Onto Innovation: B. Riley Securities Downgrades to Buy, PT to $145

Onto Innovation: B. Riley Securities Downgrades to Buy, PT to $145

Onto Innovation Inc. (ONTO) received a downgrade to "Buy" from B. Riley Securities, with a new price target of $145, as reported on July 2, 2025. This move follows the company's recent earnings report for the quarter ended June 30, 2025, where adjusted earnings per share (EPS) were $1.25, slightly missing analysts' expectations of $1.27 per share. The revenue rose 4.7% to $253.6 million, also slightly above the expected $252.26 million.

The downgrade reflects a shift in analysts' sentiment towards the company's growth prospects, particularly in the context of its strategic acquisition of Semilab International and the anticipated impact of tariffs. B. Riley Securities cited the company's strong progress in new product adoption and the expected accretive impact of the Semilab acquisition as key factors in their revised assessment.

Onto Innovation's Q2 2025 earnings call highlighted significant milestones in the development and validation of its next-generation Dragonfly platform, which is projected to drive a sharp acceleration in AI logic packaging revenue in the fourth quarter. The company expects a 50% quarter-over-quarter increase in AI logic packaging revenue, which would mark a substantial rebound after a slower third quarter.

Despite the downgrade, the overall sentiment remains neutral to slightly positive, with analysts focusing on the company's execution and competitive positioning. The acquisition of Semilab is expected to add over $130 million in annual revenue and improve both gross and operating margins. Management has shown increased confidence in the company's ability to navigate the fourth quarter rebound and maintain its growth trajectory.

References:
[1] https://seekingalpha.com/news/4482135-onto-innovation-anticipates-50-percent-ai-packaging-revenue-surge-in-q4-2025-while-advancing
[2] https://www.tradingview.com/news/reuters.com,2025:newsml_L8N3U00SP:0-onto-innovation-inc-reports-results-for-the-quarter-ended-june-30-earnings-summary/