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Onto Innovation (ONTO) Laps the Stock Market: Here's Why

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In the latest trading session, Onto Innovation (ONTO - Free Report) closed at $139.83, marking a +1.89% move from the previous day. The stock outperformed the S&P 500, which registered a daily gain of 0.06%. At the same time, the Dow added 0.17%, and the tech-heavy Nasdaq gained 0.39%.

Prior to today's trading, shares of the maker of semiconductor manufacturing equipment had gained 33.68% outpaced the Computer and Technology sector's gain of 8.78% and the S&P 500's gain of 3.94%.

Analysts and investors alike will be keeping a close eye on the performance of Onto Innovation in its upcoming earnings disclosure. In that report, analysts expect Onto Innovation to post earnings of $0.89 per share. This would mark a year-over-year decline of 33.58%. Alongside, our most recent consensus estimate is anticipating revenue of $218.24 million, indicating a 13.47% downward movement from the same quarter last year.

In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $4.92 per share and a revenue of $992.52 million, indicating changes of -7.87% and +0.53%, respectively, from the former year.

Additionally, investors should keep an eye on any recent revisions to analyst forecasts for Onto Innovation. These latest adjustments often mirror the shifting dynamics of short-term business patterns. Hence, positive alterations in estimates signify analyst optimism regarding the business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-term stock moves. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed an unchanged state. Onto Innovation is currently a Zacks Rank #4 (Sell).

Looking at valuation, Onto Innovation is presently trading at a Forward P/E ratio of 27.91. This represents no noticeable deviation compared to its industry average Forward P/E of 27.91.

Also, we should mention that ONTO has a PEG ratio of 0.93. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. As of the close of trade yesterday, the Nanotechnology industry held an average PEG ratio of 0.93.

The Nanotechnology industry is part of the Computer and Technology sector. Currently, this industry holds a Zacks Industry Rank of 235, positioning it in the bottom 5% of all 250+ industries.

The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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