NYSE:ONTO

Stock Analysis Report

Executive Summary

Onto Innovation Inc. provides process control metrology and inspection systems for use primarily in the fabrication of semiconductors and other solid-state devices, and industrial and scientific applications worldwide.

Rewards

PE ratio (25.7x) is below the Semiconductor industry average (34.5x)

Earnings are forecast to grow 69.22% per year

Risk Analysis

Profit margins (10.6%) are lower than last year (16.5%)



Snowflake Analysis

Flawless balance sheet with high growth potential.

Share Price & News

How has Onto Innovation's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: ONTO has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-9.6%

ONTO

-1.0%

US Semiconductor

0.06%

US Market


1 Year Return

-2.6%

ONTO

38.8%

US Semiconductor

19.4%

US Market

Return vs Industry: ONTO underperformed the US Semiconductor industry which returned 48.5% over the past year.

Return vs Market: ONTO underperformed the US Market which returned 24.7% over the past year.


Shareholder returns

ONTOIndustryMarket
7 Day-9.6%-1.0%0.06%
30 Day-1.4%3.1%1.1%
90 Day4.4%14.9%8.9%
1 Year-2.6%-2.6%41.4%38.8%21.9%19.4%
3 Year52.2%52.2%91.3%81.0%48.9%39.3%
5 Year126.0%126.0%154.4%130.0%71.9%53.1%

Price Volatility Vs. Market

How volatile is Onto Innovation's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Onto Innovation undervalued compared to its fair value and its price relative to the market?

25.74x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: ONTO ($32.2) is trading above our estimate of fair value ($8.54)

Significantly Below Fair Value: ONTO is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: ONTO is good value based on its PE Ratio (25.7x) compared to the Semiconductor industry average (34.5x).

PE vs Market: ONTO is poor value based on its PE Ratio (25.7x) compared to the US market (18.9x).


Price to Earnings Growth Ratio

PEG Ratio: ONTO is good value based on its PEG Ratio (0.4x)


Price to Book Ratio

PB vs Industry: ONTO is good value based on its PB Ratio (2.4x) compared to the US Semiconductor industry average (3.3x).


Next Steps

Future Growth

How is Onto Innovation forecast to perform in the next 1 to 3 years based on estimates from 2 analysts?

69.2%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: ONTO's forecast earnings growth (69.2% per year) is above the savings rate (2.7%).

Earnings vs Market: ONTO's earnings (69.2% per year) are forecast to grow faster than the US market (14.3% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: ONTO's revenue (41.1% per year) is forecast to grow faster than the US market (7.5% per year).

High Growth Revenue: ONTO's revenue (41.1% per year) is forecast to grow faster than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if ONTO's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has Onto Innovation performed over the past 5 years?

55.9%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: ONTO has high quality earnings.

Growing Profit Margin: ONTO's current net profit margins (10.6%) are lower than last year (16.5%).


Past Earnings Growth Analysis

Earnings Trend: ONTO has become profitable over the past 5 years, growing earnings by 55.9% per year.

Accelerating Growth: ONTO's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: ONTO had negative earnings growth (-39.6%) over the past year, making it difficult to compare to the Semiconductor industry average (-15.8%).


Return on Equity

High ROE: ONTO's Return on Equity (9.3%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Onto Innovation's financial position?


Financial Position Analysis

Short Term Liabilities: ONTO's short term assets ($272.2M) exceed its short term liabilities ($51.0M).

Long Term Liabilities: ONTO's short term assets ($272.2M) exceed its long term liabilities ($11.2M).


Debt to Equity History and Analysis

Debt Level: ONTO is debt free.

Reducing Debt: ONTO had no debt 5 years ago.

Debt Coverage: ONTO has no debt, therefore it does not need to be covered by operating cash flow.

Interest Coverage: ONTO has no debt, therefore coverage of interest payments is not a concern.


Balance Sheet

Inventory Level: ONTO has a high level of physical assets or inventory.

Debt Coverage by Assets: Insufficient data to determine if ONTO's debt is covered by short term assets.


Next Steps

Dividend

What is Onto Innovation's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

companyn/amarketbottom25%1.4%markettop25%3.7%industryaverage1.9%forecastin3Yearsn/a

Current dividend yield vs market & industry

Notable Dividend: Unable to evaluate ONTO's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate ONTO's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if ONTO's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if ONTO's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of ONTO's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

1.8yrs

Average management tenure


CEO

Pierre-Yves Lesaicherre (56yo)

1.8yrs

Tenure

US$2,936,885

Compensation

Dr. Pierre-Yves Lesaicherre, Ph.D., has been President, Chief Executive Officer and Director of Nanometrics Incorporated since November 27, 2017. Dr. Lesaicherre served as the Chief Executive Officer of Lu ...


CEO Compensation Analysis

Compensation vs Market: Pierre-Yves's total compensation ($USD2.94M) is about average for companies of similar size in the US market ($USD3.86M).

Compensation vs Earnings: Insufficient data to compare Pierre-Yves's compensation with company performance.


Leadership Team

NamePositionTenureCompensationOwnership
Pierre-Yves Lesaicherre
President1.8yrsUS$2.94m0.12% $1.9m
Greg Swyt
Principal Financial Officer & VP of Finance1.8yrsUS$700.04k0.030% $489.6k
James Barnhart
Senior Vice President of Operations1.6yrsUS$1.63m0.098% $1.6m
Janet Taylor
General Counsel4.3yrsUS$1.05m0.094% $1.5m
Rollin Kocher
Senior Vice President of Sales & Marketing1.8yrsUS$1.31m0.077% $1.2m
Kevin Heidrich
Senior Vice President of Corporate Development1.8yrsUS$527.13k0.078% $1.3m
Rodney Smedt
Senior VP of Research & Development0.3yrsno datano data

1.8yrs

Average Tenure

56yo

Average Age

Experienced Management: ONTO's management team is not considered experienced ( 1.8 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
Pierre-Yves Lesaicherre
President1.8yrsUS$2.94m0.12% $1.9m
Christine Tsingos
Independent Director5.4yrsUS$249.12k0.11% $1.7m
Robert Deuster
Independent Director2.6yrsUS$239.12k0.034% $545.3k
Bruce Rhine
Chairman12.3yrsUS$271.60k2.78% $44.6m
Christopher Seams
Independent Director4.2yrsUS$239.10k0.077% $1.2m
Edward Brown
Independent Director6.6yrsUS$249.08k0.13% $2.2m
Timothy Stultz
Director12.2yrsUS$219.12k0.86% $13.8m

5.4yrs

Average Tenure

61yo

Average Age

Experienced Board: ONTO's board of directors are considered experienced (5.4 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Onto Innovation Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Onto Innovation Inc.
  • Ticker: ONTO
  • Exchange: NYSE
  • Founded: 1975
  • Industry: Semiconductor Equipment
  • Sector: Semiconductors
  • Market Cap: US$1.605b
  • Shares outstanding: 49.85m
  • Website: https://www.ontoinnovation.com

Number of Employees


Location

  • Onto Innovation Inc.
  • 16 Jonspin Road
  • Wilmington
  • Massachusetts
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
ONTONYSE (New York Stock Exchange)YesCommon StockUSUSDNov 1984
NNMDB (Deutsche Boerse AG)YesCommon StockDEEURNov 1984

Biography

Onto Innovation Inc. provides process control metrology and inspection systems for use primarily in the fabrication of semiconductors and other solid-state devices, and industrial and scientific applications worldwide. The company offers automated metrology systems that provide optical critical dimension, thin film metrology, and wafer stress metrology for transistor and interconnect metrology applications; and integrated metrology systems that are installed onto wafer processing equipment to provide near real-time measurements. Its materials characterization products include systems that are used to monitor the physical, optical, electrical, and material characteristics of discrete electronic industry; opto-electronic; high brightness LED; solar photovoltaic; compound semiconductor; strained silicon; and silicon-on-insulator devices, including composition, crystal structure, layer thickness, dopant concentration, contamination, and electron mobility. The company also offers NanoDiffract, a modeling, visualization, and analysis software that takes signals from the metrology systems providing critical dimension, thickness, and optical properties from in line measurements; SpectraProbe, a model-less fitting engine that enables fast time to solution for in-line excursion detection and control; and NanoGen, an enterprise scale computing hardware system that is deployed to run the computing intensive analysis software. Onto Innovation Inc. was founded in 1975 and is headquartered in Wilmington, Massachusetts. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/31 23:39
End of Day Share Price2019/10/31 00:00
Earnings2019/06/29
Annual Earnings2018/12/29


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.