Home > Comparison > Technology > ONTO vs NVEC
The strategic rivalry between Onto Innovation Inc. and NVE Corporation shapes the semiconductor sector’s innovation landscape. Onto Innovation operates as a capital-intensive provider of process control and yield management tools. In contrast, NVE Corporation focuses on niche spintronic sensor technology with a lean operational model. This analysis evaluates which company’s trajectory offers superior risk-adjusted returns, balancing scale against specialization for a diversified portfolio in technology.
Table of contents
Companies Overview
Onto Innovation Inc. and NVE Corporation hold significant roles in the semiconductor sector with distinctive technological approaches.
Onto Innovation Inc.: Leading Process Control Innovator
Onto Innovation Inc. dominates the semiconductor process control market. Its core revenue stems from designing and manufacturing defect inspection, optical metrology, and lithography systems. In 2026, it focuses on expanding its process and yield management solutions for advanced semiconductor packaging and device manufacturers worldwide.
NVE Corporation: Spintronics Specialist
NVE Corporation specializes in spintronic devices pivotal to data acquisition and transmission. Its revenue relies on sales of spintronic sensors and couplers, targeting factory automation and medical markets. The company prioritizes innovation in spintronic technology and licensing magnetoresistive random access memory in 2026 to strengthen its niche.
Strategic Collision: Similarities & Divergences
Both companies operate in semiconductor technology but differ fundamentally. Onto Innovation leverages a broad, integrated product suite for process control, while NVE pursues a focused spintronics niche. Their primary battleground is advanced manufacturing technologies. Onto offers scale and diversification, whereas NVE presents a specialized, high-margin profile appealing to tech investors seeking cutting-edge innovation.
Income Statement Comparison
The following data dissects the core profitability and scalability of both corporate engines to reveal who dominates the bottom line:
| Metric | Onto Innovation Inc. (ONTO) | NVE Corporation (NVEC) |
|---|---|---|
| Revenue | 987M | 26M |
| Cost of Revenue | 472M | 4.2M |
| Operating Expenses | 328M | 5.6M |
| Gross Profit | 515M | 22M |
| EBITDA | 249M | 16M |
| EBIT | 187M | 16M |
| Interest Expense | 0 | 0 |
| Net Income | 202M | 15M |
| EPS | 4.09 | 3.12 |
| Fiscal Year | 2024 | 2025 |
Income Statement Analysis: The Bottom-Line Duel
This income statement comparison reveals which company operates with sharper efficiency and stronger bottom-line momentum.
Onto Innovation Inc. Analysis
Onto Innovation shows robust revenue growth, rising from 556M in 2020 to 987M in 2024. Net income surged 550% over five years, hitting 202M in 2024. Its gross margin stands at a healthy 52%, with net margin at 20%, reflecting disciplined cost control and improving profitability momentum.
NVE Corporation Analysis
NVE Corporation posts smaller scale revenues around 26M in 2025, slightly down from prior years. Despite a 13% revenue drop last year, it sustains an impressive 58% net margin and 62% EBIT margin, signaling strong operational leverage. Net income grew 29% over five years, with margins maintaining premium levels.
Verdict: Scale Growth vs. Margin Excellence
Onto Innovation dominates in top-line expansion and net income growth, reflecting dynamic scaling and margin improvement. NVE excels in margin quality, delivering superior profitability on a smaller revenue base. For investors, Onto’s growth profile suits those targeting expanding market share, while NVE appeals to margin-focused investors valuing consistent high returns.
Financial Ratios Comparison
These vital ratios act as a diagnostic tool to expose the underlying fiscal health, valuation premiums, and capital efficiency of the companies analyzed below:
| Ratios | Onto Innovation Inc. (ONTO) | NVE Corporation (NVEC) |
|---|---|---|
| ROE | 10.5% | 24.2% |
| ROIC | 8.8% | 21.1% |
| P/E | 41.8 | 20.5 |
| P/B | 4.37 | 4.95 |
| Current Ratio | 8.69 | 28.40 |
| Quick Ratio | 7.00 | 22.03 |
| D/E | 0.008 | 0.015 |
| Debt-to-Assets | 0.007 | 0.014 |
| Interest Coverage | 0 | 0 |
| Asset Turnover | 0.47 | 0.40 |
| Fixed Asset Turnover | 7.16 | 8.91 |
| Payout Ratio | 0 | 128% |
| Dividend Yield | 0% | 6.3% |
| Fiscal Year | 2024 | 2025 |
Efficiency & Valuation Duel: The Vital Signs
Financial ratios act as a company’s DNA, exposing hidden risks and operational strengths crucial for informed investment decisions.
Onto Innovation Inc.
Onto Innovation posts a neutral 10.47% ROE and solid 20.43% net margin, signaling decent profitability but limited expansion. Its high 41.76 P/E and 4.37 P/B ratios mark the stock as expensive and stretched. The firm lacks dividends, preferring to reinvest in R&D at 11.83% of revenue, aiming for long-term growth.
NVE Corporation
NVE Corporation shines with a robust 24.19% ROE and impressive 58.22% net margin, reflecting operational efficiency. Its 20.46 P/E ratio appears reasonable given strong returns, though a 4.95 P/B ratio hints at some valuation premium. NVE returns cash via a 6.28% dividend yield, balancing shareholder rewards and growth investments.
Premium Valuation vs. Operational Safety
NVE offers a better balance of risk and reward with higher profitability and reasonable valuation multiples. Onto Innovation’s expensive valuation and reinvestment strategy suit growth-focused investors, while NVE fits those prioritizing operational safety combined with income.
Which one offers the Superior Shareholder Reward?
I compare Onto Innovation Inc. (ONTO) and NVE Corporation (NVEC) on dividends, payout ratios, and buybacks to assess shareholder reward. Onto pays no dividends, prioritizing reinvestment with zero payout and buybacks. NVEC yields 4.5–7.3%, with payout ratios above 100%, indicating aggressive distributions funded by earnings and free cash flow. NVEC maintains strong free cash flow coverage near 90–100%, supporting dividend sustainability, while Onto’s zero payout conserves cash for growth. Both execute buybacks, but NVEC’s high dividend yield plus steady buybacks offer superior total return. Given NVEC’s robust profitability and sustainable payout, I see it as the better choice for shareholder reward in 2026.
Comparative Score Analysis: The Strategic Profile
The radar chart reveals the fundamental DNA and trade-offs of Onto Innovation Inc. and NVE Corporation, highlighting their financial strengths and vulnerabilities:
NVE leads with a stronger overall score of 4 versus Onto’s 3, excelling in return on equity (5 vs. 3) and return on assets (5 vs. 4). Both companies maintain solid debt-to-equity scores (4), indicating balanced leverage. Onto shows a slight edge in asset efficiency but lags in valuation metrics (P/E and P/B scores both at 2). NVE’s more balanced profile derives from superior profitability and asset utilization, while Onto depends more on conservative leverage and operational efficiency.
Bankruptcy Risk: Solvency Showdown
The Altman Z-Score delta favors NVE significantly, suggesting a stronger solvency position and lower bankruptcy risk amid economic cycles:
NVE’s score of 120 firmly places it in the safe zone, vastly surpassing Onto’s 36. Both companies avoid distress, but NVE’s financial cushion is far more robust, reducing the risk of default during downturns.
Financial Health: Quality of Operations
Piotroski F-Scores place both firms in the average range, but NVE edges ahead, signaling slightly better internal financial health:
NVE scores 5, versus Onto’s 4, reflecting marginally stronger profitability, liquidity, and efficiency metrics. While neither shows critical red flags, Onto’s lower score hints at areas for operational improvement to match NVE’s steadier fundamentals.
How are the two companies positioned?
This section dissects the operational DNA of Onto Innovation and NVE Corporation by comparing their revenue distribution and internal dynamics. The goal is to confront their economic moats to identify which model offers the most resilient competitive advantage today.
Revenue Segmentation: The Strategic Mix
This visual comparison dissects how Onto Innovation Inc. and NVE Corporation diversify their income streams and where their primary sector bets lie:
Onto Innovation anchors revenue in Systems And Software, generating $850M in 2024, dwarfing Parts ($77M) and Services ($60M). This concentration signals strong ecosystem lock-in but heightens dependency risk. In contrast, NVE leans heavily on Product sales, totaling $25.9M in 2022, with Contract R&D trailing below $1.2M. Onto’s broader mix suggests infrastructure dominance, while NVE’s reliance on product sales reveals higher concentration risk and less diversification.
Strengths and Weaknesses Comparison
This table compares the Strengths and Weaknesses of Onto Innovation Inc. and NVE Corporation:
Onto Innovation Inc. Strengths
- High net margin at 20.43%
- Very low debt-to-equity ratio at 0.01
- Strong fixed asset turnover at 7.16
- Favorable quick ratio at 7.0
- Diverse geographic revenue including Taiwan, Korea, and US
NVE Corporation Strengths
- Very high net margin at 58.22%
- Strong ROE at 24.19% and ROIC at 21.14%
- Low debt-to-equity at 0.01
- Favorable quick ratio at 22.03
- Significant dividend yield of 6.28%
- Robust global presence across US, Europe, and Asia
Onto Innovation Inc. Weaknesses
- WACC (10.8%) exceeds ROIC (8.77%), indicating value destruction
- Unfavorable PE (41.76) and PB (4.37) ratios suggesting overvaluation
- Very high current ratio (8.69) may indicate inefficient asset use
- Low asset turnover at 0.47
- No dividend yield
NVE Corporation Weaknesses
- Elevated current ratio at 28.4, possibly inefficient capital use
- Unfavorable PB ratio at 4.95
- Lower asset turnover at 0.4
- Neutral PE ratio at 20.46, not highly attractive
Onto Innovation shows strengths in conservative leverage and asset utilization but faces valuation and capital efficiency challenges. NVE Corporation exhibits exceptional profitability and shareholder returns but may need to optimize capital efficiency and valuation metrics. Both companies have broad geographic footprints supporting global market access.
The Moat Duel: Analyzing Competitive Defensibility
A structural moat is the only reliable shield protecting long-term profits from relentless competition erosion. Let’s dissect each firm’s moat:
Onto Innovation Inc.: Intangible Assets and Process Control Expertise
Onto Innovation’s moat stems from proprietary process control tools and software, reflected in steady margin stability despite a negative ROIC vs. WACC. Its growing ROIC signals improving profitability as it expands advanced metrology solutions in 2026.
NVE Corporation: Cost Advantage through Spintronics Innovation
NVE leverages unique spintronic technology, driving exceptionally high margins and ROIC well above WACC. Despite recent revenue dips, its niche cost advantage and innovation pipeline position it for growth in industrial IoT and medical sensor markets.
Moat Strength Showdown: Intangible Assets vs. Spintronic Cost Leadership
NVE’s wider and deeper moat is evident in its strong ROIC premium and margin dominance, signaling superior value creation. Onto Innovation shows improving profitability but still sheds value, leaving NVE better equipped to defend and grow market share.
Which stock offers better returns?
Both Onto Innovation Inc. and NVE Corporation exhibited distinct price movements and trading dynamics over the past year, reflecting divergent investor sentiment and market performance.
Trend Comparison
Onto Innovation’s stock shows a bullish trend with a 9.57% price gain over the past 12 months. The trend accelerates, reaching a high of 233.14 and a low of 88.5, with notable volatility (std dev 43.03).
NVE Corporation’s stock displays a bearish trend, falling 20.36% over the same period. Despite recent acceleration, overall volatility remains low (std dev 7.56), with prices ranging between 56.99 and 90.18.
Comparing both, Onto Innovation delivers the strongest market performance with positive growth and acceleration. NVE lags with a significant decline despite a mild recent rebound.
Target Prices
Analysts provide a clear target consensus for Onto Innovation Inc., reflecting moderate upside potential.
| Company | Target Low | Target High | Consensus |
|---|---|---|---|
| Onto Innovation Inc. | 160 | 260 | 191.67 |
The target consensus of $191.67 sits just below Onto Innovation’s current price of $192.21, signaling balanced expectations. No verified target price data is available for NVE Corporation.
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How do institutions grade them?
The following summarizes the latest institutional grades for Onto Innovation Inc. and NVE Corporation:
Onto Innovation Inc. Grades
This table shows recent grades assigned by reputable financial institutions to Onto Innovation Inc.:
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Needham | Maintain | Buy | 2026-01-20 |
| B. Riley Securities | Maintain | Buy | 2026-01-15 |
| Stifel | Maintain | Hold | 2026-01-14 |
| Needham | Maintain | Buy | 2026-01-06 |
| Jefferies | Maintain | Buy | 2025-12-15 |
| Needham | Maintain | Buy | 2025-11-18 |
| B. Riley Securities | Maintain | Buy | 2025-11-18 |
| Evercore ISI Group | Maintain | Outperform | 2025-11-05 |
| Oppenheimer | Maintain | Outperform | 2025-10-14 |
| Stifel | Maintain | Hold | 2025-10-13 |
NVE Corporation Grades
No reliable institutional grades are available for NVE Corporation.
Which company has the best grades?
Onto Innovation Inc. has received consistently positive grades from multiple reputable firms, primarily Buy and Outperform ratings. NVE Corporation lacks institutional grade data, which limits investors’ ability to gauge expert sentiment. This disparity may affect investor confidence and market visibility.
Risks specific to each company
The following categories identify the critical pressure points and systemic threats facing both firms in the 2026 market environment:
1. Market & Competition
Onto Innovation Inc.
- Faces intense competition in semiconductor process control tools; premium pricing pressures due to high P/E ratio.
NVE Corporation
- Operates in niche spintronics market with fewer direct competitors but smaller scale limits market influence.
2. Capital Structure & Debt
Onto Innovation Inc.
- Extremely low debt levels (D/E 0.01) reduce financial risk; high current ratio may signal inefficient capital use.
NVE Corporation
- Also low leverage (D/E 0.01) with very high current ratio suggests excess liquidity but potential capital inefficiency.
3. Stock Volatility
Onto Innovation Inc.
- Beta of 1.48 indicates higher volatility than market average, increasing investment risk.
NVE Corporation
- Beta of 1.22 is moderately high but lower than Onto, implying somewhat less sensitivity to market swings.
4. Regulatory & Legal
Onto Innovation Inc.
- Exposure to evolving semiconductor manufacturing regulations and export controls could raise compliance costs.
NVE Corporation
- Faces regulatory scrutiny mainly around emerging spintronics tech patents and medical device certifications.
5. Supply Chain & Operations
Onto Innovation Inc.
- Complex global supply chains for advanced lithography tools pose risks of disruption and cost inflation.
NVE Corporation
- Smaller scale and specialized components reduce supply chain complexity but increase vendor dependency risks.
6. ESG & Climate Transition
Onto Innovation Inc.
- Needs to align with stricter industry ESG standards; energy-intensive manufacturing could weigh on carbon footprint.
NVE Corporation
- Smaller operational footprint eases climate transition; however, limited disclosure on ESG initiatives raises transparency concerns.
7. Geopolitical Exposure
Onto Innovation Inc.
- Global operations expose Onto to trade tensions between US and Asia, impacting supply and sales.
NVE Corporation
- Predominantly US-focused with limited international exposure, reducing geopolitical risk but limiting growth avenues.
Which company shows a better risk-adjusted profile?
Onto Innovation’s highest risk is market competition compounded by valuation pressures and operational complexity. NVE’s main risk lies in capital inefficiency and niche market dependency. NVE’s stronger profitability and safer balance sheet yield a better risk-adjusted profile. Notably, NVE’s 58% net margin and 21% ROIC in 2025 justify confidence despite its small size. Onto’s elevated beta and unfavorable asset turnover heighten caution despite scale advantages.
Final Verdict: Which stock to choose?
Onto Innovation Inc. (ONTO) shines as a cash-efficient growth engine with accelerating profitability and a robust balance sheet. Its key point of vigilance lies in a current ratio that suggests excess liquidity, which might tie up capital inefficiently. ONTO suits portfolios seeking aggressive growth with a tolerance for operational nuances.
NVE Corporation (NVEC) commands a strategic moat through exceptional profitability and a sustainable competitive advantage, evidenced by a return on invested capital well above its cost of capital. NVEC offers a more conservative safety profile with strong financial stability, fitting well within GARP (Growth at a Reasonable Price) investment strategies.
If you prioritize aggressive growth driven by improving profitability and operational momentum, ONTO stands out despite some capital efficiency concerns. However, if you seek superior stability coupled with a proven economic moat and consistent value creation, NVEC offers a compelling scenario, commanding a premium for its financial resilience and strategic positioning.
Disclaimer: Investment carries a risk of loss of initial capital. The past performance is not a reliable indicator of future results. Be sure to understand risks before making an investment decision.
Go Further
I encourage you to read the complete analyses of Onto Innovation Inc. and NVE Corporation to enhance your investment decisions:
