Onto Innovation Stock Rides A 6-Day Winning Streak To A 17% Gain

Onto Innovation (ONTO) stock is on a 6-day winning streak, up 17.2% since the run began. That added about $2.4 billion to the company's market value, which now stands at about $16.2 billion. The stock closed at $327.77 on Friday, October 2, 13.4% below its 52-week high of $378.45 and 170.1% above its low of $121.34.

The Streak Next To The S&P 500

Returns for ONTO and the S&P 500 over the streak and the periods around it, all ending Friday, October 2 and including dividends:

Is This Move About Onto Innovation Or The Market?

Over the same 6 trading days, the S&P 500 returned +0.3% including dividends, so the run is mostly Onto Innovation's own story rather than the market's. Over the past three months the stock is up 7.9%, a window that includes the streak; over the other 57 sessions of that window it was down 7.9%.

What The Numbers Say About The Rally

On the fundamentals, revenue grew 8.1% over the last twelve months, against a median of 17.9% for S&P 500 Information Technology stocks; its operating margin is 13.8%, versus a median of 21.7%; and the stock trades at 122.1 times trailing earnings against a median of 37.2. The numbers make the run harder to justify: revenue growth below the median, margins below the median and a multiple well above the median. At this price, the stock is asking a lot of the business.

A climb like this is worth respecting, and worth testing. Our Guidance Momentum screen tracks the stocks whose companies just raised their own forward numbers.

Momentum Is A Tailwind, Not A Plan

Riding a stock that rises every day feels effortless, and that is precisely the danger: the same momentum that built this run can reverse without notice, and one name's reversal should never be able to reset your whole year.

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