Benchmark Co. analyst Mark Miller maintained a Buy rating on Onto Innovation (ONTO – Research Report) today and set a price target of $230.00.
Mark Miller has given his Buy rating due to a combination of factors that indicate strong growth prospects for Onto Innovation. His optimism stems from the company’s reported earnings surpassing investor expectations in the first quarter, with non-GAAP earnings of $1.18 per diluted share, exceeding the forecast by $0.10. Moreover, Onto’s quarterly sales also outperformed, exceeding expectations by $6.2 million. These impressive results were further bolstered by a lower-than-anticipated corporate tax rate. Miller foresees continued growth, driven by a surge in Advanced Node and Power Semiconductor sales, the introduction of high stack devices, and the advancement of logic packaging technologies. Additionally, Onto is positioned to benefit from the global semiconductor industry’s expansion, which is fueled by investments from the U.S., Europe, and Japan in domestic chip production.
Miller’s Buy rating is reinforced by Onto Innovation’s strategic moves within the semiconductor industry, including significant growth in Advanced Node sales and record Specialty/AP sales. The company’s Dragonfly G3 inspection system has seen increased shipments, reflecting a growing demand for AI packaging solutions. Onto has also achieved a milestone with its new Firefly G3 inspection system, which has been adopted by a leading panel manufacturer to identify crucial defects in advanced chiplet substrates. Furthermore, the successful shipment of their JetStep tool for a novel lithography application signifies Onto’s diversification and innovation within its product offerings. These developments, combined with an anticipated recovery in NAND memory capex, lead Miller to project a 23% year-over-year growth in non-GAAP earnings for 2025, justifying an increased target price of $230, up from the previous $180.
Based on the recent corporate insider activity of 46 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of ONTO in relation to earlier this year.
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Onto Innovation (ONTO) Company Description:
Onto Innovation, Inc. engages in developing process control systems. It offers process control, combining global scale with an expanded portfolio of technologies that include: 3D metrology spanning the chip from nanometer-scale transistors to micron-level die-interconnects, macro defect inspection of wafers and packages, metal interconnect composition, factory analytics, and lithography for advanced semiconductor packaging. The company was founded in 1940 and is headquartered in Wilmington, MA.
