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Onto Innovation (ONTO) Unveils New Process Control Solutions

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Onto Innovation (ONTO - Free Report) recently unveiled two new process control solutions — Atlas S and Element S — primarily for the fast-growing silicon carbide (SiC) and gallium nitride (GaN) power device markets.

The company’s Atlas S solution is an optical critical dimension metrology system while Element S is a high-speed impurity mapping, dielectric film composition and epi thickness measurement solution.

These solutions are complementary to the company’s Dragonfly inspection, IVS overlay and Echo metrology product lines. These new products, when used in tandem with the existing product lines, will be able provide customers with a portfolio of complete process control tools and software to address myriad of challenges in the specialty markets, added ONTO.

With these products, ONTO is looking to tap the lucrative power device markets. The transition to electric vehicles is driving the SiC power device market.

The use of GaN into fast charge applications across automotive and consumer markets is driving the GaN power device market. Citing a Yole Group report, Onto Innovation added that demand for SiC and GaN power devices is expected to witness annual average growth rate approaching 34% and 44% respectively, by 2027. This bodes well for Onto Innovation.

Given the buzz surrounding power devices, the company’s Atlas S and Element S systems have already witnessed bookings worth $26 million. Customers will be taking delivery of initial systems in the fourth quarter of 2023, added ONTO.

Further, ONTO highlighted that it expects these new solutions along with the existing specialty portfolio to contribute 24% improvement in revenues for the company in the power device market on a year-over-year basis.

Headquartered in Wilmington, MA, Onto Innovation operates as a leading manufacturer of avant-garde process control tools that perform macro defect inspections and metrology, and lithography systems.

At present, ONTO carries a Zacks Rank #3 (Hold). The stock has surged 60.6% compared with the sub-industry’s growth of 62.3% in the past year.

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Some better ranked stocks in the broader technology space are Woodward (WWD - Free Report) , Watts Water Technologies (WTS - Free Report) and Blackbaud (BLKB - Free Report) . Watts Water Sports a Zacks Rank #1 (Strong Buy) while Woodward and Blackbaud carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Woodward’s fiscal 2023 earnings has increased 0.3% in the past 60 days to $3.59 per share. WWD’s long-term earnings growth rate is anticipated to be 13.5%. Shares of WWD have risen 34.6% in the past year.

The consensus mark for Watts Water’s 2023 earnings is pegged at $7.27 per share, up 1.1% in the past 60 days. The long-term earnings growth rate is anticipated to be 8%.

Watts Water’s earnings beat the Zacks Consensus Estimate in the last four quarters, the average surprise being 16.3%. Shares of WTS have increased 49.4% in the past year.

The consensus estimate for Blackbaud’s 2023 earnings is pegged at $3.75 per share, up 1.9% in the past 60 days. The long-term earnings growth rate is anticipated to be 21.9%.

Blackbaud’s earnings beat the Zacks Consensus Estimate in the last four quarters, the average beat being 10.4%. Shares of BLKB have improved 35.1% in the past year.

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