Industry Overview - The AICS market is rapidly evolving, with challenges in organic substrate redistribution layers (RDLs) using copper clad laminate (CCL) below 3µm, leading manufacturers to adopt glass as a more stable substrate [1] - The AICS market is projected to grow at a compound annual growth rate (CAGR) of 10% from 2023 to 2028 [7] Company Developments - Onto Innovation (ONTO) has launched a glass substrate suite that includes the JetStep X500 panel-level packaging lithography system and the Firefly G3 sub-micron automatic metrology and inspection system, aimed at meeting the demands of the advanced IC substrates market [7] - The Firefly G3 system utilizes Onto's patented Clearfield technology and unique 3D metrology sensors to address critical challenges such as cracks, chips, and TGV metrology for vias [5] - The company is experiencing strong demand across various end markets and has accelerated the adoption of its Dragonfly platforms, with a new sub-surface inspection capability launched in April 2024 [6] Financial Performance - Onto Innovation has a Zacks Rank 1 (Strong Buy) and its stock has increased by 119% over the past year, outperforming the industry growth of 103.6% [3] - The company has delivered a trailing four-quarter average earnings surprise of 7.54% and has a long-term growth expectation of 9.47% [4]

When it comes to the manufacturing of advanced semiconductors used in artificial intelligence (AI) systems, there is a little-known segment of the industry that acts as the gatekeeper: metrology equipment. A key to making more advanced chips Thus, think of metrology equipment as a type of final step in building AI systems, a type of gatekeeper to unlocking more powerful computing. Can the Onto party continue? Management is forecasting another step-up in revenue and profitability in Q2, with the high end of ...

Core Viewpoint - Onto Innovation (ONTO) has been upgraded to a Zacks Rank 1 (Strong Buy), indicating a positive trend in earnings estimates which is a significant factor influencing stock prices [1][4][9] Earnings Estimate Revisions - The Zacks Rank upgrade reflects an improvement in Onto Innovation's underlying business, suggesting that investors may respond positively, leading to a potential increase in stock price [4][9] - Over the past three months, the Zacks Consensus Estimate for Onto Innovation has increased by 7.5% [12] - The expected earnings per share for the fiscal year ending December 2024 is projected to be $5.05, representing a year-over-year increase of 35.4% [13] Zacks Rating System - The Zacks rating system is based solely on a company's changing earnings picture, with the Zacks Consensus Estimate tracking EPS estimates from sell-side analysts [8] - Stocks rated Zacks Rank 1 are in the top 5% of Zacks-covered stocks in terms of estimate revisions, indicating a strong potential for price movement [7][14] - The Zacks Rank system has a proven track record, with Zacks Rank 1 stocks generating an average annual return of +25% since 1988 [11]

Industry Overview - The Nanotechnology industry is part of the Computer and Technology sector, currently holding a Zacks Industry Rank of 97, which places it in the top 39% of over 250 industries [1] Company Performance - Onto Innovation is forecasted to report an EPS of $1.19, reflecting a 50.63% increase from the same quarter last year, with revenue expected to be $235.6 million, indicating a 23.57% year-over-year increase [2] - For the entire year, Zacks Consensus Estimates predict earnings of $5.05 per share and revenue of $941.16 million, representing increases of +35.39% and +15.36% compared to the previous year [3] Analyst Sentiment - Recent adjustments to analyst estimates for Onto Innovation indicate a favorable outlook on the company's business health and profitability, with positive revisions suggesting a strong near-term business trend [4] - The Zacks Rank system, which has a strong track record of outperformance, currently rates Onto Innovation as 2 (Buy) [7] Valuation Metrics - Onto Innovation has a Forward P/E ratio of 44.27, which is a premium compared to the industry's average Forward P/E of 33.41 [6] Stock Performance - The most recent trading session saw Onto Innovation's stock at $219.45, down 1.85% from the previous day's close, underperforming the S&P 500, which had a daily loss of 0.04% [9] - Over the past month, Onto Innovation's shares have decreased by 0.17%, which is better than the Computer and Technology sector's loss of 2.27% and lagging behind the S&P 500's gain of 4.15% [10]

When deciding whether to buy, sell, or hold a stock, investors often rely on analyst recommendations. Media reports about rating changes by these brokerage-firm-employed (or sell-side) analysts often influence a stock's price, but are they really important? Onto Innovation currently has an average brokerage recommendation (ABR) of 1.33, on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated based on the actual recommendations (Buy, Hold, Sell, etc.) made by six brokerage firms. An ABR of 1.33 approxim ...

The stock is trading 4.5% below its 52-week high of $238.13, suggesting further upside potential. With healthy fundamentals and strong growth opportunities, this Zacks Rank #1 (Strong Buy) stock appears to be a solid investment option at the moment. Apart from a favorable rank, ONTO has a Growth Score of B. Per Zacks' proprietary methodology, stocks with a combination of a Zacks Rank #1 or 2 (Buy) and a Growth Score of A or B offer solid investment opportunities. Factors Driving Growth Onto Innovation's per ...

The five-grade Zacks Rank system, which ranges from a Zacks Rank #1 (Strong Buy) to a Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record of outperformance, with Zacks #1 Ranked stocks generating an average annual return of +25% since 2008. Onto Innovation (ONTO) appears an attractive pick given a noticeable improvement in the company's earnings outlook. The stock has been a strong performer lately, and the momentum might continue with analysts still raising their earnings estimat ...

Onto Innovation Inc (ONTO) reported first-quarter 2024 earnings of $1.18 per share, which beat the Zacks Consensus Estimate by 7.3%. The bottom line increased 28.3% year over year.Revenues of $228.8 million beat the Zacks Consensus Estimate by 2.9%. The top line increased 14.9% year over year. The uptick can be mainly attributed to customer capacity expansions for high-performance computing and high bandwidth memory supporting AI market growth.Revenues also came in within the company’s guided range of $215- ...

Onto Innovation (ONTO) came out with quarterly earnings of $1.18 per share, beating the Zacks Consensus Estimate of $1.10 per share. This compares to earnings of $0.92 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 7.27%. A quarter ago, it was expected that this maker of semiconductor manufacturing equipment would post earnings of $0.99 per share when it actually produced earnings of $1.06, delivering a surprise of 7.07%.Over ...

Revenue Performance - Revenue for Q1 2024 reached $229 million, driven by customer capacity expansions for high-performance computing (HPC) and high bandwidth memory (HBM) supporting AI market growth[6] - Revenue from specialty and advanced packaging customers set a quarterly record of $161 million[6] - Revenue for the three months ended March 30, 2024, was $228.846 million, a 15% increase from $199.165 million for the same period in 2023[27] Profitability Metrics - GAAP gross margin was 52%, while non-GAAP gross margin also stood at 52%[8] - GAAP operating income was $43 million, with GAAP net income of $47 million, reflecting a significant increase compared to previous quarters[6] - Non-GAAP operating income was $57 million, and non-GAAP net income was $58 million, indicating strong operational performance[6] - Gross profit increased to $118.285 million, compared to $104.975 million in the prior year, resulting in a gross margin of 52%[29] - Operating income rose to $42.738 million, up from $29.035 million, reflecting a significant improvement in operational efficiency[27] - Net income for the period was $46.853 million, compared to $29.068 million in the previous year, marking a 61% increase[27] - Non-GAAP net income was reported at $58.452 million, up from $45.047 million, with non-GAAP net income per diluted share increasing to $1.18 from $0.92[32] Cash Flow and Expenses - Cash from operations amounted to $57 million, representing 25% of total revenue[6] - Operating expenses totaled $75.547 million, slightly down from $75.940 million, indicating effective cost management[30] - The company maintained an operating margin of 25% for both GAAP and non-GAAP measures[30] - Interest income increased significantly to $7.361 million from $3.448 million, reflecting improved financial performance[27] Future Outlook - The company expects Q2 2024 revenue to be in the range of $230 to $240 million, with GAAP diluted earnings per share projected between $0.88 and $1.00[11] - The company anticipates a stronger demand for advanced memory and new chiplet architectures, setting the stage for a robust 2025[5] - Future guidance estimates GAAP net income per diluted share between $0.88 and $1.00 for the next quarter[34] Product Development - Shipments of the Dragonfly® G3 inspection system increased over 30% compared to the prior quarter, highlighting strong demand in AI packaging[6] - New capabilities for the Dragonfly G3 inspection system enable 100% wafer inspection for critical sub-surface defects, enhancing product offerings[6] - The company continues to invest in research and development, with R&D expenses at $26.554 million, slightly down from $27.242 million[27]