# Onto Innovation (ONTO.US)

Canonical: https://gigainvestors.com/s/ONTO

Analysis as of: 2026-10-16T07:30:55.544Z. Financial observations: FY1996–FY2025.

Listing currency: USD. Reporting currency: USD.

## Verdict

Not a wonderful business

Quality tests for Buy: not passed (profit record: pass; earnings resilience is evidence only). Published buy qualification: no.

Share price: $231.95 per share; close as of 2026-10-15.

Estimated value: low $104.69 per share, central $125.00 per share, high $139.77 per share. Buy at or below the central value $125.00 per share. Valuation as of 2026-10-16T07:30:55.544Z; scenarios are not confidence intervals.

Expected annual return: 6.2% at the stated quote. About 6.2% a year at today's price (required return 10.0%). required return 10.0% a year (10% floor; US 10-year bond 5.1% + 4 points).

## Checklist

### understandable: fail

- 1 revenue decline in the last 10 years (informational)

- operating margin variation exceeds 0.35

- Financial history: 10 years

- Years with declining revenue: 1

- Years with a net loss: 0

- Operating margin variation: 0.50×

Chart: Operating margin; fiscal year observations.

- FY2016: 0.22×

- FY2017: 0.23×

- FY2018: 0.19×

- FY2019: -0.02×

- FY2020: 0.05×

- FY2021: 0.20×

- FY2022: 0.24×

- FY2023: 0.14×

- FY2024: 0.19×

- FY2025: 0.13×

### moat: fail

- ROIC worst years below threshold (more than 1 bad year allowed)

- ROIC, median of available years: 22.6%

- ROIC, second-lowest year: 4.4%

- Typical minus recent gross margin: 2.8 pp

- Typical gross margin (annual median): 52.5%

- Recent gross margin (lower of latest and 3-year median): 49.7%

- Years with nonpositive capital: 0

- Capital spending / revenue: 2.5%

- ROIC including acquisitions, ten-year median: 18.6%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2016: 22.6%

- FY2017: 26.6%

- FY2018: 25.1%

- FY2019: -0.6%

- FY2020: 4.4%

- FY2021: 23.2%

- FY2022: 29.0%

- FY2023: 14.3%

- FY2024: 22.6%

- FY2025: 13.4%

### economics: pass

- Owner earnings / net income, 5-yr: 1.25×

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: $1.0B

- Net income, five-year total: $825M

- Return on incremental invested capital: 133.8%

- Working capital / revenue, annual change: -0.1 pp

- Working capital / revenue, change between three-year averages: 6.8 pp

- Working capital / revenue, final three-year average: 54.0%

Chart: Annual owner cash / profit; fiscal year observations.

- FY2021: 1.38×

- FY2022: 1.21×

- FY2023: 1.37×

- FY2024: 1.15×

- FY2025: 1.23×

### management: fail

- Historical market-dollar context (not the management verdict): 2016 to 2025 (9 years)

- buybacks leaned toward cheaper years (informational)

- ROIC first 3 years vs last 3 years: 25.1% vs 14.3%

- Per-share earnings: 1.27 to 2.78 (three-year endpoint medians)

- acquired goodwill and intangibles (proxy) exceeds half of ten-year net income with low and deteriorating ROIC

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 10-year annual growth: 4.4%

- Ordinary dilution, 5-year annual growth: -0.1%

- Market cap gain: $7.3B

- Cumulative retained earnings: $828M

- Diluted shares, 10-year annual growth: 4.4%

- Diluted shares, 5-year annual growth: -0.1%

- $1 test, starting fiscal year: FY2016

- $1 test, ending fiscal year: FY2025

- Per-share value growth: 10.2%

- Per-share value change: $1.50

- Per-share value, starting three-year median: $1.27

- Per-share value, ending three-year median: $2.78

- Buybacks concentrated in cheaper years (correlation): 0.48

- Average buyback yield: 1.1%

- Buyback history: 10 years

- Debt-funded buybacks: No

- Acquisition spending: $1.2B

- Cumulative net income, 10 years: $973M

- ROIC, first three-year median: 25.1%

- ROIC, last three-year median: 14.3%

Chart: Earnings per share; fiscal year observations.

- FY2016: $1.82

- FY2017: $1.27

- FY2018: $1.74

- FY2019: $0.04

- FY2020: $0.63

- FY2021: $2.86

- FY2022: $4.49

- FY2023: $2.46

- FY2024: $4.06

- FY2025: $2.78

### accounting: pass

- Sloan accruals: -8.1%

- Receivables to sales index (DSRI): 0.86×

- Restructuring years, last five: 0

- Stock compensation / operating cash flow: 8.4%

- Earnings backed by cash: Yes

- Operating cash / earnings: 2.40×

- Accounting red flags: 0

- Goodwill and intangibles / equity: 0.45×

Chart: Sloan accruals; fiscal year observations.

- FY2016: -2.9%

- FY2017: -8.2%

- FY2018: 2.4%

- FY2019: -1.1%

- FY2020: -5.1%

- FY2021: -2.0%

- FY2022: 4.8%

- FY2023: -2.7%

- FY2024: -2.1%

- FY2025: -8.1%

## Holders

- [Matthew McLennan](https://gigainvestors.com/FE): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Lee Ainslie](https://gigainvestors.com/mc): tracked 13F investor; follow the investor page for holding quarter and amounts.

## Price story

Down 39% since Jun 2026 · "Onto Innovation (ONTO) Is Up 19.2% After Record Backlog and Upgraded AI Packaging Outlook" (finance.yahoo.com, Aug 2026) · sales +1.8%

Story as of 2026-10-16T09:59:20.080Z; price observation 2026-10-15.

Price needs cash profits to grow 14.4% a year for ten years

- 2026-02-19: Onto Innovation Misses Q4 Targets But Guides Higher Than Views ([finance.yahoo.com](https://finance.yahoo.com/m/51f12819-9fbc-367f-af21-342146c75955/onto-innovation-misses-q4.html))

- 2026-03-02: Onto Innovation Balances Record Sales With Margin Pressure And Rising Risks ([finance.yahoo.com](https://finance.yahoo.com/news/onto-innovation-balances-record-sales-050706562.html))

- 2026-04-16: Onto Innovation’s Dragonfly® G5 System Qualified for Applications in 2.5D AI Packaging ([finance.yahoo.com](https://finance.yahoo.com/sectors/technology/articles/onto-innovation-dragonfly-g5-system-130000351.html))

- 2026-08-07: Onto Innovation (ONTO) Is Up 19.2% After Record Backlog and Upgraded AI Packaging Outlook ([finance.yahoo.com](https://finance.yahoo.com/technology/ai/articles/onto-innovation-onto-19-2-221421124.html))

- 2026-09-25: Improving Semiconductor Inspection Tool Demand Boosts Onto Innovation (ONTO) ([finance.yahoo.com](https://finance.yahoo.com/technology/articles/improving-semiconductor-inspection-tool-demand-153408124.html))

### Sales · FY2024–2025

sales +1.8%; source https://www.sec.gov/Archives/edgar/data/704532/000119312526066937/onto-20260103.htm; observed 2026-02-24.

- FY2016: $233M 

- FY2017: $255M 

- FY2018: $274M 

- FY2019: $306M 

- FY2020: $556M 

- FY2021: $789M 

- FY2022: $1.0B 

- FY2023: $816M 

- FY2024: $987M 

- FY2025: $1.0B 

### Gross margin · FY2025

gross margin 49.7%; source https://www.sec.gov/Archives/edgar/data/704532/000119312526066937/onto-20260103.htm; observed 2026-02-24.

- FY2016: 53.1% 

- FY2017: 52.8% 

- FY2018: 54.2% 

- FY2019: 44.1% 

- FY2020: 50.0% 

- FY2021: 54.4% 

- FY2022: 53.6% 

- FY2023: 51.5% 

- FY2024: 52.2% 

- FY2025: 49.7% 

## Owner memo

Memo as of 2026-10-16T08:06:05.509Z.

### How it makes money

Operates in semiconductor equipment & materials; annual sales are USD 1 billion.

- Source: https://www.sec.gov/Archives/edgar/data/704532/000119312526066937/onto-20260103.htm (filed 2026-02-24); FY2025: revenue 1005263000; grossProfit 499770000; margin = grossProfit / revenue.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); ONTO.US: Onto Innovation Inc. engages in the design, development, manufacture, and support of process control tools that perform macro-defect inspection and metrology in the United States, Taiwan, South Korea, Japan, China, Southeast Asia, Asia, and Europe. The company offers lithography systems and process control analytical software; and automated and integrated metrology systems, silicon wafer all-surface inspection, macro defect inspection, automated defect classification and pattern analysis, yield analysis, opaque film metrology, 4D business, advanced packaging lithography, process control software, and yield management software products. It also provides process and yield management solutions, and device packaging and test facilities through standalone systems for optical metrology, macro-defect inspection, packaging lithography, and transparent and opaque thin film measurements. In addition, the company offers process control software portfolio that includes solutions for standalone tools, groups of tools, and factory-wide suites. Further, it engages in systems and software, spare parts, and other services, as well as offers software licensing services; and provides advanced product lines, such as FAaST, CnCV, and MBIR. The company's products are used in semiconductor and advanced packaging device manufacturers; silicon wafers; semiconductor integrated circuit fabricators; light emitting diodes; vertical-cavity surface-emitting lasers; micro-electromechanical systems; CMOS image sensors; silicon and compound semiconductor power devices; analog devices; RF filters; data storage; and various industrial and scientific applications. Onto Innovation Inc. was founded in 1940 and is headquartered in Wilmington, Massachusetts.

### Why customers stay

Margins ranged from 49.7% to 52.2% during 2023–25; it earns 22.6% on its capital.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-24); FY2023: grossProfit / revenue = 51.5%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-24); FY2024: grossProfit / revenue = 52.2%.

- Source: https://www.sec.gov/Archives/edgar/data/704532/000119312526066937/onto-20260103.htm (filed 2026-02-24); FY2025: grossProfit / revenue = 49.7%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-24); 10-year return on capital observations [[2016,0.22639268959902278],[2017,0.26561991673788976],[2018,0.25074362914790616],[2019,-0.006102381080025427],[2020,0.04407112306444392],[2021,0.23192762703857192],[2022,0.28989962934675395],[2023,0.14287728153273851],[2024,0.2255946950408275],[2025,0.13372856027183885]]; median 0.22599369231992514. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Where the cash goes

Earns over 100% on new investment; paid no dividends in 10 years.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-24); FY2016: growth capex 0; upkeep 5291000; owner earnings 37658000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-24); FY2017: growth capex 1428800.8572542444; upkeep 9781199.142745756; owner earnings 29057800.857254244. Growth capex / owner earnings = 0.049170990752989.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-24); FY2018: growth capex 1160000; upkeep 6382000; owner earnings 45096000. Growth capex / owner earnings = 0.025722902252971438.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-24); FY2019: growth capex 0; upkeep 6802000; owner earnings 11518000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-24); FY2020: growth capex 0; upkeep 3829000; cash acquisitions 0; owner earnings 94774000. Growth capex plus acquisitions / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-24); FY2021: growth capex 0; upkeep 12039000; cash acquisitions 23795000; owner earnings 196111000. Growth capex plus acquisitions / owner earnings = 0.12133434636506876.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-24); FY2022: growth capex 0; upkeep 18405000; cash acquisitions 4644000; owner earnings 269591000. Growth capex plus acquisitions / owner earnings = 0.01722609434291204.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-24); FY2023: growth capex 0; upkeep 22573000; cash acquisitions 0; owner earnings 165798000. Growth capex plus acquisitions / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-24); FY2024: growth capex 0; upkeep 31903000; cash acquisitions 26761000; owner earnings 232076000. Growth capex plus acquisitions / owner earnings = 0.11531136351884727.

- Source: https://www.sec.gov/Archives/edgar/data/704532/000119312526066937/onto-20260103.htm (filed 2026-02-24); FY2025: growth capex 0; upkeep 28513000; cash acquisitions 436124000; owner earnings 168685000. Growth capex plus acquisitions / owner earnings = 2.585434389542639.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-24); Incremental return on capital 1.3376063440589032, from the economics test's unchanged annual inputs.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-24); Dividend observations: [[2016,0],[2017,0],[2018,0],[2019,0],[2020,0],[2021,0],[2022,0],[2023,0],[2024,0],[2025,0]]. Zero only counted when supported by a complete cash-flow statement.

- Source: https://www.sec.gov/Archives/edgar/data/704532/000119312526066937/onto-20260103.htm (filed 2026-02-24); FY2025: cash repurchases 75015000 USD.

### Are managers owners

Insiders own 0.7% of the company.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); ONTO.US SharesStats.PercentInsiders = 0.658 percentage points; cache date 2026-10-16.

### What the price says

The price assumes cash profits grow 14.4% yearly over ten years; actual growth was 19.8%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-24); Ten-year compound average after fade. Initial solved rate 0.19509430332730038. Price 231.95; FX 1; discount 0.1; same standard ten-year fade to terminal 0.03. FY2015 owner earnings/share 0.5610911925175369 → FY2025 3.423477360826416. Closing-price date 2026-10-15.

## Monthly share-price history (USD per share)

- 2016-10: $20.89 per share

- 2016-11: $23.91 per share

- 2016-12: $25.06 per share

- 2017-01: $25.71 per share

- 2017-02: $27.21 per share

- 2017-03: $30.46 per share

- 2017-04: $31.56 per share

- 2017-05: $27.80 per share

- 2017-06: $25.29 per share

- 2017-07: $26.65 per share

- 2017-08: $25.79 per share

- 2017-09: $28.80 per share

- 2017-10: $28.27 per share

- 2017-11: $25.16 per share

- 2017-12: $24.92 per share

- 2018-01: $24.77 per share

- 2018-02: $26.39 per share

- 2018-03: $26.90 per share

- 2018-04: $24.82 per share

- 2018-05: $41.97 per share

- 2018-06: $35.41 per share

- 2018-07: $37.66 per share

- 2018-08: $43.81 per share

- 2018-09: $37.52 per share

- 2018-10: $32.06 per share

- 2018-11: $32.12 per share

- 2018-12: $27.33 per share

- 2019-01: $30.59 per share

- 2019-02: $28.46 per share

- 2019-03: $30.88 per share

- 2019-04: $29.79 per share

- 2019-05: $28.45 per share

- 2019-06: $34.71 per share

- 2019-07: $31.38 per share

- 2019-08: $27.29 per share

- 2019-09: $32.62 per share

- 2019-10: $32.20 per share

- 2019-11: $33.56 per share

- 2019-12: $36.54 per share

- 2020-01: $37.94 per share

- 2020-02: $30.57 per share

- 2020-03: $29.67 per share

- 2020-04: $32.46 per share

- 2020-05: $31.08 per share

- 2020-06: $34.04 per share

- 2020-07: $37.82 per share

- 2020-08: $31.24 per share

- 2020-09: $29.78 per share

- 2020-10: $32.07 per share

- 2020-11: $44.21 per share

- 2020-12: $47.55 per share

- 2021-01: $54.05 per share

- 2021-02: $62.46 per share

- 2021-03: $65.71 per share

- 2021-04: $68.52 per share

- 2021-05: $71.77 per share

- 2021-06: $73.04 per share

- 2021-07: $70.08 per share

- 2021-08: $74.13 per share

- 2021-09: $72.25 per share

- 2021-10: $79.21 per share

- 2021-11: $94.16 per share

- 2021-12: $101.23 per share

- 2022-01: $91.54 per share

- 2022-02: $86.21 per share

- 2022-03: $86.89 per share

- 2022-04: $71.14 per share

- 2022-05: $80.38 per share

- 2022-06: $69.74 per share

- 2022-07: $83.25 per share

- 2022-08: $70.99 per share

- 2022-09: $64.05 per share

- 2022-10: $66.84 per share

- 2022-11: $79.95 per share

- 2022-12: $68.09 per share

- 2023-01: $78.65 per share

- 2023-02: $82.47 per share

- 2023-03: $87.88 per share

- 2023-04: $80.98 per share

- 2023-05: $107.35 per share

- 2023-06: $116.47 per share

- 2023-07: $124.32 per share

- 2023-08: $138.98 per share

- 2023-09: $127.52 per share

- 2023-10: $112.37 per share

- 2023-11: $141.01 per share

- 2023-12: $152.90 per share

- 2024-01: $161.50 per share

- 2024-02: $184.16 per share

- 2024-03: $181.08 per share

- 2024-04: $185.49 per share

- 2024-05: $216.70 per share

- 2024-06: $219.56 per share

- 2024-07: $191.30 per share

- 2024-08: $213.22 per share

- 2024-09: $207.56 per share

- 2024-10: $198.33 per share

- 2024-11: $164.18 per share

- 2024-12: $166.67 per share

- 2025-01: $204.76 per share

- 2025-02: $145.66 per share

- 2025-03: $121.34 per share

- 2025-04: $121.97 per share

- 2025-05: $91.94 per share

- 2025-06: $100.93 per share

- 2025-07: $94.75 per share

- 2025-08: $106.00 per share

- 2025-09: $129.22 per share

- 2025-10: $134.96 per share

- 2025-11: $143.16 per share

- 2025-12: $157.86 per share

- 2026-01: $202.05 per share

- 2026-02: $215.89 per share

- 2026-03: $205.07 per share

- 2026-04: $295.06 per share

- 2026-05: $258.24 per share

- 2026-06: $378.45 per share

- 2026-07: $258.58 per share

- 2026-08: $267.21 per share

- 2026-09: $307.82 per share

- 2026-10: $231.95 per share

## Annual estimated value (USD per share)

- FY2016: low $16.15 per share, central $17.57 per share, high $19.44 per share

- FY2017: low $16.38 per share, central $19.02 per share, high $21.10 per share

- FY2018: low $22.23 per share, central $27.99 per share, high $31.68 per share

- FY2019: low $14.85 per share, central $17.21 per share, high $19.04 per share

- FY2020: low $27.22 per share, central $29.96 per share, high $33.61 per share

- FY2021: low $40.33 per share, central $46.82 per share, high $52.92 per share

- FY2022: low $54.66 per share, central $69.79 per share, high $79.93 per share

- FY2023: low $57.84 per share, central $74.33 per share, high $84.77 per share

- FY2024: low $80.30 per share, central $107.52 per share, high $123.38 per share

- FY2025: low $72.27 per share, central $90.43 per share, high $103.63 per share

Historical values use today's bond yield for every fiscal year

Historical values use today's FX rate into trading currency for every fiscal year

Historical values use current restated fundamentals and current commodity classification; they are not point-in-time estimates

## Sources

[Original 10-K filing](https://www.sec.gov/Archives/edgar/data/704532/000119312526066937/onto-20260103.htm); period 2026-01-03, filed 2026-02-24.

Estimates depend on assumptions and are not guarantees or investment advice. Underlying data remains subject to its source licenses; public reading does not grant bulk redistribution rights.