Onto Innovation Inc. (ONTO) stock analysis

P/E above its 5-year median

Onto Innovation's P/E of 70.7 is above its own 5-year median of 38.5.

P/E above the industry

Onto Innovation's P/E of 70.7 is above the Laboratory Apparatus and Analytical, Optical, Measuring, and Controlling Instruments median of 36.5.

EV/EBITDA below its 5-year median

Onto Innovation's EV/EBITDA of 45.1 is below its 5-year median of 49.0.

P/B above the industry

Onto Innovation's price-to-book of 5.33 is above the Laboratory Apparatus and Analytical, Optical, Measuring, and Controlling Instruments median of 3.17.

Trading above fair value

The share price of $215.06 is above our fair value estimate of $132.21.

Margin of safety under 20%

The price is 62.7% above fair value, so there is no margin of safety.

Revenue growing under 10% a year

Revenue grew 0.0% a year over the last three fiscal years, short of the 10% we look for.

EPS growing under 10% a year

Diluted EPS grew -14.8% a year over the last three fiscal years.

Earnings growth not accelerating

Net income grew -13.6% over the last twelve months, against a 5-year average of 34.5% a year.

Growing faster than the industry

Revenue grew 30.9% over the last twelve months; the Laboratory Apparatus and Analytical, Optical, Measuring, and Controlling Instruments median is 8.4%.

Guidance issued

The latest outlook (third quarter ending September 30, 2026 Revenue, Aug 6, 2026) was issued for the first time, so it neither adds nor takes away points.

Gross margin improving

Gross margin was 51.7% over the last twelve months, against 50.7% a year earlier.

Return on equity under 15%

Return on equity was 7.6% over the last twelve months and averaged 10.1% over five years; we look for 15% on both.

Return on capital over 10%

Return on invested capital was 18.7%, above the 10% that usually covers the cost of capital.

Return on equity above the industry

Onto Innovation's return on equity of 7.6% is above the Laboratory Apparatus and Analytical, Optical, Measuring, and Controlling Instruments median of 1.1%.

Earnings grew over 5 years

Net income grew 34.5% a year on average over the last five fiscal years.

Net margin below its 5-year average

Net margin was 11.5% over the last twelve months, against a 5-year average of 17.8%.

Net margin above the industry

Onto Innovation's net margin of 11.5% is above the Laboratory Apparatus and Analytical, Optical, Measuring, and Controlling Instruments median of -1.3%.

No debt

Onto Innovation has no borrowings on its latest balance sheet.

Debt not rising

With no debt today, leverage cannot have risen.

Debt covered by cash flow

There is no debt to cover.

Interest well covered

No meaningful interest expense to cover.

Short-term assets cover short-term debts

Current assets are 6.78 times current liabilities.

Low bankruptcy risk

The Altman Z-score is 4.89; above 3 is the safe zone and below 1.8 the distress zone.

No dividend

Onto Innovation has not paid a dividend in the last twelve months.

Yield against Treasuries

No dividend.

Yield against the market

No dividend.

Dividend stability

No dividend.

Earnings cover

No dividend.

Cash-flow cover

No dividend.