Onto Innovation reports Q1 2026 results on May 7 against a backdrop of aggressive analyst upgrades and a stock that has already re-rated sharply higher.
The analyst setup is the dominant story heading into this print. In the three weeks to April 20, six firms raised their price targets — four on a single day, April 17. Stifel upgraded to Buy from Hold, lifting its target from $220 to $350. Oppenheimer and Evercore both maintained Outperform ratings while moving targets to $350 and $315 respectively. Needham followed days later, raising to $320 from $275. The consensus mean target now sits at $338 — about 11% above the current price of $305 — but the speed of revisions reflects analysts playing catch-up with a stock that has already run 42% in a month. The stock is up 8% on the week alone, now trading at 38.5x trailing earnings with the P/E expanding by more than 7 points over the past 30 days.
Bulls point to the qualification of Onto's DragonFly G5 system at a leading foundry customer as a signal that market share is stabilising. The company's advanced packaging and process control exposure — both tied to AI-driven investment cycles — give it a credible growth narrative. EPS momentum ranks in the 79th percentile on a 30-day basis, and forward earnings estimates have risen year-on-year by a measure that also sits in the 79th percentile. The analyst recommendation divergence score lands in the 88th percentile, suggesting the Street is more constructive on than it typically is across the broader universe. Bears counter with execution risk: slower-than-expected market share gains, customer concentration, and a valuation that has expanded materially just as the print arrives. P/B has moved from roughly 4.5 to 6.0 over the past month.
Short positioning offers no meaningful counterweight to the bullish narrative. Short interest is just 2.5% of the free float — a level that warrants only a passing mention. Borrowing costs run at a very low 0.33% annualised, and borrow availability is wide open, with the lending pool far from stressed. The put/call ratio of 0.62, barely a quarter of a standard deviation above its 20-day average of 0.58, points to options traders who are neither hedging aggressively nor loading up on calls. Close peers AMAT and ENTG are each up 5–7% on the day, and most semiconductor equipment names have followed a similar trajectory on the week — ONTO's move is large in magnitude but not isolated in direction. RSI at 65.8 points to a stock that is elevated but not yet technically extended.
The May 7 print tests whether the DragonFly ramp and advanced packaging momentum can be quantified in the revenue and margin lines at a pace that justifies the re-rating the stock has already received.
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