ONTO INNOVATION INC (NYSE:ONTO) – A Strong Growth Stock with Technical Breakout Potential

ONTO INNOVATION INC (NYSE:ONTO) was identified by our screener as a strong growth stock with a favorable technical setup. The company combines solid fundamentals with a promising chart pattern, making it worth a closer look for investors seeking growth opportunities.

Strong Growth Fundamentals

ONTO Innovation operates in the semiconductor equipment sector, providing metrology and inspection systems critical for advanced chip manufacturing. The company’s fundamentals stand out in several key areas:

• Growth Rating (8/10): ONTO has delivered impressive revenue and earnings growth, with EPS increasing by 42.36% over the past year and revenue growing at 21.23%. Future estimates suggest continued growth, with EPS expected to rise by 16.55% annually.
• Profitability (8/10): The company maintains strong margins, including a 21.36% profit margin, outperforming 83.64% of its industry peers. Return on invested capital (ROIC) is also above average at 10.70%.
• Financial Health (9/10): ONTO has no debt, a current ratio of 8.42, and a quick ratio of 6.74, indicating excellent liquidity.

Technical Setup Suggests Potential Breakout

While ONTO’s long-term trend remains negative, recent price action shows consolidation within a defined range ($92.39 - $105.64). The stock is currently trading near the middle of this range, with a support zone at $97.26 - $98.42 and resistance at $104.04 - $104.18.

Key technical observations:

• Setup Rating (8/10): Reduced volatility and consolidation suggest a potential breakout if the stock can push above resistance.
• Volume: Average daily liquidity is strong at 1.54M shares, though recent volume has been lighter.

A decisive move above $104.18 could signal further upside, while a drop below support may indicate continued weakness.

Our Strong Growth Stocks with Good Technical Setup screener lists more stocks with similar characteristics.
For a deeper analysis, review the full fundamental report and technical report.

Disclaimer

This is not investment advice. The observations here are based on data available at the time of writing, and market conditions can change rapidly. Always conduct your own research before making investment decisions.