Onto Innovation Inc. (NYSE:ONTO) defied analyst predictions to release its second-quarter results, which were ahead of market expectations. It was overall a positive result, with revenues beating expectations by 2.9% to hit US$242m. Onto Innovation reported statutory earnings per share (EPS) US$1.07, which was a notable 19% above what the analysts had forecast. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

Following the latest results, Onto Innovation's seven analysts are now forecasting revenues of US$970.1m in 2024. This would be a decent 8.1% improvement in revenue compared to the last 12 months. Per-share earnings are expected to bounce 27% to US$4.26. Before this earnings report, the analysts had been forecasting revenues of US$944.6m and earnings per share (EPS) of US$3.82 in 2024. There's been a pretty noticeable increase in sentiment, with the analysts upgrading revenues and making a nice gain to earnings per share in particular.

Despite these upgrades,the analysts have not made any major changes to their price target of US$264, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Onto Innovation at US$288 per share, while the most bearish prices it at US$230. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Onto Innovation is an easy business to forecast or the the analysts are all using similar assumptions.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. The period to the end of 2024 brings more of the same, according to the analysts, with revenue forecast to display 17% growth on an annualised basis. That is in line with its 21% annual growth over the past five years. Juxtapose this against our data, which suggests that other companies (with analyst coverage) in the industry are forecast to see their revenues grow 18% per year. It's clear that while Onto Innovation's revenue growth is expected to continue on its current trajectory, it's only expected to grow in line with the industry itself.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Onto Innovation following these results. There was also an upgrade to revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider industry. The consensus price target held steady at US$264, with the latest estimates not enough to have an impact on their price targets.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Onto Innovation going out to 2026, and you can see them free on our platform here.

You can also see our analysis of Onto Innovation's Board and CEO remuneration and experience, and whether company insiders have been buying stock.

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