Earnings Beat: Onto Innovation Inc. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models

Shareholders in Onto Innovation Inc. (NYSE:ONTO) had a terrible week, as shares crashed 30% to US$88.50 in the week since its latest quarterly results. Onto Innovation reported US$267m in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of US$1.30 beat expectations, being 6.3% higher than what the analysts expected. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

We've discovered 1 warning sign about Onto Innovation. View them for free.

Following the recent earnings report, the consensus from nine analysts covering Onto Innovation is for revenues of US$1.00b in 2025. This implies a small 2.3% decline in revenue compared to the last 12 months. Statutory earnings per share are expected to shrink 5.6% to US$4.23 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$1.09b and earnings per share (EPS) of US$5.13 in 2025. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a substantial drop in earnings per share numbers.

Check out our latest analysis for Onto Innovation

It'll come as no surprise then, to learn that the analysts have cut their price target 28% to US$151. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Onto Innovation at US$235 per share, while the most bearish prices it at US$110. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Onto Innovation's past performance and to peers in the same industry. We would highlight that revenue is expected to reverse, with a forecast 3.0% annualised decline to the end of 2025. That is a notable change from historical growth of 13% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 16% per year. It's pretty clear that Onto Innovation's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Onto Innovation. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Onto Innovation's future valuation.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Onto Innovation going out to 2027, and you can see them free on our platform here..

Even so, be aware that Onto Innovation is showing 1 warning sign in our investment analysis , you should know about...

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.