Start here if you're new
what it is
Onto sells the tools chipmakers use to find defects before they turn expensive wafers into scrap.
how it gets paid
Last year Onto Innovation made $1.0B in revenue. defect inspection was the main engine at $0.35B, or 35% of sales.
why it's growing
Revenue grew 1.8% last year. The miss was tiny at 0.79%, but it landed on a stock already priced for strong growth.
what just happened
Latest quarter EPS came in at $1.26, a hair below the $1.27 consensus.
At a glance
B++ balance sheet — above average — nothing keeping you up at night
60/100 earnings predictability — reasonably predictable
38.8x trailing p/e — you're paying up for this one
15.5% return on capital — nothing to write home about
xvary composite: 68/100 — average
What they do
Onto sells the tools chipmakers use to find defects before they turn expensive wafers into scrap.
Metrology and inspection tools sit right where chip yields live or die. If your customer misses a defect, a wafer run can burn millions before anyone notices. Onto stays in the process because its systems feed the measurements engineers use every day, and that stickiness helps support a 50.9% gross margin.
How they make money
$1.0B
annual revenue · their business grew +1.8% last year
defect inspection
$0.35B
+2.0%
metrology systems
$0.30B
+2.0%
lithography systems
$0.15B
+1.0%
process control software
$0.10B
+4.0%
services and support
$0.10B
+1.0%
The products that matter
inspection and process-control tools
Semiconductor Process Control
$1.0B revenue · 100% of sales shown here
it's the entire $1.0B business in this snapshot, and a 28.2% net profit margin tells you this is not commodity hardware. the problem is concentration: if demand slows here, there is nowhere else for the revenue base to hide.
100% of revenue
Key numbers
38.8x
trailing p/e
P/E means price versus past earnings, so you see how expensive the stock already is. Here, you are paying a premium before the next growth leg is fully earned.
$8.25
fy2027 eps
EPS means profit per share, so you see the earnings power the market expects. Getting from $4.94 in FY2025 to $8.25 in FY2027 is the climb you are underwriting.
50.9%
gross margin
Gross margin means money left after making the product, so you can see pricing power. Above 50% says these tools are not being sold like generic hardware.
15.5%
return on capital
Return on capital means profit from the cash tied up in the business, so you see whether growth is actually productive.
Financial health
B++
strength
- balance sheet grade B++ — above average financial health
- risk rank 3 — safer than 50% of stocks
- price stability 15 / 100
- net profit margin 31.0% — keeps 31 cents of every dollar in revenue
- return on equity 16% — $0.16 profit for every $1 investors have put in
B++ — functional but not a standout on the balance sheet.
Total return vs. market
You invested $10,000 in ONTO 3 years ago → it's now worth $23,040.
The index would have given you $14,540.
source: institutional data · total return
What just happened
missed estimates
Latest quarter EPS came in at $1.26, a hair below the $1.27 consensus.
The miss was tiny at 0.79%, but it landed on a stock already priced for strong growth. Full-year 2025 EPS was $4.94 versus $5.34 in 2024, even with annual revenue around $1.0B.
$266.9M
revenue
$1.26
eps
54.6%
gross margin
the number that mattered
The key number was the $1.26 EPS result, because even a one-cent miss matters when the stock trades at 38.8 times trailing earnings.
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onto innovation stock remains highly volatile.onto’s front-end inspection equipment plays a critical role in the process controls of advanced semiconductor manufacturing needed to run ai. in addition to the high-performance chip arena, which is doing well, onto also does significant business in industrial end markets that have been slow to recover from a cyclical downturn.
-
thus, there have been cross winds in the operation.
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another significant challenge has been the u.s.-china trade war.
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semicap companies face restrictions on what can be sold in china.
-
onto’s sales there were traditionally under 10% of its consolidated top line, but larger rivals may compete more intensely now that they are largely cut off from what was a lucrative market.
source: company earnings report, 2026
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What could go wrong
the #1 risk is semiconductor capex slowing after a strong demand burst.
med
wafer-fab spending cools
ONTO is tied to chip manufacturing budgets. If customers pull back on inspection and process-control spending, the same cycle that helped drive 36.1% growth can reverse just as quickly.
With 100% of the revenue shown here coming from one semiconductor tools business, this pressure would hit the full $1.0B base.
med
industrial markets stay slow
The company has significant business in industrial end markets that are still recovering more slowly than AI-linked demand. That mix can mute the upside even if one part of the market stays hot.
The result is simple: good AI demand can still coexist with uneven company-level growth.
med
trade restrictions tighten
China exposure is described here as historically under 10% of revenue. That's not the whole business, but it is large enough to matter if export rules get tighter.
A harder trade backdrop would directly pressure a visible slice of sales while also making demand less predictable.
A slowdown in semiconductor equipment demand would pressure the same $1.0B revenue base investors are currently valuing at 38.8x trailing earnings.
source: institutional data · regulatory filings · risk analysis
Pay attention to
metric
revenue growth after the 36.1% jump
Last year's growth is the number the stock is leaning on. If the next few quarters normalize sharply, the multiple will notice.
calendar
the next earnings report
You want to see whether Q4's $1.26 EPS was the start of another leg up or just a good quarter inside a noisy cycle.
trend
AI demand versus industrial drag
One side of the business is benefiting from advanced-chip spending. The other is tied to slower-recovering industrial markets. The gap matters.
risk
china and export-rule updates
China has historically been under 10% of revenue here. Small enough to survive, large enough that tighter rules would still leave a mark.
Analyst rankings
short-term outlook
top 20%
momentum score 2 — analysts expect above-average price performance in the year ahead. in human-speak, they still like the setup.
risk profile
average
stability score 3 — the business risk looks manageable, but this is not a low-drama stock.
chart momentum
top 20%
technical score 2 — the tape has been better than average even if the 52-week range says the ride can get messy.
earnings predictability
60 / 100
Earnings are reasonably trackable, but not smooth. Expect the cycle to show up in the numbers.
source: institutional data
Institutional activity
institutions have been net buying for 2 consecutive quarters — 188 buyers vs. 165 sellers in 4q2025. total institutional holdings: 48.7M shares. net buying for 2 quarters.
source: institutional data
Price targets
3-5 year target range
$110
$320
$192
current price
$215
target midpoint · +12% from current · 3-5yr high: $320 (+65% · 14% ann'l return)
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