Onto Innovation turned a corner at the end of 2023 and is putting up brawny sales and profit numbers. Better yet, the Street forecasts even stronger growth ahead. On Thursday, the IBD Relative Strength (RS) Rating for Onto stock jumped 15 points, from 65 to 80.
Onto Stock Joins Elite Group Of Top Performers
In the 17 months since it hit a 76.40 low in late April 2023, Onto stock has soared about 155%. Onto shot up to an all-time high 238.93 on July 16 this year and consolidated from there. It recently formed an awkward cup-with-handle base as it tries to climb back to and above that July high.
The upgraded 80 RS Score for Onto stock shows that it outperformed 80% of all stocks in the IBD database for price performance this past year. It's a notable achievement because market research shows that the stocks that go on to make the biggest gains often have an RS Rating of 80 or better in the early stages of their moves.
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Wilmington, Mass.-based Onto Innovation makes automated and integrated measurement and inspection systems for chipmakers and flat panel display makers.
Onto stock is working on a cup with handle with a 218.41 buy point, the high point of the handle on the cup-with-handle pattern. See if the stock can clear the breakout price in heavy trade. Onto traded around 194 Thursday afternoon.
In terms of fundamentals, Onto Innovation has posted rising EPS in each of the last two reports on a year-over-year basis. Sales growth has also increased over the same time frame. Last quarter its earnings jumped 67% to $1.32 per share, according to MarketSurge chart analysis. That was up from 28% growth in the first quarter. Revenue for the small-cap company grew 27% in its most recent quarter, to $242.3 million. That followed a 15% increase the prior period.
The Street Expects Big Things From Onto
Consensus of analysts polled by FactSet is for Onto to report double-digit sales and profit growth for at least the next three quarters, starting with a 37% hike in EPS this quarter on a 21% rise in revenue.
Among its other ratings Onto boasts a terrific 98 EPS Rating out of 99, an 85 Composite Rating and a B- Accumulation/Distribution Rating. The B- rating, on an A+ to E scale, shows that funds are buying more of its shares than selling.
Onto Innovation earns the No. 2 rank among its peers in the 27-stock Electronics-Semiconductor Equipment industry group. Nova is the No. 1-ranked stock in the group. However, the group itself ranks a weak 178 out of the 197 industries that IBD tracks.
The unique IBD Relative Strength Rating measures market leadership using a 1 (worst) to 99 (best) score that shows how a stock's price action over the last 52 weeks matches up against the rest of the market.
Please follow James DeTar on X, formerly known as Twitter, @JimDeTar
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