Onto Innovation Inc. (NYSE:ONTO) Poised For Near-Term Consolidation Before Upside

Onto Innovation enters the coming weeks with solid liquidity and stretched valuation metrics while technical momentum shows a short-term rollover; expect price consolidation under heightened volatility as fundamentals anchor longer-term fair value.

Recent News

On March 16 the company announced the launch of the Dragonfly G5 inspection system, highlighting a new product aimed at advanced inspection applications. The company also disclosed senior management participation at the Morgan Stanley Technology, Media & Telecom conference on March 3, where leadership outlined corporate strategy and market positioning.

Technical Analysis

Directional indicators: ADX at 26.38 indicates a strong directional move in place; DI+ shows a peak-and-reversal while DI- shows a dip-and-reversal, a combination that reads as bearish directional pressure for the near term and implies momentum has shifted away from the recent advance.

MACD: MACD stands at 12.41 below its signal line at 16.09 with a recorded peak-and-reversal, which signals bearish momentum and suggests downside pressure until MACD begins a sustained recovery or crosses back above the signal line.

MRO: The Momentum/Regression Oscillator sits at 12.95 and registered a peak-and-reversal; the positive MRO indicates price currently trades above the model target and therefore carries increased likelihood of a corrective pullback.

RSI and moving averages: RSI at 59.36 with a peak-and-reversal shows waning upside momentum. Price closed at $277.94, beneath the 20-day average ($291.15) but above the 50-day ($242.07) and 200-day ($172.64) averages; this pattern implies short-term consolidation with longer-term support intact. High short-term volatility and elevated betas (42-day 2.45, 52-week 2.57) increase the range risk during the consolidation phase.

 


Fundamental Analysis

Profitability and margins: Operating (EBIT) margin equals 13.264%, up 69.681% quarter-over-quarter but down 43.989% year-over-year. The company’s EBIT margin sits below the industry peer mean of 35.788% and below the industry peer median of 36.020%, indicating lower operating profitability versus peers despite recent QoQ improvement.

Revenue and earnings growth: Revenue growth measures 9.40% on the primary growth metric; the reported revenue growth year-over-year value reads 829.67% in the supplied data. Reported earnings growth shows a decline year-over-year of 76.521% and a QoQ decline of 65.641%, pointing to material variability in reported profitability despite positive top-line movement on the primary growth metric.

Liquidity and cash flow: Cash and short-term investments total $654,164,000 with a cash ratio of 3.05 and a current ratio of 6.15, reflecting substantial near-term liquidity. Operating cash flow registers $26,322,000 while free cash flow equals $22,737,000 and free cash flow yield stands at 0.193%.

Capital structure and coverage: Interest coverage approximates 12.23, indicating ample ability to service interest expense; cost of debt sits at 17.811% in the provided figures. Total equity registers $2,132,188,000 and market capitalization equals $11,764,678,918.

Valuation context: Price/earnings at 166.55 sits slightly above the industry peer mean of 162.40 but near the industry peer median of 158.47; price/book at 5.52 remains well below the industry peer mean of 23.30. Forward P/E equals 82.46, below the industry peer mean forward P/E of 108.42. The current valuation, as determined by WMDST, registers as fair-valued.

MOST-RECENT QUARTERLY REPORT
REPORT PERIOD ENDING: 2026-03-31
REPORT DATE: 2026-05-05
NEXT REPORT DATE: 2026-08-04
CASH FLOW  Begin Period Cash Flow 346.1 M
 Operating Cash Flow 26.3 M
 Capital Expenditures -3.58 M
 Change In Working Capital -41.57 M
 Dividends Paid
 Cash Flow Delta -93.87 M
 End Period Cash Flow 252.2 M
 
INCOME STATEMENT REVENUE
 Total Revenue 291.9 M
 Forward Revenue 255.5 M
COSTS
 Cost Of Revenue 145.6 M
 Depreciation 5.8 M
 Depreciation and Amortization 25.5 M
 Research and Development 35.1 M
 Total Operating Expenses 253.2 M
PROFITABILITY
 Gross Profit 146.4 M
 EBITDA 64.2 M
 EBIT 38.7 M
 Operating Income 38.7 M
 Interest Income 5.1 M
 Interest Expense
 Net Interest Income 5.1 M
 Income Before Tax 38.1 M
 Tax Provision 4.3 M
 Tax Rate 11.306 %
 Net Income 33.8 M
 Net Income From Continuing Operations 33.8 M
EARNINGS
 EPS Estimate 1.42
 EPS Actual 1.42
 EPS Difference 0.00
 EPS Surprise 0.35 %
 Forward EPS 2.37
 
BALANCE SHEET ASSETS
 Total Assets 2.4 B
 Intangible Assets 921.9 M
 Net Tangible Assets 1.2 B
 Total Current Assets 1.3 B
 Cash and Short-Term Investments 654.2 M
 Cash 252.2 M
 Net Receivables 306.6 M
 Inventory 316.0 M
 Long-Term Investments 26.5 M
LIABILITIES
 Accounts Payable 105.5 M
 Short-Term Debt
 Total Current Liabilities 214.4 M
 Net Debt
 Total Debt
 Total Liabilities 264.2 M
EQUITY
 Total Equity 2.1 B
 Retained Earnings 777.5 M
VALUATION & PER-SHARE METRICS EQUITY & PER-SHARE METRICS
 Book Value Per-Share 42.86
 Shares Outstanding 49.744 M
 Revenue Per-Share 5.87
VALUATION
 Market Capitalization 11.8 B
 Enterprise Value
 Enterprise Multiple
Enterprise Multiple QoQ
Enterprise Multiple YoY
Enterprise Multiple IPRWA
 EV/R
CAPITAL STRUCTURE
 Asset To Equity 1.124
 Asset To Liability 9.071
 Debt To Capital
 Debt To Assets
Debt To Assets QoQ
Debt To Assets YoY
Debt To Assets IPRWA
 Debt To Equity
Debt To Equity QoQ
Debt To Equity YoY
Debt To Equity IPRWA
PRICE-BASED VALUATION
 Price To Book (P/B) 5.518
Price To Book QoQ 27.038 %
Price To Book YoY 58.716 %
Price To Book IPRWA high: 35.362
median: 24.79
mean: 23.302
ONTO: 5.518
low: 1.593
 Price To Earnings (P/E) 166.554
Price To Earnings QoQ 14.321 %
Price To Earnings YoY 84.046 %
Price To Earnings IPRWA high: 338.258
ONTO: 166.554
mean: 162.398
median: 158.471
low: 54.445
 PE/G Ratio 13.117
 Price To Sales (P/S) 40.297
Price To Sales QoQ 17.867 %
Price To Sales YoY 60.988 %
Price To Sales IPRWA high: 101.704
median: 58.9
mean: 50.287
ONTO: 40.297
low: 7.693
FORWARD MULTIPLES
Forward P/E 82.462
Forward PE/G 6.494
Forward P/S 46.054
EFFICIENCY OPERATIONAL
 Operating Leverage 9.11
ASSET & SALES
 Asset Turnover Ratio 0.123
Asset Turnover Ratio QoQ 4.582 %
Asset Turnover Ratio YoY -2.722 %
Asset Turnover Ratio IPRWA high: 0.298
mean: 0.208
median: 0.19
ONTO: 0.123
low: 0.067
 Receivables Turnover 1.015
Receivables Turnover Ratio QoQ 0.585 %
Receivables Turnover Ratio YoY 14.115 %
Receivables Turnover Ratio IPRWA high: 2.361
mean: 1.822
median: 1.56
ONTO: 1.015
low: 0.934
 Inventory Turnover 0.474
Inventory Turnover Ratio QoQ -7.647 %
Inventory Turnover Ratio YoY 11.327 %
Inventory Turnover Ratio IPRWA high: 3.101
mean: 0.559
ONTO: 0.474
median: 0.395
low: 0.148
 Days Sales Outstanding (DSO) 89.937
CASH CYCLE
 Cash Conversion Cycle Days (CCC) 217.839
Cash Conversion Cycle Days QoQ -15.846 %
Cash Conversion Cycle Days YoY -17.789 %
Cash Conversion Cycle Days IPRWA high: 584.091
median: 265.721
ONTO: 217.839
mean: 216.082
low: 48.011
CAPITAL DEPLOYMENT
 Cash Conversion Ratio 0.264
 CapEx To Revenue -0.012
 CapEx To Depreciation -0.62
 
CAPITAL, LIQUIDITY & COVERAGE CAPITAL STRUCTURE
 Total Capital 2.1 B
 Net Invested Capital 2.1 B
 Invested Capital 2.1 B
 Net Tangible Assets 1.2 B
 Net Working Capital 1.1 B
LIQUIDITY
 Cash Ratio 3.05
 Current Ratio 6.154
Current Ratio QoQ 6.259 %
Current Ratio YoY -26.922 %
Current Ratio IPRWA high: 10.97
ONTO: 6.154
median: 2.536
mean: 2.232
low: 1.36
 Quick Ratio 4.68
Quick Ratio QoQ 5.669 %
Quick Ratio YoY -30.598 %
Quick Ratio IPRWA high: 6.997
ONTO: 4.68
median: 1.773
mean: 1.519
low: 0.782
COVERAGE & LEVERAGE
 Debt To EBITDA
 Cost Of Debt 17.811 %
 Interest Coverage Ratio 12.227
Interest Coverage Ratio QoQ 85.624 %
Interest Coverage Ratio YoY -38.665 %
Interest Coverage Ratio IPRWA high: 148.787
mean: 41.931
median: 34.739
ONTO: 12.227
low: -422.9
 Operating Cash Flow Ratio 0.008
TIMING / LIQUIDITY
 Days Payables Outstanding (DPO) 67.99
DIVIDENDS
 Dividend Coverage Ratio
 Dividend Payout Ratio
 Dividend Rate
 Dividend Yield
PERFORMANCE GROWTH
 Asset Growth Rate 1.209 %
 Revenue Growth 9.399 %
Revenue Growth QoQ -57.865 %
Revenue Growth YoY 829.674 %
Revenue Growth IPRWA high: 18.384 %
ONTO: 9.399 %
median: 3.118 %
mean: -0.195 %
low: -17.762 %
 Earnings Growth 12.698 %
Earnings Growth QoQ -65.641 %
Earnings Growth YoY -76.521 %
Earnings Growth IPRWA high: 42.222 %
ONTO: 12.698 %
median: 6.215 %
mean: 6.135 %
low: -106.667 %
MARGINS
 Gross Margin 50.142 %
Gross Margin QoQ 8.095 %
Gross Margin YoY -6.667 %
Gross Margin IPRWA high: 74.6 %
median: 52.983 %
mean: 52.624 %
ONTO: 50.142 %
low: 14.188 %
 EBIT Margin 13.264 %
EBIT Margin QoQ 69.681 %
EBIT Margin YoY -43.989 %
EBIT Margin IPRWA high: 43.548 %
median: 36.02 %
mean: 35.788 %
ONTO: 13.264 %
low: -41.006 %
 Return On Sales (ROS) 13.264 %
Return On Sales QoQ 69.681 %
Return On Sales YoY -43.989 %
Return On Sales IPRWA high: 41.215 %
median: 36.02 %
mean: 34.683 %
ONTO: 13.264 %
low: -41.006 %
CASH FLOW
 Free Cash Flow (FCF) 22.7 M
 Free Cash Flow Yield 0.193 %
Free Cash Flow Yield QoQ -80.406 %
Free Cash Flow Yield YoY -84.622 %
Free Cash Flow Yield IPRWA high: 2.571 %
median: 0.284 %
ONTO: 0.193 %
mean: 0.02 %
low: -0.614 %
 Free Cash Growth -74.699 %
Free Cash Growth QoQ -880.472 %
Free Cash Growth YoY -218.536 %
Free Cash Growth IPRWA high: 145.87 %
median: -50.693 %
mean: -73.049 %
ONTO: -74.699 %
low: -137.438 %
 Free Cash To Net Income 0.674
 Cash Flow Margin 0.574 %
 Cash Flow To Earnings 0.05
VALUE & RETURNS
 Economic Value Added
 Return On Assets (ROA) 1.417 %
Return On Assets QoQ 206.71 %
Return On Assets YoY -53.219 %
Return On Assets IPRWA high: 9.258 %
mean: 6.426 %
median: 5.59 %
ONTO: 1.417 %
low: -2.095 %
 Return On Capital Employed (ROCE) 1.775 %
 Return On Equity (ROE) 0.016
Return On Equity QoQ 215.968 %
Return On Equity YoY -52.591 %
Return On Equity IPRWA high: 0.206
mean: 0.141
median: 0.132
ONTO: 0.016
low: -0.023
 DuPont ROE 1.595 %
 Return On Invested Capital (ROIC) 1.611 %
Return On Invested Capital QoQ 170.302 %
Return On Invested Capital YoY -44.961 %
Return On Invested Capital IPRWA high: 12.991 %
median: 10.759 %
mean: 10.157 %
ONTO: 1.611 %
low: -2.441 %

Six-Week Outlook

Expect a consolidation phase under elevated volatility driven by bearish short-term momentum signals (DI+/DI- reversal, MACD below signal, MRO positive) while structural support from the 50- and 200-day averages and strong liquidity temper downside extremes. Watch momentum indicators for a decisive MACD turn or DI+ recovery to signal resumption of uphill bias; absent such technical recovery, price action likely remains range-bound with higher intraday swings given the elevated betas. Fundamental backdrop—robust cash reserves, modest free cash flow yield, and a fair-valued WMDST appraisal—supports resilience through consolidation but does not negate the current technical risk of a corrective phase.

About Onto Innovation Inc.

Onto Innovation Inc. (NYSE:ONTO) designs, develops, and manufactures advanced process control tools essential for the semiconductor industry. The company provides optical metrology solutions, lithography systems, and process control analytical software that enable precise measurement and inspection. Onto Innovation’s offerings include standalone systems for optical metrology, macro-defect inspection, and packaging lithography, as well as tools for measuring transparent and opaque thin films. In addition to hardware, Onto Innovation delivers a comprehensive process control software portfolio. This includes solutions tailored for individual tools, tool groups, and extensive enterprise or factory-wide applications. The company also supports its products with systems software, spare parts, and other services, alongside software licensing options. Onto Innovation serves a diverse range of sectors, including semiconductor and advanced packaging device manufacturers, silicon wafer production, LED, and vertical-cavity surface-emitting laser industries. Its technology also finds applications in micro-electromechanical systems, CMOS image sensors, power devices, analog devices, RF filters, data storage, and various industrial and scientific fields. Headquartered in Wilmington, Massachusetts, Onto Innovation continues to play a critical role in advancing technology across multiple industries.



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