.34B
Onto Innovation Business Overview & Revenue Model
Company Description
Onto Innovation Inc. is a global leader in designing, manufacturing, and supporting cutting-edge process control solutions. The company's diverse portfolio encompasses tools for macro defect inspection, 2D/3D optical metrology, and lithography sys...
How the Company Makes Money
Onto Innovation primarily makes money by selling capital equipment used for semiconductor metrology and inspection. Revenue is largely generated from (1) product sales of its process control tools (inspection and metrology systems deployed in semi...
Onto Innovation Earnings Call Summary
Earnings Call Date:May 05, 2026
(Q1-2026)
| % Change Since: |
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
78
Positive
Balance Sheet
92
Very Positive
Cash Flow
80
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.03B | 1.01B | 987.32M | 815.87M | 1.01B | 788.90M |
| Gross Profit | 502.93M | 499.77M | 515.31M | 420.25M | 539.22M | 429.09M |
| EBITDA | 207.95M | 223.34M | 282.76M | 199.79M | 306.25M | 221.48M |
| Net Income | 106.41M | 136.76M | 201.67M | 121.16M | 223.33M | 142.35M |
Balance Sheet | ||||||
| Total Assets | 2.40B | 2.37B | 2.12B | 1.91B | 1.79B | 1.65B |
| Cash, Cash Equivalents and Short-Term Investments | 654.16M | 639.62M | 852.33M | 697.81M | 547.78M | 511.34M |
| Total Debt | 0.00 | 17.48M | 15.16M | 19.52M | 22.02M | 17.72M |
| Total Liabilities | 264.18M | 267.09M | 191.21M | 173.18M | 198.44M | 223.76M |
| Stockholders Equity | 2.13B | 2.10B | 1.93B | 1.74B | 1.60B | 1.43B |
Cash Flow | ||||||
| Free Cash Flow | 238.79M | 299.80M | 213.77M | 149.40M | 118.30M | 163.24M |
| Operating Cash Flow | 262.66M | 328.31M | 245.68M | 171.97M | 136.70M | 175.28M |
| Investing Cash Flow | -212.37M | -121.57M | -226.55M | -103.39M | -55.69M | -141.79M |
| Financing Cash Flow | -2.33M | -75.15M | -35.67M | -9.47M | -68.35M | 2.67M |
Onto Innovation Technical Analysis
Positive
290.76
Price Trends
293.45
Positive
260.12
Positive
209.43
Positive
Market Momentum
5.85
Positive
51.73
Neutral
23.40
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 290.76 is below the 20-day moving average (MA) of 321.84, below the 50-day MA of 293.45, and above the 200-day MA of 209.43, indicating a neutral trend. The MACD of 5.85 indicates Positive momentum. The RSI at 51.73 is Neutral, neither overbought nor oversold. The STOCH value of 23.40 is Neutral, 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 |
|---|---|---|---|---|---|---|---|
79 Outperform | $14.50B | 146.77 | 5.19% | ― | 0.54% | -51.32% | |
70 Outperform | $16.59B | 41.00 | 9.96% | 0.81% | 12.71% | 37.49% | |
69 Neutral | $9.59B | -711.03 | -1.57% | ― | 22.77% | 79.17% | |
66 Neutral | $14.37B | 54.80 | 21.21% | ― | 21.32% | 19.06% | |
65 Neutral | $6.53B | 139.77 | 7.68% | ― | 10.70% | -62.92% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
59 Neutral | $12.00B | -369.03 | -5.93% | ― | 14.22% | 81.01% |
* Technology Sector Average
ONTO
Onto Innovation
317.02
215.26
211.54%
AMKR
Amkor
72.16
50.49
232.93%
CAMT
Camtek
145.36
55.96
62.60%
NVMI
Nova
473.99
189.83
66.80%
SMTC
Semtech
137.50
89.40
185.86%
ALGM
Allegro MicroSystems
57.38
20.62
56.09%
Onto Innovation Corporate Events
Business Operations and StrategyStock BuybackPrivate Placements and Financing
Onto Innovation Issues $1.5 Billion Convertible Notes
Positive
May 21, 2026
On May 21, 2026, Onto Innovation issued $1.5 billion of 0.00% Convertible Senior Notes due 2031, including the full $200 million overallotment, in a private Rule 144A offering to qualified institutional buyers. The notes are senior unsecured oblig...
Executive/Board ChangesShareholder Meetings
Onto Innovation Shareholders Back Board, Pay and Auditor
Positive
May 20, 2026
Onto Innovation held its 2026 Annual Meeting on May 20, 2026, at its Wilmington, Massachusetts headquarters, where shareholders elected seven directors, including Stephen D. Kelley and Michael P. Plisinski, to serve until the next annual meeting. ...
Business Operations and StrategyStock BuybackM&A TransactionsPrivate Placements and Financing
Onto Innovation Announces $1.1 Billion Convertible Notes Offering
Positive
May 18, 2026
On May 18, 2026, Onto Innovation Inc. announced plans for a private offering of $1.1 billion in convertible senior notes due June 1, 2031, targeting qualified institutional buyers under Rule 144A, with an option for initial purchasers to buy an ad...
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.