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Onto Innovation (ONTO) Down 13.3% Since Last Earnings Report: Can It Rebound?
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It has been about a month since the last earnings report for Onto Innovation (ONTO - Free Report) . Shares have lost about 13.3% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Onto Innovation due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Onto Innovation Q4 Earnings Beat, Guidance Raised
Onto Innovation reported fourth-quarter 2021 non-GAAP earnings of $1.23 per share, up 71% year over year and beating the Zacks Consensus Estimate by 10.8%.
Revenues of $225.6 million beat the Zacks Consensus Estimate by 4.2%. The top line increased 45.4% year over year and 12% on a quarter-over-quarter basis. The performance was driven by higher demand from several end markets, particularly advanced nodes specialty devices and advanced packaging.
Revenues from the advanced nodes market were up 6%, while revenues from specialty devices and advanced packaging increased 21% year over year. Based on sources of revenues, sales from specialty devices and advanced packaging contributed 48% to revenues. Advanced node markets contributed 33% and software and services represented 19%.
For 2021, Onto Innovation delivered revenues of $788.9 million, up 42% year over year, while earnings per share came in at $2.86 per share, increasing substantially from 63 cents reported in the previous year.
Margin Details
Total operating expenses increased to $73.9 million, up 21.9% from $60.6 million in the prior-year quarter. The upside was driven by additional hiring.
Non-GAAP gross profit rose to $123.9 million from $84 million with respective margins of 55% and 54%. Non-GAAP operating income was $69 million compared with $37.6 million in the year-ago quarter. Non-GAAP operating margin came in at 31%, up from 24% reported in the prior-year quarter.
Cash Flow & Liquidity
For 2021, Onto Innovation generated $175 million cash from operating activities. For the year, the company generated a free cash flow of $163 million. As of Jan 1, 2022, the company had $511.3 million in cash and cash equivalents with $69.2 million of other non-current liabilities.
Q1 Guidance
Encouraged by robust fourth-quarter results and a healthy demand curve, Onto Innovation offered bullish guidance for the first quarter of 2022. The company expects revenues in the range of $226-$240 million. Non-GAAP earnings per share are estimated in the band of $1.13-$1.20.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended upward during the past month.
The consensus estimate has shifted 9.23% due to these changes.
VGM Scores
Currently, Onto Innovation has a nice Growth Score of B, a grade with the same score on the momentum front. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. It comes with little surprise Onto Innovation has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
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Onto Innovation (ONTO) Down 13.3% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for Onto Innovation (ONTO - Free Report) . Shares have lost about 13.3% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Onto Innovation due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Onto Innovation Q4 Earnings Beat, Guidance Raised
Onto Innovation reported fourth-quarter 2021 non-GAAP earnings of $1.23 per share, up 71% year over year and beating the Zacks Consensus Estimate by 10.8%.
Revenues of $225.6 million beat the Zacks Consensus Estimate by 4.2%. The top line increased 45.4% year over year and 12% on a quarter-over-quarter basis. The performance was driven by higher demand from several end markets, particularly advanced nodes specialty devices and advanced packaging.
Revenues from the advanced nodes market were up 6%, while revenues from specialty devices and advanced packaging increased 21% year over year.
Based on sources of revenues, sales from specialty devices and advanced packaging contributed 48% to revenues. Advanced node markets contributed 33% and software and services represented 19%.
For 2021, Onto Innovation delivered revenues of $788.9 million, up 42% year over year, while earnings per share came in at $2.86 per share, increasing substantially from 63 cents reported in the previous year.
Margin Details
Total operating expenses increased to $73.9 million, up 21.9% from $60.6 million in the prior-year quarter. The upside was driven by additional hiring.
Non-GAAP gross profit rose to $123.9 million from $84 million with respective margins of 55% and 54%. Non-GAAP operating income was $69 million compared with $37.6 million in the year-ago quarter. Non-GAAP operating margin came in at 31%, up from 24% reported in the prior-year quarter.
Cash Flow & Liquidity
For 2021, Onto Innovation generated $175 million cash from operating activities. For the year, the company generated a free cash flow of $163 million. As of Jan 1, 2022, the company had $511.3 million in cash and cash equivalents with $69.2 million of other non-current liabilities.
Q1 Guidance
Encouraged by robust fourth-quarter results and a healthy demand curve, Onto Innovation offered bullish guidance for the first quarter of 2022. The company expects revenues in the range of $226-$240 million. Non-GAAP earnings per share are estimated in the band of $1.13-$1.20.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended upward during the past month.
The consensus estimate has shifted 9.23% due to these changes.
VGM Scores
Currently, Onto Innovation has a nice Growth Score of B, a grade with the same score on the momentum front. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. It comes with little surprise Onto Innovation has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.