Wingstop (WING - Free Report) reported $183.73 million in revenue for the quarter ended March 2026, representing a year-over-year increase of 7.4%. EPS of $1.18 for the same period compares to $0.99 a year ago.
The reported revenue represents a surprise of -1.81% over the Zacks Consensus Estimate of $187.12 million. With the consensus EPS estimate being $1.02, the EPS surprise was +16.11%.
While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street expectations to determine their next move, some key metrics always offer a more accurate picture of a company's financial health.
As these metrics influence top- and bottom-line performance, comparing them to the year-ago numbers and what analysts estimated helps investors project a stock's price performance more accurately.
Here is how Wingstop performed in the just reported quarter in terms of the metrics most widely monitored and projected by Wall Street analysts:
Total System-wide Restaurants: 3,153 compared to the 3,160 average estimate based on six analysts.Domestic same store sales growth: -8.7% versus -6.3% estimated by six analysts on average.Total Franchise Restaurants: 3,096 versus 3,103 estimated by five analysts on average.Number of Restaurants at end of period - Domestic Company-Owned Activity: 57 versus the five-analyst average estimate of 58.Number of Restaurants at end of period - International Franchised Activity: 500 compared to the 501 average estimate based on four analysts.Total Domestic Restaurants: 2,653 compared to the 2,661 average estimate based on four analysts.Number of Restaurants at end of period - Domestic Franchised Activity: 2,596 versus the four-analyst average estimate of 2,604.Company-owned domestic same store sales growth: -2.2% versus the three-analyst average estimate of 1.4%.New Restaurant Openings - International Franchised Activity: 33 versus the three-analyst average estimate of 29.Revenue- Royalty revenue, franchise fees and other: $87.47 million compared to the $85.79 million average estimate based on six analysts. The reported number represents a change of +11% year over year.Revenue- Company-owned restaurant sales: $32.99 million compared to the $34.98 million average estimate based on six analysts. The reported number represents a change of +9.8% year over year.Revenue- Advertising fees: $63.27 million versus the six-analyst average estimate of $66.35 million. The reported number represents a year-over-year change of +1.6%.View all Key Company Metrics for Wingstop here>>>
Shares of Wingstop have returned +11.6% over the past month versus the Zacks S&P 500 composite's +12.2% change. The stock currently has a Zacks Rank #3 (Hold), indicating that it could perform in line with the broader market in the near term.
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Published in earnings earnings-estimates-revisions earnings-surprise
Wingstop WING is navigating through a tough quarter following its Q1 results released today. The fast-casual restaurant chain surpassed earnings per share (EPS) expectations but fell short on revenue, which grew 7.4% year-over-year to $183.7 million. Additionally, WING has revised its fiscal year 2026 domestic comparable store sales outlook, now forecasting a low-single-digit decline instead of flat to low-single-digit growth.
Domestic comparable store sales dropped 8.7%, falling short of WING's expectations and indicating a sequential slowdown due to consumer pressure on traffic. Weather-related closures and rising gas prices from the Middle East conflict have negatively impacted WING's lower-income customer base, worsening trends after a stable start to the quarter. Despite the decline in comps, system-wide sales rose 5.9% to $1.4 billion, driven by WING's aggressive expansion, including the addition of 97 net new restaurants, equating to a 17% unit growth. Adjusted EBITDA increased by 9.9% to $65.4 million, with improved brand partner margins thanks to lower food costs and enhanced supply chain visibility supporting restaurant-level economics. WING is making strides in enhancing speed, accuracy, and consistency through its Smart Kitchen initiative, while marketing efforts are successfully attracting new customers and boosting engagement. The company reaffirmed its FY26 global unit growth target of 15-16%. Although the reduced comp guidance is disappointing, WING anticipates a return to growth in the second half of the year as initiatives like Smart Kitchen, Club Wingstop, and marketing efforts align effectively. This quarter has posed challenges for WING, with domestic comparable sales weakening compared to previous quarters. The lowered FY26 domestic comp outlook to a low-single-digit decline is a primary concern. While weather-related closures and high gas prices have impacted traffic, top-line growth is still supported by WING's expansion strategy and strong brand partner demand. The company aims for a stronger second half, contingent on the success of its various initiatives. However, investors will be looking for clearer signs of traffic stabilization and improvement in comparable sales as WING navigates a challenging consumer landscape.
This stock alert was generated using automated technology and GuruFocus financial data to provide readers with timely and accurate market reporting. This content was reviewed by GuruFocus editorial team prior to publication. Please send any questions or comments about this story to [email protected].
Wingstop Inc. (NASDAQ:WING) on Wednesday reported mixed first-quarter results.
The company reported first-quarter adjusted earnings per share of $1.18, beating the analyst consensus estimate of $1.03. Quarterly sales of $183.725 million (+7.4% year over year) missed the Street view of $189.109 million.
"Despite the decline in same-store sales, we delivered system-wide sales growth and double-digit Adjusted EBITDA growth in the quarter, supported by 17% unit growth," said CEO Michael Skipworth.
The company said its 2026 outlook remains tied to an uncertain macro environment. It now expects a low-single-digit decline in domestic same-store sales.
Wingstop shares fell 3% to trade at $166.04 on Thursday.
These analysts made changes to their price targets on Wingstop following earnings announcement.
Considering buying WING stock? Here’s what analysts think:
Photo via Shutterstock
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Wingstop is downgraded to Sell as decaying same store sales and aggressive, unrealistic expansion targets undermine the investment case. WING now guides to a low single-digit decline in same store sales for FY26, a sharp reversal from prior flat-to-growth expectations. Unit growth is unsustainable given franchisee margin pressures, weak comps, and macro headwinds; 16% location growth guidance appears highly unrealistic.
Several U.S. restaurant chains are reporting weaker than expected sales growth in the latest quarter as high gasoline prices squeeze consumers' budgets.
Gas prices have surged amid the war in Iran, with average gas prices reaching $4.45 a gallon around the country, an increase of about 41% in the last year, according to AAA data.
Prices have risen even more dramatically in certain states, with gas prices in California topping $6 a gallon, which can weigh heavily on restaurants with a presence in the nation's most populous state.
An analysis by Revenue Management Solutions, a restaurant consulting firm, finds that $4 a gallon is a tipping point as consumers will gradually decrease their restaurant visits until gas prices at the pump hit that threshold, at which point the impact doubles.
DOJ CONFIRMS ANTITRUST PROBE OF MAJOR MEATPACKERS OVER BEEF PRICE INFLATION
Wingstop is one of the restaurants that has reported slowing sales amid the gas price surge. (Bing Guan/Bloomberg via Getty Images)
The firm estimated that $4.20 average gas prices mean about 1.5% fewer restaurant visits, and if they rise to $5.10 or more, fast-food restaurants could see a 3% drop in traffic. Further, it estimated that for a drive-through restaurant with 300 daily transactions, a $1 spike loses about six customers per day and amounts to about $22,000 in lost annual sales.
Wingstop, a chicken-wing chain that touts its affordability, said that higher fuel prices contributed to an 8.7% decline in quarterly same-store sales.
The chain's CEO, Michael Skipworth, said Wednesday on a call with investors that it was "extremely difficult for anyone to predict this macro environment," adding that he expects shrinking sales over this year in part because of expectations that gas prices will remain high.
MCDONALD'S IS QUIETLY DITCHING A POPULAR IN-STORE FEATURE NATIONWIDE
Domino's said that its rivals are aggressively discounting to compete as consumers are strained by energy prices. (Beata Zawrzel/NurPhoto via Getty Images)
Domino's CEO Russell Weiner told investors on Tuesday that his chain's competitors ran promotions "out of our playbook," which contributed to the weaker than expected same-store sales growth of 0.9% in the latest quarter. Weiner added that while his chain is still better positioned than its rivals to sustain those discounts, the company lowered its sales forecasts for the year.
Some restaurant chains that performed well in the latest quarter are remaining cautious as they look ahead in their outlook. Chipotle had better than expected same-store sales growth of 0.5%, but kept an outlook of flat growth this year, which CFO Adam Rymer attributed in part to gas price uncertainty.
Starbucks reported 7.1% quarterly same-store sales growth in North America on Tuesday and may have benefited from the gloomy consumer outlook, as CEO Brian Niccol told investors the company gained among lower-income consumers who saw the chain as offering "a little bit of indulgence."
Ticker Security Last Change Change % WING WINGSTOP INC 153.88 +8.29 +5.69% DPZ DOMINO'S PIZZA INC. 312.26 -2.51 -0.80% YUM YUM! BRANDS INC. 153.27 +2.19 +1.45% XBUX NO DATA AVAILABLE - - - COSTCO CHANGES BELOVED $1.50 HOT DOG DEAL FOR THE FIRST TIME IN DECADES: REPORTS
Restaurants are also looking to meet consumer demand for affordable meals through value menu offerings. Taco Bell, a subsidiary of Yum Brands, launched a value menu starting at $3 in January and reported 8% quarterly same-store sales growth at U.S. restaurants.
Mark Wasilefsky, head of restaurant finance at TD Bank, said that the industry is "seeing a record level of value menus right now."
Investors' concerns about the restaurant sector's resiliency during the gas price spike has contributed to a 5% drop in the LSEG U.S. restaurant index since the start of the Iran war, which erased over $40 billion in market value, according to LSEG data.
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The next key indicator of the impact of the Iran war and the gas price shock on the restaurant industry and its consumers will come on May 7 when McDonald's reports, after the chain had stronger sales growth than expected in the prior quarter amid a value menu push.
Wingstop (WING - Free Report) has been one of the most searched-for stocks on Zacks.com lately. So, you might want to look at some of the facts that could shape the stock's performance in the near term.
Over the past month, shares of this restaurant chain have returned -13.7%, compared to the Zacks S&P 500 composite's +11.4% change. During this period, the Zacks Retail - Restaurants industry, which Wingstop falls in, has lost 1.1%. The key question now is: What could be the stock's future direction?
While media releases or rumors about a substantial change in a company's business prospects usually make its stock 'trending' and lead to an immediate price change, there are always some fundamental facts that eventually dominate the buy-and-hold decision-making.
Earnings Estimate RevisionsHere at Zacks, we prioritize appraising the change in the projection of a company's future earnings over anything else. That's because we believe the present value of its future stream of earnings is what determines the fair value for its stock.
Our analysis is essentially based on how sell-side analysts covering the stock are revising their earnings estimates to take the latest business trends into account. When earnings estimates for a company go up, the fair value for its stock goes up as well. And when a stock's fair value is higher than its current market price, investors tend to buy the stock, resulting in its price moving upward. Because of this, empirical studies indicate a strong correlation between trends in earnings estimate revisions and short-term stock price movements.
For the current quarter, Wingstop is expected to post earnings of $1.03 per share, indicating a change of +3% from the year-ago quarter. The Zacks Consensus Estimate has changed -2.4% over the last 30 days.
The consensus earnings estimate of $4.58 for the current fiscal year indicates a year-over-year change of +12.3%. This estimate has changed +0.3% over the last 30 days.
For the next fiscal year, the consensus earnings estimate of $5.55 indicates a change of +21.1% from what Wingstop is expected to report a year ago. Over the past month, the estimate has changed -1.9%.
Having a strong externally audited track record, our proprietary stock rating tool, the Zacks Rank, offers a more conclusive picture of a stock's price direction in the near term, since it effectively harnesses the power of earnings estimate revisions. Due to the size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, Wingstop is rated Zacks Rank #3 (Hold).
The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:
12 Month EPS
Projected Revenue GrowthEven though a company's earnings growth is arguably the best indicator of its financial health, nothing much happens if it cannot raise its revenues. It's almost impossible for a company to grow its earnings without growing its revenue for long periods. Therefore, knowing a company's potential revenue growth is crucial.
In the case of Wingstop, the consensus sales estimate of $190.13 million for the current quarter points to a year-over-year change of +9.1%. The $776.19 million and $888.84 million estimates for the current and next fiscal years indicate changes of +11.4% and +14.5%, respectively.
Last Reported Results and Surprise HistoryWingstop reported revenues of $183.73 million in the last reported quarter, representing a year-over-year change of +7.4%. EPS of $1.18 for the same period compares with $0.99 a year ago.
Compared to the Zacks Consensus Estimate of $187.12 million, the reported revenues represent a surprise of -1.81%. The EPS surprise was +15.69%.
The company beat consensus EPS estimates in each of the trailing four quarters. The company topped consensus revenue estimates times over this period.
ValuationNo investment decision can be efficient without considering a stock's valuation. Whether a stock's current price rightly reflects the intrinsic value of the underlying business and the company's growth prospects is an essential determinant of its future price performance.
Comparing the current value of a company's valuation multiples, such as its price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), to its own historical values helps ascertain whether its stock is fairly valued, overvalued, or undervalued, whereas comparing the company relative to its peers on these parameters gives a good sense of how reasonable its stock price is.
As part of the Zacks Style Scores system, the Zacks Value Style Score (which evaluates both traditional and unconventional valuation metrics) organizes stocks into five groups ranging from A to F (A is better than B; B is better than C; and so on), making it helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.
Wingstop is graded D on this front, indicating that it is trading at a premium to its peers. Click here to see the values of some of the valuation metrics that have driven this grade.
ConclusionThe facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Wingstop. However, its Zacks Rank #3 does suggest that it may perform in line with the broader market in the near term.
Wingstop stands out in the fast casual dining sector, leveraging strong social media engagement to build brand loyalty. WING's innovative marketing, such as exclusive Instagram campaigns, drives customer enthusiasm and repeat business. The company's ability to convert online hype into tangible growth signals a robust, differentiated strategy beyond mere social media trends.
Gameday energy comes to life in Dallas and Toronto with bold flavors, fan-first moments and exclusive performances from platinum-selling rapper FERG
, /PRNewswire/ -- Wingstop (NASDAQ: WING) is bringing its House of Flavor experience to North America for the first time, turning up the heat this summer with culture-driven experiences only Wingstop can deliver.
Wingstop's hometown of Dallas hosts House of Flavor from June 24-July 3.
House of Flavor debuts in Toronto from June 11-14. Wingstop's House of Flavor, coming to its hometown of Dallas as well as Toronto throughout June, is the ultimate fan destination. The experience features Wingstop's sauced-and-tossed wings, live DJs, gameday watch parties, merch, free tattoos and nonstop vibes. Dallas will also feature a barber delivering fresh, soccer-inspired cuts, while Toronto will offer custom nail art. Both cities will host exclusive, one-night-only performances from FERG on June 11 in Toronto and June 24 in Dallas.
House of Flavor previously had epic runs at major cultural moments in Milan (February 2026) and Paris (July 2024). In North America, the experience will feature immersive, flavor-packed environments that are inspired by the global energy of summer soccer.
"When the world shows up for the game, we bring the flavor and the culture," said Donnie Upshaw, Chief Brand Officer of Wingstop. "House of Flavor is built for that energy, bringing fans together through culture, community and craveable flavor you can see, feel and taste."
House of Flavor is free and open to the public in Toronto from June 11 to 14 at Stanley Barracks and in Dallas from June 24 to July 3 at The Bomb Factory, both open 11 a.m. until late. Hours are subject to change, entry fees and/or age restrictions may apply, and entry restrictions may apply.
For more information, visit www.houseofflavor.com.
About Wingstop
Founded in 1994 and headquartered in Dallas, TX, Wingstop Inc. (NASDAQ: WING) operates and franchises more than 3,000 restaurants worldwide, with approximately 98% of the total restaurant count owned by brand partners. Generating over $5 billion in system-wide sales in fiscal 2025, Wingstop offers made-to-order, always fresh classic and boneless wings, tenders and chicken sandwiches in 12 bold, distinctive flavors, alongside signature sides and iconic housemade ranch and bleu cheese dips. Dedicated to Serving the World Flavor, Wingstop is the Official Chicken Partner of the NBA with a vision to become a Top 10 Global Restaurant Brand. Learn more at wingstop.com or follow @Wingstop on X, Instagram, Facebook and TikTok.
Wingstop's (WING +2.02%) reputation as a reliable growth stock took a hit last year as its 21-year streak of positive same-store sales growth came to an abrupt end.
The weakness in traffic for the fast-casual wing chain has lingered longer than expected, as same-store sales declines accelerated to nearly 9% in the first quarter. The stock has fallen roughly 25% since its first quarter report on April 29, and is now down around 70% from its all-time high.
Yet while sales at existing locations are struggling, the appetite to open new ones has never been stronger. The company opened a record 493 net new restaurants last year and is guiding for another 15% store growth this year. This expansion is driven by a record development pipeline of more than 2,200 committed units.
Image source: Getty Images.
Franchisees are still betting on the brand Even with recent pressure, a new location still targets an industry-leading unlevered cash-on-cash return of more than 70% in its second year of operation. You know the economics are compelling when more than 90% of all new domestic development has come from existing brand partners for two years in a row.
Wingstop's nearly pure-play franchise model, with 98% of locations run by independent operators, allows it to navigate this environment a bit better than its franchisees. Even as organic growth dips into negative territory, the company continues to collect royalties and advertising fees from a growing base of restaurants.
The company is working to turn things around. A systemwide rollout of its "Smart Kitchen" platform aims to cut ticket times and improve order accuracy. Early results show a 16-percentage-point improvement in the speed of service during peak hours, and the upcoming rollout of its national loyalty program is looking to drive traffic.
The spending pullback hits home Last year, domestic same-store sales declined by 3.3%, Wingstop's first negative annual print in more than two decades. Management has pointed to a combination of factors, including elevated gas prices and pressure on its lower-income customer base, which makes up roughly a quarter of its sales.
For a brand with an average ticket price in the mid-$20 range, competition from cheaper fast-food and grocery-store options seems to be testing the limits of its value proposition. If same-store sales remain in negative territory for an extended period, it could erode franchisee profitability and slow the brand's expansion plans, which have been a key part of the story.
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Wingstop's long track record of organic growth was the result of a solid business model that remains largely intact, driven by franchisee demand for new locations. While the current challenges are real, they appear more driven by external pressures than by a fundamental flaw in the brand, offering patient investors an opportunity to consider picking up shares at a reasonable price.
Integrates Ultra-Low Cost, Mass-Producible Long-Range Surveillance and One Way Systems into the Draganfly Platform of Drones
Tampa, FL., May 18, 2026 (GLOBE NEWSWIRE) -- Draganfly Inc. (NASDAQ: DPRO) (CSE: DPRO) (FSE: 3U8) (“Draganfly” or the “Company”), an award-winning, industry-leading drone solutions and systems developer, is pleased to announce that it has entered into a definitive asset purchase agreement (the “Agreement”) with Skip Dynamix, Corporation (“Skip Dynamix”), a developer of ultra-low-cost, mass-producible fixed-wing unmanned aerial systems designed for long-range intelligence, surveillance and reconnaissance (“ISR”), electronic warfare support, logistics, and one-way missions. pursuant to which Draganfly has agreed to acquire substantially all of the assets of Skip Dynamix’s drone technology business (the “Transaction”).
The Transaction deepens Draganfly’s defense platform portfolio and further strategically positions the Company within one of the fastest-growing segments of the global defense technology market: low-cost autonomous aerial systems capable of scalable deployment in contested environments.
The Transaction will combine Draganfly’s proven manufacturing, autonomy, AI, command-and-control, and military systems integration capabilities with Skip Dynamix’s innovative fixed-wing platform architecture optimized for affordability, rapid production, modular payload integration, and long-range operational deployment.
“Modern conflicts have fundamentally reshaped military procurement priorities,” said Cameron Chell, Chief Executive Officer of Draganfly. “The battlefield lessons emerging from Ukraine, the Middle East, and evolving Indo-Pacific security planning are clear: survivable mass, low-cost autonomy, long-range ISR, and systems are becoming core operational requirements for allied defense forces.”
“Skip Dynamix gives Draganfly a highly scalable platform capable of addressing this rapidly expanding global demand while complementing our existing ISR, logistics and tactical drone, defense technologies.”
Positioned for the New Era of Attributable Autonomous Systems
The Transaction coincides with accelerating global defense investment into low-cost autonomous aerial systems designed for persistent ISR, swarm deployment, electronic warfare resilience, and one-way operations. The Department of War has publicly identified low-cost autonomous systems as a strategic priority aimed at rapidly fielding large numbers of expendable autonomous systems for Indo-Pacific and other contested operational theaters.
The Pentagon’s initiatives specifically seek to deploy “thousands” of low-cost autonomous systems to the Indo-Pacific region to counter near-peer threats through distributed and scalable autonomous capabilities.
The Asia-Pacific ISR aircraft and drone market alone is projected to grow to more than US$20.5 billion by 2035 according to industry reports, driven by rising geopolitical tensions, maritime security requirements, and defense modernization programs across the region. At the same time, defense agencies globally are increasingly prioritizing systems that can be manufactured securely, rapidly and deployed at scale at materially lower cost than traditional cruise missiles or large unmanned platforms.
Scalable, Modular, and Mission Adaptable
Skip Dynamix’s systems architecture integrated into the Draganfly platform of drones is designed around rapid manufacturability, operational flexibility, and modular mission payloads, supporting applications including:
Long-range ISRMaritime surveillanceBorder securityCommunications relayElectronic warfare supportAutonomous logistics deliveryForce protectionOne-way missionsSwarm and distributed operations The systems are designed to integrate with commercially scalable manufacturing approaches and open architecture payload systems, enabling rapid adaptation for evolving mission requirements and allied defense procurement programs.
Draganfly expects the Transaction to enhance its ability to support defense customers seeking affordable autonomous systems deployable at scale across contested operational environments.
Expanding Defense and Allied Opportunities
In addition to strengthening Draganfly’s positioning with Department of War programs, the Transaction also strengthens NATO-aligned modernization initiatives, allied defense procurement agencies, and Indo-Pacific security programs increasingly focused on autonomous and asymmetric defense technologies. Draganfly intends to integrate Skip Dynamix’s technologies into its broader defense ecosystem, including AI-enabled autonomy, sensor integration, tactical ISR operations, and next-generation autonomous mission systems.
“The acquisition of Skip Dynamix is an important strategic step for Draganfly as we continue to expand our platform capabilities for defense, government, public safety, and international customers,” said Cameron Chell, CEO of Draganfly. “The Orca fixed-wing platform adds long-range, hand-launchable endurance to our portfolio and addresses a clear capability gap in the market. By bringing Skip Dynamix’s technology and team into Draganfly, we believe we can accelerate commercialization, expand customer opportunities, and strengthen our position as a trusted North American drone solutions provider.”
Transaction Highlights
Addresses Critical Multi Mission Opportunity Within One Platform. The Transaction of the Orca fixed-wing platform complements Draganfly’s established multi-rotor portfolio, including the Flex FPV, Apex, Commander 3XL, and Heavy Lift systems, by adding a long-range, hand-launchable fixed-wing capability that addresses a critical integrated multi-mission opportunity not being served in the existing market. Expanded Market Reach. The Transaction is expected to widen Draganfly’s presence in the defense, national security, government, and international markets, providing access to Skip Dynamix’s existing pipeline of opportunities for the Orca platform.Revenue Synergies. Management believes the business combination offers significant revenue synergies, allowing for incremental revenue growth for Draganfly in excess of Skip Dynamix’s standalone forecasts and valuation.Retention of Key Talent. Skip Dynamix’s founders, Jonathan Baron and Andrew Chapman, will continue with the combined business under employment agreements, bringing specialized expertise in fixed-wing sUAS technology. Key Strategic Goals for 2026. The key strategic goals for the Skip Dynamix acquisition in 2026 will be: (i) to fully exploit the existing pipeline of opportunities; (ii) to advance autonomy-assisted flight operations; and (iii) to establish Draganfly as the leading multi-platform (Fixed-wing and multi-rotor) integrated operations drone platform. Material Terms of the Agreement
The aggregate purchase price for the Transaction is up to US$7,525,000 (the “Purchase Price”):
A cash payment of US$2,525,000 (the “Closing Amount”), subject to customary working capital adjustments, will be paid to Skip Dynamix at closing. US$2,500,000 satisfiable in common shares of Draganfly (“Draganfly Shares”) pursuant to a special warrant issued at closing (the “Payment Shares”). The Payment Shares will be issued subject to the satisfaction of the Payment Vesting Condition, which requires each founder to be actively engaged by Draganfly until at least the first anniversary of closing. up to US$2,500,000 (the “Earn-Out Amount”), payable in a combination of cash and Draganfly Shares as determined by Draganfly, subject to: (i) the business achieving certain milestones. Completion of the Transaction is subject to a number of closing conditions customary for a transaction of this nature, including required regulatory and exchange approvals and the satisfaction of other customary conditions precedent, and is expected to close in early June 2026.
Additional transaction details will be disclosed in the Company’s applicable regulatory filings.
About Skip Dynamix
Skip Dynamix is a Delaware-based drone technology company engaged in the design, manufacture, marketing, sale and distribution of long-range, hyper-customizable, multi-purpose, hand-launchable, fixed-wing sUAS, including the Orca platform. Skip Dynamix serves customers across defense, national security, government and international markets.
About Draganfly
Draganfly Inc. (NASDAQ: DPRO; CSE: DPRO; FSE: 3U8) is a leader in cutting-edge drone solutions and software that are transforming industries and serving stakeholders globally. Recognized for innovation and excellence for over 25 years, Draganfly is an award-winning Original Equipment Manufacturer and technology integrator to the public safety, civil, military, agriculture, industrial inspection, security, mapping, and surveying markets. The Company is driven by passion, ingenuity, and a mission to provide efficient solutions and first-class services to customers worldwide, saving time, money, and lives.
For more information, visit www.draganfly.com.
CSENASDAQFRANKFURT Media Contact
Erika Racicot
Email: [email protected]
This release contains certain “forward looking statements” and certain “forward-looking information” as defined under applicable securities laws. Forward-looking statements and information can generally be identified by the use of forward-looking terminology such as “may”, “will”, “expect”, “intend”, “estimate”, “anticipate”, “believe”, “continue”, “plans” or similar terminology. Forward-looking statements and information include, but are not limited to, statements with respect to Draganfly’s integration plans with respect to the Skip Dynamix’s products, the size of the drone market, the ability of the Company to complete sales of its products to defense organizations, all statements under the heading “Transaction Highlights”, the expected closing of the Transaction and the expected closing date of the Transaction, Transaction benefits, expected additional revenues, expected growth, revenue synergies, strategic goals, results of operations, performance, industry trends and growth opportunities. Forward-looking statements and information are based on forecasts of future results, estimates of amounts not yet determinable and assumptions that, while believed by management to be reasonable, are inherently subject to significant business, economic and competitive uncertainties and contingencies. Forward-looking statements and information are subject to various known and unknown risks and uncertainties, many of which are beyond the ability of the Company to control or predict, that may cause the Company’s actual results, performance or achievements to be materially different from those expressed or implied thereby, and are developed based on assumptions about such risks, uncertainties and other factors set out herein, including but not limited to: the risk that the Transaction may not be completed as expected or at all; the expected benefits of the Transaction and additional revenues may not materialize; the inherent risks involved in the general securities markets; uncertainties relating to the availability and costs of financing needed in the future; the inherent uncertainty of cost estimates and the potential for unexpected costs and expenses; currency fluctuations; regulatory restrictions; liability; competition; loss of key employees; and other related risks and uncertainties. For more information on the risks, uncertainties and assumptions that could cause anticipated opportunities and actual results to differ materially, please refer to the public filings of Draganfly which are available on SEDAR+ at www.sedarplus.ca and with the United States Securities and Exchange Commission on EDGAR at www.sec.gov. The Company undertakes no obligation to update forward-looking information except as required by applicable law. Such forward-looking information represents management’s best judgment based on information currently available. No forward-looking statement can be guaranteed, and actual future results may vary materially. Accordingly, readers are advised not to place undue reliance on forward-looking statements or information.
Every retail trader on FinTwit is still arguing about Wingstop (NASDAQ:WING | WING Price Prediction) after another headline-grabbing earnings beat and a fresh debate over whether the selloff is finally a buying opportunity.
The Wingstop Story Has Cracked Strip away the unit-growth marketing and the picture is grim. Domestic same-store sales fell 8.7% in Q1, and that decline has gotten worse every quarter for a year: -1.9% to -5.6% to -5.8% to -8.7%. Management just cut full-year guidance to a low-single-digit decline in domestic comps, citing “sustained consumer spending pressure.”
The balance sheet tells the rest of the story. Total liabilities of $1.45 billion sit against total assets of $648.89 million, leaving shareholders’ equity at negative $799.17 million. Net income collapsed 67.61% year over year. The headline EPS beat reflects buyback math rather than business momentum. The market has noticed: the stock is down 45.71% year-to-date and 59.59% over the past year. That is a hype cycle unwinding in real time.
The Boring Stuff Worth a Look The other side of this trade is asset-heavy infrastructure. Real refineries, real rails, real wires. Three names earn the redirect.
Marathon Petroleum (NYSE:MPC) is the kind of business Wingstop’s fans pretend not to like until they look at the numbers. Q4 adjusted EPS came in at $4.07 against a $2.71 estimate, refining margins expanded to $18.65 per barrel, and management returned $4.5 billion to shareholders last year with another $4.4 billion still authorized. Marathon trades at a forward P/E of 7, with MPLX distributions of $2.8 billion annually covering the dividend and standalone capex on their own. The stock is up 60.38% year-to-date. WTI at $102.28 a barrel keeps the margin story intact.
Union Pacific (NYSE:UNP) owns something nobody can replicate: a 23-state freight rail network. Q1 EPS of $2.93 beat estimates, the operating ratio improved 80 basis points to 59.9%, and shareholders’ equity rose 21.07% to $19.42 billion. That is the opposite of Wingstop’s balance sheet. The pending merger with Norfolk Southern would create America’s first transcontinental railroad, and management is targeting high-single to low-double digit EPS growth through 2027. Pricing exceeds inflation. Bulk revenue rose 10%.
American Electric Power (NASDAQ:AEP) is the cleanest way to own the data center power buildout without paying NVIDIA multiples. Signed incremental load to be served by 2030 just doubled to 56 GW, with AEP Texas alone accounting for 36 GW of hyperscale demand. The company guided to $6.15 to $6.45 in 2026 EPS, a $72 billion five-year capital plan, and 7% to 9% long-term growth, all while paying a 2.92% dividend. Rate base is set to compound 10% annually to $128 billion by 2030. Morgan Stanley raised its target to $133.
The Bottom Line Wingstop is a high-multiple growth story with negative equity, decelerating comps, and a stock chart that has already broken. Marathon, Union Pacific, and AEP own physical assets the economy cannot do without, generate the cash flow to fund real buybacks and dividends, and sit on secular tailwinds in refining, freight, and grid power. For a retirement-focused investor who is tired of being exit liquidity for the next viral chart, the contrast between Wingstop and the three asset-heavy names above is worth studying.
On May 21, 2026, Wingstop Inc WING shares rose 3.5% today, currently priced at $132.63. The stock has seen significant volatility with a 52-week range of $116.35 to $388.14.
GF Value™ verdict: Current price of $132.63 is 64.7% below the estimated fair value of $376.11. GF Score™: 83/100, indicating a strong overall rating. Notable signal: Insider activity shows $0.9M in sales over the last 3 months with no buying. Is WING Overvalued or Undervalued? Wingstop Inc's current share price of $132.63 is significantly below the GF Value™ of $376.11, suggesting that the stock is 64.7% undervalued. This substantial margin of safety indicates a potential opportunity for long-term investors if the company's fundamentals align with future growth expectations. The GF Valuation label classifies WING as significantly undervalued, and this could signal a buying opportunity for investors who believe in the company's growth trajectory.
However, it is essential to approach this finding with caution. The discrepancies between the intrinsic value and current market price may also reflect underlying risks. Factors such as market sentiment, economic conditions, and company performance can impact future valuations. GF Value™ is GuruFocus' proprietary measure of intrinsic value, calculated from historical trading multiples, past business growth, and future performance estimates.
How Does WING's Valuation Compare to Its History? Metric Current Historical P/E (TTM) 33.0x 92.7x Forward P/E 29.0x N/A The current P/E ratio of 33.0x is significantly lower than the 5-year median P/E of 92.7x, indicating that the stock is trading well below its historical valuation metrics. This aligns with the GF Value™ verdict that suggests WING is undervalued. The substantial difference in P/E ratios further supports the idea that the market may not fully recognize Wingstop's growth potential.
What Does WING's GF Score™ Tell Us? Metric Rating GF Score™ 83/100 Financial Strength 4/10 Profitability 10/10 Growth 10/10 Valuation 2/10 Momentum 4/10 The GF Score™ of 83/100 indicates that Wingstop Inc has strong potential for long-term returns, particularly highlighted by its perfect scores in Profitability and Growth, both rated 10/10. However, it faces weaknesses in Valuation, with a low score of 2/10, suggesting that the stock may not be as attractively priced relative to its historical performance. The Financial Strength score of 4/10 indicates some concerns that investors should consider when analyzing the company.
What Are Insiders Doing with WING Stock? In the last three months, insiders have sold $0.9 million worth of Wingstop shares, with no recorded purchases during this period. This trend of insider selling may suggest a lack of confidence among executives about the company's near-term prospects or valuation levels. While insider activity can sometimes provide insight into the company's future, it is essential to consider the broader context and not base conclusions solely on these transactions.
What This Means for Investors Based on the analysis of GF Value™, Wingstop Inc WING is currently undervalued, presenting a potential opportunity for investors who are willing to look beyond recent price volatility and insider selling activity.
For the complete analysis, visit the Wingstop Inc WING stock page. You can also explore the GF Value™ page for detailed valuation methodology, or use the GuruFocus Stock Screener to find similar opportunities.
Frequently Asked Questions What is WING's GF Score™?
The GF Score™ for Wingstop Inc is 83/100, indicating a strong potential for long-term returns based on various key aspects of its business.
Is WING overvalued or undervalued?
WING is currently undervalued, with a GF Value™ of $376.11 compared to its current price of $132.63, representing a 64.7% upside.
What is WING's P/E ratio?
The P/E ratio for WING is 33.0x, significantly lower than its historical 5-year median of 92.7x, suggesting the stock is trading below its typical valuation levels.
This stock alert was generated using automated technology and GuruFocus financial data to provide readers with timely and accurate market reporting. This content was reviewed by GuruFocus editorial team prior to publication. Please send any questions or comments about this story to [email protected].
10 Wings for $10, 20 for $20 and 30 for $30 Available Nationwide Through May 26
, /PRNewswire/ -- Memorial Day weekend just got more flavorful. Wingstop is kicking off the summer of value with new limited-time bundles featuring 10 wings for $10, 20 wings for $20 and 30 wings for $30.
Available nationwide through May 26, guests can choose from Classic Wings, Boneless Wings or Mix & Match orders across all bundle options.
Wingstop's New $1 Per-Wing Bundles Whether it's a beach weekend, cookout, game night or an easy dinner with friends, Wingstop's cooked-to-order wings bring bold flavor to every summer occasion.
"At Wingstop, summer is all about getting together over great food and unforgettable flavor," said Donnie Upshaw, Chief Brand Officer at Wingstop. "These new bundles make it easy for fans to enjoy more of the wings and flavors they love all weekend long."
Fans can pair their order with Wingstop's newest limited-time flavor, Citrus Mojo — a zesty blend of citrus, garlic and mojo-inspired herbs — or choose from the brand's 12 iconic flavors, including Lemon Pepper, Hot Honey Rub, Mango Habanero, Original Hot and Garlic Parmesan.
The offer is available nationwide exclusively through the Wingstop app and online ordering at Wingstop.com.
Prices may be higher in AK/HI. $1-per-wing offer applies only to 10 wings for $10, 20 wings for $20 and 30 wings for $30 offers at participating locations. Valid through May 26, 2026. See Wingstop.com/offers for full details.
About Wingstop
Founded in 1994 and headquartered in Dallas, TX, Wingstop Inc. (NASDAQ: WING) operates and franchises more than 3,000 restaurants worldwide, with approximately 98% of the total restaurant count owned by brand partners. Generating over $5 billion in system-wide sales in fiscal 2025, Wingstop offers made-to-order, always fresh classic and boneless wings, tenders and chicken sandwiches in 12 bold, distinctive flavors, alongside signature sides and iconic housemade ranch and bleu cheese dips. Dedicated to Serving the World Flavor, Wingstop is the Official Chicken Partner of the NBA with a vision to become a Top 10 Global Restaurant Brand. Learn more at wingstop.com or follow @Wingstop on X, Instagram, Facebook and TikTok.
Reality star and pop culture icon Maura Higgins teams up with Wingstop to launch the program and a limited-edition "Club in a Box" featuring curated items by the celebrity
, /PRNewswire/ -- Wingstop (NASDAQ: WING) is bringing bold flavor and unmatched energy together with the launch of Club Wingstop, a next-level loyalty rewards program and experience built on one core belief: Members Eat First. Built on Wingstop's continued investment in digital innovation, Club Wingstop is the next evolution in creating personalized, connected fan experiences.
Wingstop partners with Maura Higgins to debut Club Wingstop, Wingstop’s next-level loyalty program.
Club in a Box brings the Members Eat First experience to life with a limited-edition collection of essentials, curated by Maura Higgins and Wingstop.
Known for her deep understanding of loyalty, Maura Higgins partners with Wingstop to show how Club Wingstop rewards fans who go all in. More than a traditional rewards program, Club Wingstop turns flavor obsession into exclusive access, unlocking insider perks, real-world moments and crave-worthy experiences fans can't get anywhere else. Additionally, members will unlock innovative features like one of the first points-sharing loyalty experiences, alongside group ordering, exclusive access to new flavors, limited-edition merch drops, members-only events and more.
To bring the program to life, Wingstop partnered with someone who deeply understands the power of loyalty and fandom – reality star and pop culture icon, Maura Higgins. Together, they're making one thing clear: for Club Wingstop, loyalty actually pays off.
"Our fans go all in for Wingstop, and Club Wingstop is our way of rewarding that fandom," said Donnie Upshaw, Chief Brand Officer of Wingstop. "This is bigger than points and perks. We're building a community where our most loyal fans get access to cultural experiences only Wingstop can deliver, while creating more ways for people to come together, stay in and make Wingstop part of their shared moments."
To celebrate the launch, Wingstop and Maura Higgins are giving fans a way to experience Club Wingstop firsthand with a limited release, Club in a Box.* Curated by Maura Higgins and Wingstop, the exclusive Club in a Box captures the bold flavor and members eat first vibe behind the Club Wingstop experience. Each box includes Maura-inspired essentials, including a signature green beret and bag scarf, Wingstop serving tray, JBL Bluetooth speaker, Polaroid camera, custom matchboxes, a gift card and more, all packaged in a premium, designer-inspired Wingstop green bag. The Club in a Box will be available to Club Wingstop members on wingshop.com for just 94 cents starting Monday, June 1 at 7 a.m. CT, limited quantities available while supplies last.
"There's always a club everyone wants to get into, and now it's Club Wingstop," said Maura Higgins. "Coming from reality TV, I know how powerful loyalty can be. What I love about Club Wingstop is that it goes all in for the fans who go all in for Wingstop. I had so much fun curating Club in a Box to capture that iconic energy."
Club in a Box is just the beginning. Club Wingstop will continue bringing loyalty to life through exclusive access to fan experiences and cultural moments, from a suite at WWE SummerSlam to exclusive seats at NBA games. This summer, the program will also debut at Wingstop's recently announced House of Flavor experience, featuring secret password entry, exclusive flavors, custom merch and drinks, and signature ranch bottle service that fans won't find anywhere else.
For more information, visit wingstop.com or the Wingstop app.
*Club in a Box available first-come, first-served while supplies last to Club Wingstop members in the U.S. Limit 1 per member. Approx. Available beginning 6/1/26 at 7:00 a.m. CT. Contents and value may vary. No substitutions or cash redemption. Void where prohibited.
About Wingstop
Founded in 1994 and headquartered in Dallas, TX, Wingstop Inc. (NASDAQ: WING) operates and franchises more than 3,000 restaurants worldwide, with approximately 98% of the total restaurant count owned by brand partners. Generating over $5 billion in system-wide sales in fiscal 2025, Wingstop offers made-to-order, always fresh classic and boneless wings, tenders and chicken sandwiches in 12 bold, distinctive flavors, alongside signature sides and iconic housemade ranch and bleu cheese dips. Dedicated to Serving the World Flavor, Wingstop is the Official Chicken Partner of the NBA with a vision to become a Top 10 Global Restaurant Brand. Learn more at wingstop.com or follow @Wingstop on X, Instagram, Facebook and TikTok.
On May 27, 2026, Wingstop Inc WING shares rose 8.2% to a current price of $152.06. The stock has experienced significant volatility over the past year, with a 52-week range of $116.35 to $388.14. Despite today's positive movement, the stock is down 54.8% over the past year.
GF Value™ verdict: Current price of $152.06 vs GF Value™ of $376.84, indicating a 59.6% upside. GF Score™: 83/100 (Strong), suggesting solid overall fundamentals. Most notable signal: Insider activity reflects a net sale of $0.1 million in the last three months, with no buying activity. Is WING Overvalued or Undervalued? The current price of Wingstop Inc WING at $152.06 is significantly below the GF Value™ estimate of $376.84. This represents a margin of safety of 59.6%, indicating that the stock is undervalued based on intrinsic value calculations. GF Valuation is labeled as significantly undervalued, suggesting that there is a considerable opportunity for price appreciation if the market corrects itself towards the intrinsic value. However, potential investors should be cautious, as the stock has demonstrated high volatility and a downward trend over the past year.
GF Value™ is GuruFocus' proprietary measure of intrinsic value, calculated from historical trading multiples, past business growth, and future performance estimates. Given the current valuation, WING presents a potentially attractive investment opportunity, but it is essential to consider the broader market conditions and inherent risks involved.
How Does WING's Valuation Compare to Its History? Metric Current Historical P/E (TTM) 37.8x 92.3x (5-Year Median) Forward P/E 33.2x N/A Currently, Wingstop's P/E ratio of 37.8x is significantly below its 5-year median of 92.3x, indicating that the stock is trading at a lower valuation compared to its historical levels. This aligns with the GF Value™ verdict that suggests WING is undervalued, providing further evidence for potential upside as the stock adjusts to its historical valuation range.
What Does WING's GF Score™ Tell Us? Metric Rating GF Score™ 83/100 Financial Strength 4/10 Profitability 10/10 Growth 10/10 Valuation 2/10 Momentum 4/10 The GF Score™ of 83/100 highlights Wingstop's strong fundamentals, particularly in profitability and growth, where it achieved perfect scores of 10/10. However, the valuation rank of 2/10 indicates significant concerns regarding its current market price relative to its intrinsic value. The financial strength score of 4/10 suggests that while there are potential risks, the overall financial position is not alarming. This mixed score presents a picture of a company with robust growth potential but currently undervalued based on market performance.
What Are Insiders Doing with WING Stock? In recent months, insiders at Wingstop Inc have sold approximately $0.1 million worth of shares, with no buying activity reported. This pattern may suggest a cautious stance among insiders regarding the company’s short-term performance. While insider selling does not inherently indicate a negative outlook, it can be interpreted as a lack of confidence in the stock's immediate prospects or an effort to realize gains. Investors should monitor insider activity as it can provide insights into management's sentiment about the company’s future.
What This Means for Investors Based on the GF Value™ assessment, Wingstop Inc WING is currently undervalued, presenting a possible investment opportunity for those looking to capitalize on its intrinsic value. However, the significant volatility and recent performance trends warrant careful consideration.
For the complete analysis, visit the Wingstop Inc WING stock page. You can also explore the GF Value™ page for detailed valuation methodology, or use the GuruFocus Stock Screener to find similar opportunities.
Frequently Asked Questions What is WING's GF Score™?
The GF Score™ for Wingstop Inc is 83/100, indicating strong overall fundamentals and potential for long-term returns.
Is WING overvalued or undervalued?
WING is currently undervalued, with a GF Value™ estimate of $376.84 compared to its current price of $152.06.
What is WING's P/E ratio?
WING's P/E (TTM) is 37.8x, which is significantly below its 5-year median P/E of 92.3x, confirming its undervaluation.
This stock alert was generated using automated technology and GuruFocus financial data to provide readers with timely and accurate market reporting. This content was reviewed by GuruFocus editorial team prior to publication. Please send any questions or comments about this story to [email protected].
This is a fair market value price provided by Massive. Learn more.
52-Week Range$116.35▼
$381.45Dividend Yield0.75%
P/E Ratio38.35
Price Target$274.82
Foodies may love Wingstop Inc.'s NASDAQ: WING spicy wings, but the stock has left some investors feeling burned.
Shares have been under pressure since hitting a peak in 2024, and a recent rise in short interest suggests many investors remain skeptical about its near-term growth prospects.
Get Wingstop alerts:
Still, Wall Street isn't ready to send the order back. Analysts see significant upside from current levels, with the average price target sitting well above where the stock trades today. If they're right, the recent selloff could be a good entry point.
Wingstop Shares Have Fallen Sharply Since Their 2024 PeakBetween mid-2022 and 2024, Wingstop was on a roll, and its shares reflected the enthusiasm. Multiple quarters of earnings and revenue beats, along with more than 20 consecutive years of same-store sales growth, helped send the stock from the $70 to $80 range in June 2022 to an all-time high above $433 by the end of September 2024.
Soon after hitting the high, though, momentum started to fade. The stock bounced around over the next year, but by the end of October 2025, it had lost roughly half its value, trading around $215.
Wingstop Inc. (WING) Price Chart for Friday, June, 12, 2026
Shares remained volatile into early 2026, rallying ahead of and after the company's fourth-quarter earnings report in February. However, they soon reversed course, and the tough consumer backdrop continued to sour sentiment.
By mid-May, the stock had fallen to a 52-week low of around $116. Year-to-date, the stock is down around 40%, and over the last 12 months, it has fallen more than 60%. Since hitting its 2024 high, Wingstop's market cap has fallen from more than $12.5 billion to roughly $3.9 billion.
Winter Weather and Higher Gas Prices Hurt Q1 ResultsThe first-quarter results reported at the end of April did little to ease investors' concerns. Same-store sales declined again, and while earnings came in ahead of Wall Street's expectations, revenue fell short.
The company largely attributed the weakness to winter weather, which led to multiple temporary restaurant closures, and to higher gas prices, which weighed on consumer spending, particularly among its lower-income core customer base. According to the company, results would have been broadly in line with expectations, excluding the impact of those factors.
The expectation that gas prices would remain elevated also weighed on the company's outlook. For the full year, Wingstop said it now expects domestic same-store sales to decline by a low-single-digit percentage, compared with its previous forecast for flat to low-single-digit growth. Despite the weaker outlook, the company still expects the business to return to growth in the second half of the year.
Short Interest Jumps SharplyThe weaker results and lowered guidance have fueled a growing wave of bearish bets against the stock.
Short interest has climbed sharply in recent months. As of May 15, roughly 5.2 million shares were sold short, representing about 19.2% of the company's float. That's up from approximately 3.7 million shares, or 13.5% of the float, on April 30.
The increase suggests many investors remain skeptical that the company's recent sales challenges and pressure on lower-income consumers will ease anytime soon.
Wall Street Still Sees Substantial UpsideEven with short interest on the rise, analysts remain largely optimistic and continue to see meaningful upside from current levels.
Current Price$157.22High Forecast$440.00Average Forecast$274.82Low Forecast$160.00Wingstop Stock Forecast Details
The stock has a Moderate Buy consensus rating, with 27 analysts rating it a Buy, five rating it a Hold, and one rating it a Sell.
While several analysts have lowered their price targets in recent months, the average 12-month target of roughly $275 still implies around 90% upside from current levels.
Even the lowest price target of $160 sits above the current share price, while the highest target of $440 suggests the stock could more than triple.
The bullish price targets seem to suggest that analysts view many of the company's recent challenges as temporary and remain confident in Wingstop's long-term growth prospects.
Other Quick-Service Restaurant Chains Also Feel the PinchWingstop isn't the only restaurant chain facing pressure as consumers have become more cautious with their spending. Other quick-service restaurant stocks have also struggled as lower-income consumers, who make up a large portion of their customer base, have been squeezed by higher living costs.
Over the past 12 months, both Jack in the Box NASDAQ: JACK and The Wendy's Company NASDAQ: WEN have fallen more than 40%. Year-to-date, they have fallen around 35% and 20%, respectively. Meanwhile, Domino's Pizza Inc. NASDAQ: DPZ has declined about 30% over the last 12 months. The pizza chain is down nearly 25% year to date.
While it's impossible to predict how consumer spending trends will evolve, Wingstop said it remains focused on execution and has been making progress on key strategic initiatives to improve operational efficiency, attract new guests, and launch a loyalty program to drive sustained growth.
Whether these measures will be enough to reignite growth remains to be seen. However, analysts remain largely optimistic about the company's long-term opportunity. If their price targets prove accurate, investors buying the stock at current levels could see significant upside.
Should You Invest $1,000 in Wingstop Right Now?Before you consider Wingstop, you'll want to hear this.
MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Wingstop wasn't on the list.
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Key Takeaways Onto Innovation topped Q1 revenue and EPS estimates on strong AI and advanced packaging demand.ONTO raised its 2026 outlook and targets an operating margin above 30% by fourth-quarter 2026.ONTO highlighted Dragonfly G5 and Atlas G6 traction amid rising HBM and AI chip demand. Onto Innovation Inc. (ONTO - Free Report) described first-quarter 2026 as a better-than-expected start, fueled by strong AI-driven demand in advanced nodes and advanced packaging. The company also raised its 2026 outlook, projecting revenue growth of more than 30% and targeting an operating margin above 30% by the fourth quarter.
Both the top and bottom-line figures surpassed the respective Zacks Consensus Estimate as well as management’s expectations. Onto Innovation reported first-quarter revenues of $291.9 million, up 9.5% year over year and ahead of its expectations ($275–$285 million). Non-GAAP EPS came in at $1.42, also above forecasts ($1.26-$1.36). The semiconductor equipment company continues to benefit from strong AI-driven demand, advanced packaging adoption and next-generation chip manufacturing trends.
ONTO’s shares have soared 204.5% in the past year, outperforming the Zacks Nanotechnology industry’s growth of 198.9%. The company has also outpaced the Zacks Computer and Technology sector and the S&P 500 composite’s growth of 53.8% and 31.8%, respectively.
Image Source: Zacks Investment Research
ONTO’s key competitors include KLA Corporation (KLAC - Free Report) , Camtek Ltd (CAMT - Free Report) and Applied Materials (AMAT - Free Report) . KLAC, CAMT and AMAT have grown 145.8%, 197% and 159.2%, respectively, in the same time frame.
But after the stock’s massive run over the past year, investors are asking an important question: Is ONTO still a buy, or has the rally already priced in the good news?
Let’s dig deep.
Why Investors are Bullish on ONTOThe major tailwind for Onto Innovation is the ongoing AI infrastructure boom. Advanced AI chips require more sophisticated packaging, higher precision inspection, advanced metrology tools and increased defect detection. Onto Innovation specializes in these areas. As companies like NVIDIA, Taiwan Semiconductor Manufacturing Company and memory manufacturers ramp AI production, Onto Innovation’s tools become increasingly essential. Management specifically referenced “insatiable” AI compute demand during earnings commentary. This positions ONTO as a secondary beneficiary of the AI boom without directly competing in chip design.
Rising demand for advanced semiconductor nodes, strong AI and high-bandwidth memory (HBM) investments, adoption of new inspection and metrology platforms and expansion in advanced packaging technologies augur well. Management highlighted strong traction for the Dragonfly G5 inspection system and Atlas G6 platform, both of which are gaining adoption among leading chipmakers. Advanced packaging technologies, such as 2.5D and 3D integration, are becoming essential for AI accelerators and high-performance computing chips. As chipmakers seek higher performance and better power efficiency, packaging complexity is increasing rapidly.
Image Source: Zacks Investment Research
The Dragonfly G5 platform addresses this trend by enabling more advanced defect inspection and process monitoring capabilities. Winning qualifications from both logic and HBM customers signals that Onto Innovation is strengthening its position in one of the fastest-growing semiconductor equipment segments. This is particularly important because HBM demand has surged alongside AI infrastructure growth. Companies producing GPUs and AI accelerators require increasingly sophisticated memory architectures, creating a major opportunity for semiconductor process control vendors like Onto Innovation.
Another major development was Onto Innovation’s collaboration with Rigaku Holdings Corporation. As part of the partnership, ONTO will purchase a 27% ownership stake in Rigaku for approximately $710 million. The transaction is expected to close in the second half of 2026. The partnership gives Onto Innovation access to a broader portfolio of advanced X-ray technologies, which could significantly enhance its semiconductor inspection and metrology capabilities. It expects three key benefits from the Rigaku deal — high-margin AI Diffract software licensing revenue, increased sales of metrology tools like Atlas G6 and annual dividend income of about $7 million — with these gains expected to offset lost interest income within a year of closing.
Combined with its earlier Semilab USA acquisition, Onto Innovation is clearly pursuing a strategy centered around expanding its process control ecosystem. These investments may help Onto Innovation address increasingly complex semiconductor manufacturing challenges while creating additional long-term revenue streams.
ONTO’s Profitability Mixed, Non-GAAP Margins Remain StrongDespite record revenue, Onto Innovation’s GAAP profitability metrics declined year over year. GAAP gross margin fell to 50.1% from 53.7% in the prior-year quarter. Operating income also declined significantly, with GAAP operating margin dropping to 11.5% from 23.7%.
However, non-GAAP results painted a more stable picture. Non-GAAP gross margin improved slightly to 55.7%, while non-GAAP operating income rose to $77.9 million. The disparity between GAAP and non-GAAP figures likely reflects acquisition-related costs, stock compensation expenses and investments tied to future growth initiatives. Importantly, Onto Innovation maintained strong profitability relative to many peers in the semiconductor equipment industry. A non-GAAP operating margin above 26% demonstrates that the company continues to generate healthy operational leverage even while investing aggressively for expansion.
Onto Innovation ended the quarter with approximately $654 million in cash and short-term investments. The company also generated roughly $26 million in operating cash flow during the first quarter, providing additional financial flexibility. While the Rigaku investment represents a sizable capital commitment, Onto Innovation’s strong balance sheet positions it well to pursue strategic initiatives without placing excessive pressure on liquidity. The company’s financial strength could become increasingly valuable as semiconductor manufacturers accelerate spending on advanced packaging, AI infrastructure and next-generation fabrication technologies.
Despite the strong quarter, investors should understand the risks. Onto Innovation remains exposed to semiconductor industry cycles, including weaker electronics demand, inventory corrections, geopolitical risks and reduced chip-equipment spending. Onto Innovation competes against major semiconductor equipment players. Larger competitors have deeper resources and broader product portfolios. ONTO’s success depends on maintaining technological leadership in niche but critical areas of semiconductor inspection and metrology. Management highlighted rising cost pressures from higher material and fuel expenses, along with increased investments in R&D and service teams in the near term.
ONTO’s Stock is ExpensiveONTO has rallied significantly over the past year, and the valuation now reflects high expectations. In terms of forward price/earnings, ONTO’s shares are trading at 37.7X, higher than the industry’s 7.45X.
Image Source: Zacks Investment Research
KLAC, CAMT and AMAT are trading at multiples of 38.92X, 60.4X and 34.27X, respectively.
Upbeat Estimate Revision Trend for ONTOEarnings estimates for ONTO have moved up for both 2026 and 2027 over the past 60 days.
Image Source: Zacks Investment Research
Should You Buy ONTO Stock?ONTO appears to be a high-quality AI semiconductor infrastructure play with strong long-term growth potential. The company is executing well, benefiting from industry megatrends and showing improving operational leverage. Its latest results underscore how AI infrastructure spending, advanced packaging technologies and next-generation chip manufacturing are becoming major growth drivers across the semiconductor equipment industry.
While some profitability metrics softened on a GAAP basis, Onto Innovation’s strategic positioning in advanced nodes, HBM and GAA process control continues to strengthen. Investors also received a bullish second-quarter outlook that suggests demand remains healthy despite broader macroeconomic uncertainty. Onto Innovation suits investors seeking long-term AI-driven semiconductor infrastructure growth and willing to accept volatility, though valuation concerns and cyclical industry risks warrant caution.
Currently flaunting a Zacks Rank #1 (Strong Buy), ONTO seems to be a value addition for your portfolio. You can see the complete list of today’s Zacks #1 Rank stocks here.
Here are three stocks with buy rank and strong momentum characteristics for investors to consider today, May 14:
Lumentum Holdings Inc. (LITE - Free Report) : This optical and photonic products company has a Zacks Rank #1 and witnessed the Zacks Consensus Estimate for its current year earnings increasing 6.6% over the last 60 days.
Lumentum’s shares gained 83.1% over the last three months compared with the S&P 500’s advance of 8.9%. The company possesses a Momentum Score of A.
Onto Innovation Inc. (ONTO - Free Report) : This manufacturer of process control tools for optical metrology has a Zacks Rank #1 and witnessed the Zacks Consensus Estimate for its current year earnings increasing 6.5% over the last 60 days.
Onto’s shares gained 27.5% over the last three months compared with the S&P 500’s advance of 8.9%. The company possesses a Momentum Score of A.
Tapestry, Inc. (TPR - Free Report) : This lifestyle brand and accessories company has a Zacks Rank #1 and witnessed the Zacks Consensus Estimate for its current year earnings increasing 7.6% over the last 60 days.
Tapestry’s shares gained 30.4% over the last six months compared with the S&P 500’s advance of 11.5%. The company possesses a Momentum Score of A.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Learn more about the Momentum score and how it is calculated here.
Key Takeaways Onto secured a $240M HBM metrology agreement through 2027 tied to AI infrastructure demand.ONTO expects Dragonfly platform demand to rise more than 50% in 2026 versus 2025.Atlas G6 won a second logic customer as gate-all-around and DRAM adoption expands. Semiconductor equipment stocks have been among the biggest beneficiaries of the AI boom, and Onto Innovation, Inc. (ONTO - Free Report) is increasingly emerging as a compelling player in this space. The company’s flagship offerings — especially the Dragonfly G5 inspection platform and Atlas G6 metrology system — are gaining traction at a critical time when chipmakers are racing to scale advanced AI packaging and next-generation memory production.
The Dragonfly G5 is designed specifically for the increasing complexity of advanced semiconductor packaging used in AI accelerators, HBM and heterogeneous integration. Onto has secured a volume purchase agreement with an HBM customer for Dragonfly 2D and 3D bump metrology systems through 2027, valued at over $240 million, including more than $60 million for 3D systems. This agreement links Onto Innovation directly to the rapid growth of AI infrastructure, where HBM plays a vital role in enabling high-performance computing. With more than 15 applications across more than 10 customers, Dragonfly G5 has a strong growth outlook, driving both market share gains and expansion into new opportunities.
The bullish case strengthened further in April when Onto Innovation disclosed that the Dragonfly G5 had been qualified for 2.5D AI packaging applications. Management also noted that demand for the Dragonfly platform is now expected to grow more than 50% in 2026 from 2025. While Dragonfly G5 continues to capture investor focus, Atlas G6 may hold comparable long-term significance. Atlas G was selected by a second logic customer for gate-all-around metrology applications, positioning it to benefit from the semiconductor industry’s shift beyond FinFET architectures.
Adoption of Onto Innovation’s Atlas G6 is expanding across next-generation logic and DRAM applications, supported by competitive wins and new TSV metrology orders. With strength in logic, memory and improving NAND demand, the company expects advanced-nodes revenue growth of roughly 25% in 2026, outpacing broader wafer fabrication equipment (WFE) growth.
Competitive Pressure Dampening ONTO’s Growth UpsideKLA Corporation (KLAC - Free Report) is benefiting from strong demand for leading-edge logic, HBM and advanced packaging. With healthy momentum in advanced packaging management, it now expects semiconductor process control revenue in the segment to rise from about $635 million in 2025 to nearly $1 billion in 2026, far exceeding prior forecasts. KLAC expects the semiconductor industry to witness an 11% CAGR through 2030, with the WFE market reaching roughly $215 billion. As process control becomes increasingly critical, the company believes it can continue outpacing broader wafer equipment market growth. However, extended U.S. export controls on China and tariff-related uncertainties pose concerns.
Applied Materials (AMAT - Free Report) is riding on AI-driven semiconductor innovation, advanced packaging and market share gains in foundry logic. The emergence of data centers continues to be a major contributor to the company's top-line growth, with the growing demand for DRAM by cloud service providers. It is benefiting from AI-driven semiconductor advances, with leadership in GAA transistors, HBM, advanced packaging and silicon photonics expected to expand the WFE market and support long-term growth. AMAT is strengthening its advanced packaging leadership, driven by strong demand for hybrid bonding solutions, and expects the business to reach $3 billion in the coming years despite normalized HBM-related growth.
ONTO Price Performance, Valuation and EstimatesONTO’s shares have soared 178.9% in the past year, outperforming the Zacks Nanotechnology industry’s growth of 176.3% as well as the Zacks Computer and Technology sector and the S&P 500 composite’s growth of 51.5% and 30.7%, respectively.
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In terms of forward price/earnings, ONTO’s shares are trading at 36.62X, higher than the industry’s 7.24X.
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The Zacks Consensus Estimate for ONTO has moved up for both 2026 and 2027 over the past 60 days.
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Onto Innovation currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Most investors chasing artificial intelligence (AI) hype names right now are focused on big chip names. Few are thinking about the machines that make sure those chips actually work, and that gap in knowledge is exactly where Onto Innovation (ONTO +1.35%) has been compounding for half a decade.
Onto Innovation makes semiconductor process control equipment: inspection, metrology, and lithography tools that chip manufacturers use before, during, and after production to detect defects and verify quality at the nanometer scale. In a world where a single defective layer on an AI accelerator can render a $10,000 chip useless, this is an essential product.
Image source: Getty Images.
Five years of consistent execution The company's track record is grounded in numbers. Onto hit full-year revenue of $1.005 billion in 2025 (a record), capping a run of multiyear growth that has pushed shares up more than 220% since 2022. In the company's earnings release for a 52/53‑week fiscal year, the "full year 2025" revenue of about $1.005 billion is defined as covering the twelve months ended Jan. 3, 2026, which is their fiscal year 2025 rather than the strict calendar year 2025.
In the 2026 first quarter (Q1), it reported preliminary revenue of $292 million, above its own guidance range of $275 million to $285 million. Management then set Q2 2026 guidance at $320 million to $330 million -- an 8% increase above prior outlook -- and guided full-year 2026 revenue growth of more than 30%.
CEO Mike Plisinski has been consistent on the thesis for several years: Onto is not a generic equipment maker riding a broad semiconductor cycle. It is concentrated in the high-growth segments, advanced packaging, high-bandwidth memory, and advanced nodes, which are disproportionately tied to AI infrastructure spending.That positioning is a deliberate product strategy that is now translating into backlog.
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Onto's Dragonfly inspection platform is the core of the AI story. In Q4 2025, the company closed a volume purchase agreement worth more than $240 million with a leading high-bandwidth memory (HBM) manufacturer for Dragonfly 2D inspection and 3D bump metrology, running through 2027 -- a contracted revenue line that already locks in a portion of the near-term growth case.
In May 2026, the company disclosed that the next-generation Dragonfly G5, designed for 2.5D advanced AI packaging, had completed customer qualification and would ship its first units in June 2026. Management expects total Dragonfly platform demand to grow more than 50% in 2026 compared with 2025. That product ramp matters because it targets 2.5D packaging, the architecture that stitches together multiple chiplets.
Every AI cluster built around chiplet-based designs needs inspection tools capable of handling the complexity of multi-die packaging. Dragonfly G5 is built for that job, and it is just entering commercial production. Industry analysts estimate that demand for AI-specific advanced packaging inspection will grow over the next few years, and Onto is the leading independent vendor in that market.
Why the stock still has room to run Despite the 85% year-to-date move, the consensus analyst price target sits at roughly $334, against a current price near $277, implying more than 10% additional upside at the mean -- and that target has not yet been fully updated for the raised Q2 guidance or the Dragonfly G5 qualification. The company also reached its Q4 2025 operating cash-flow target ahead of schedule and is targeting a Q4 2026 operating margin above 30% -- a level that would represent meaningful expansion from today's margins.
It's important to note that Onto's customer concentration is a material risk. A large portion of its HBM revenue runs through a small number of manufacturers, and if HBM spending cools -- either from oversupply or a slowdown in AI training workloads -- order volumes could fall faster than the backlog suggests. The equipment cycle is also inherently lumpy: Onto missed its Q4 2025 EPS estimate, and a single quarter of order timing shifts can send the stock down sharply even when the long-term trajectory is intact.
Applied Materials and KLA compete across overlapping segments with deeper resources, and both are investing in advanced packaging inspection capabilities that could erode Onto's positioning over time. But Onto's structural setup is hard to argue with.
Onto Innovation has compounded for five years by doing the unglamorous work of making sure AI chips actually function. The Dragonfly G5 ramp, the $240 million HBM purchase agreement, and the 30%-plus revenue growth guidance for 2026 suggest that work is accelerating.
WILMINGTON, Mass.--(BUSINESS WIRE)---- $ONTO--Onto Innovation Inc. (NYSE: ONTO) (“Onto Innovation” or the “Company”) today announced that it intends to offer, subject to market and other conditions, $1,100,000,000 aggregate principal amount of Convertible Senior Notes due 2031 (the “Notes”), to be sold only to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”). Onto Innovation also expects to grant to.
WILMINGTON, Mass.--(BUSINESS WIRE)---- $ONTO--Onto Innovation Inc. (NYSE: ONTO) (“Onto Innovation” or the “Company”) today announced the pricing of its private offering of $1,300,000,000 aggregate principal amount of 0.00% Convertible Senior Notes due 2031 (the “Notes”) to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”). The size of the offering was increased from the previously announced $1,100,000.
Onto Innovation Inc. (NYSE: ONTO) (“Onto Innovation” or the “Company”) today announced the pricing of its private offering of $1,300,000,000 aggregate principal amount of 0.00% Convertible Senior Notes due 2031 (the “Notes”) to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”). The size of the offering was increased from the previously announced $1,100,000,000 aggregate principal amount of Notes. Onto Innovation also granted the initial purchasers of the Notes an option to purchase up to an additional $200,000,000 aggregate principal amount of the Notes, for settlement within a 13-day period beginning on, and including, the first date on which the Notes are issued. The offering of the Notes is expected to close on May 21, 2026, subject to customary closing conditions.
The Notes will have an initial conversion price of approximately $381.80 per share of Onto Innovation’s common stock, which represents a premium of approximately 50.0% to the last reported sale price of Onto Innovation’s common stock on The New York Stock Exchange (the “NYSE”) on May 18, 2026.
In connection with the pricing of the Notes, Onto Innovation entered into capped call transactions with an initial cap price of $509.06 per share of Onto Innovation’s common stock, which represents a premium of 100.0% to the last reported sale price of Onto Innovation’s common stock on the NYSE on May 18, 2026.
Onto Innovation estimates that the net proceeds from the offering will be approximately $1,274 million (or $1,470 million if the initial purchasers exercise their option to purchase additional Notes in full) after deducting the initial purchasers’ discount and commissions but before estimated offering expenses payable by it.
Onto Innovation intends to use (i) approximately $77.1 million of the net proceeds to fund the cost of entering into the capped call transactions described below, (ii) approximately $205,000,000 of the net proceeds to repurchase approximately 0.8 million shares of its common stock concurrently with the pricing of the offering in privately negotiated transactions effected with or through one of the initial purchasers or one or more of its affiliates, at a price per share equal to $254.53, the last reported sale price per share of Onto Innovation’s common stock on the NYSE on May 18, 2026 and (iii) the remaining net proceeds for general corporate purposes, which may include financing the previously announced acquisition of 27% of the issued and outstanding shares of the common stock of Rigaku Holdings Corporation.
The Notes will be Onto Innovation’s senior unsecured obligations and will mature on June 1, 2031, unless earlier converted, redeemed or repurchased. The Notes will not bear regular interest, and the principal amount of the Notes will not accrete.
Before March 1, 2031, noteholders will have the right to convert their Notes only upon the occurrence of certain events. From and after March 1, 2031, noteholders may convert their Notes at any time at their election until the close of business on the second scheduled trading day immediately before the maturity date. The initial conversion rate is 2.6192 shares of common stock per $1,000 principal amount of Notes. The conversion rate and conversion price will be subject to adjustment upon the occurrence of certain events. Onto Innovation will satisfy its conversion obligations by paying cash up to the aggregate principal amount of Notes to be converted and paying or delivering, as the case may be, cash, shares of its common stock or a combination of cash and shares of its common stock, at its election, in respect of the remainder, if any, of its conversion obligation in excess of the aggregate principal amount of the Notes being converted.
The Notes will not be redeemable before June 6, 2029. The Notes will be redeemable, in whole or in part (subject to certain limitations), for cash at Onto Innovation’s option at any time, and from time to time, on or after June 6, 2029 and before the 31st scheduled trading day immediately before the maturity date, but only if the last reported sale price per share of Onto Innovation’s common stock exceeds 130% of the conversion price for a specified period of time and certain other conditions are satisfied. The redemption price will be equal to the principal amount of the Notes to be redeemed, plus accrued and unpaid special and additional interest, if any, to, but excluding, the redemption date. In addition, upon a notice of redemption, Onto Innovation will, under certain circumstances, increase the conversion rate for noteholders who convert Notes in connection with such notice of redemption.
If a “fundamental change” (as defined in the indenture for the Notes) occurs, then, subject to a limited exception, noteholders may require Onto Innovation to repurchase their Notes for cash. The repurchase price will be equal to the principal amount of the Notes to be repurchased, plus accrued and unpaid special and additional interest, if any, to, but excluding, the applicable repurchase date. In addition, upon certain corporate events, Onto Innovation will, under certain circumstances, increase the conversion rate for noteholders who convert Notes in connection with such a corporate event.
Capped Call
In connection with the pricing of the Notes, Onto Innovation entered into privately negotiated capped call transactions with certain financial institutions, including one or more of the initial purchasers (the “option counterparties”). The capped call transactions cover, subject to anti-dilution adjustments substantially similar to those applicable to the Notes, the number of shares of Onto Innovation’s common stock initially underlying the Notes. If the initial purchasers exercise their option to purchase additional Notes, then Onto Innovation expects to enter into additional capped call transactions with the option counterparties. The capped call transactions are expected generally to reduce the potential dilution to Onto Innovation’s common stock upon any conversion of the Notes and/or offset any potential cash payments Onto Innovation is required to make in excess of the principal amount of converted Notes, as the case may be, with such reduction and/or offset subject to a cap. The cap price of the capped call transactions will initially be $509.06, which represents a premium of 100.0% over the last reported sale price of Onto Innovation’s common stock of $254.53 per share on the New York Stock Exchange on May 18, 2026, and is subject to certain adjustments under the terms of the capped call transactions.
Onto Innovation has been advised that, in connection with establishing their initial hedges of the capped call transactions, the option counterparties or their respective affiliates expect to purchase shares of Onto Innovation’s common stock and/or enter into various derivative transactions with respect to Onto Innovation’s common stock concurrently with or shortly after the pricing of the Notes. This activity could increase (or reduce the size of any decrease in) the market price of Onto Innovation’s common stock or the Notes at that time. In addition, the option counterparties or their respective affiliates may modify their hedge positions by entering into or unwinding various derivatives with respect to Onto Innovation’s common stock and/or purchasing or selling Onto Innovation’s common stock or other securities issued by Onto Innovation in secondary market transactions following the pricing of the Notes and prior to the maturity of the Notes (and (x) are likely to do so during any averaging period related to a conversion of the Notes, following any redemption of the Notes by Onto Innovation or following any repurchase of the Notes by Onto Innovation in connection with any fundamental change and (y) are likely to do so following any repurchase of the Notes by Onto Innovation other than in connection with any such redemption or any such fundamental change if Onto Innovation elects to unwind a corresponding portion of the capped call transactions in connection with such repurchase). This activity could also cause or avoid an increase or a decrease in the market price of Onto Innovation’s common stock or the Notes, which could affect a noteholder’s ability to convert the Notes and, to the extent the activity occurs during any averaging period related to a conversion of the Notes, it could affect the number of shares of Onto Innovation’s common stock and value of the consideration that a noteholder will receive upon conversion of the Notes.
In addition, if any such capped call transaction fails to become effective, whether or not the offering of the Notes is completed, the option counterparty party thereto may unwind its hedge positions with respect to Onto Innovation’s common stock, which could adversely affect the value of Onto Innovation’s common stock and, if the Notes have been issued, the value of the Notes.
Share Repurchases
The concurrent repurchases of approximately $205,000,000 of shares of Onto Innovation’s common stock described above may have resulted in the common stock trading at prices that are higher than would be the case in the absence of these repurchases, which may have resulted in a higher initial conversion price for the Notes.
Notices
The Notes will be offered and sold only to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act. The Notes and any shares of Onto Innovation’s common stock issuable upon conversion of the Notes have not been registered under the Securities Act, or under the securities laws of any state or other jurisdiction, and the Notes and any such shares may not be offered or sold except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and the applicable securities laws of any state or other jurisdiction.
This press release does not constitute an offer to sell or a solicitation of an offer to buy the Notes or any shares of Onto Innovation’s common stock issuable upon conversion of the Notes, nor shall there be any offer, solicitation or sale of any Notes or any such shares of Onto Innovation’s common stock issuable upon conversion of the Notes in any jurisdiction in which such offer, solicitation or sale would be unlawful.
About Onto Innovation Inc.
Onto Innovation is a leader in process control, combining global scale with an expanded portfolio of leading-edge technologies that includes un-patterned wafer quality, 3D metrology spanning chip features from nanometer scale transistors to large die interconnects, macro defect inspection of wafers and packages, metal interconnect composition, factory analytics, and lithography for advanced semiconductor packaging.
Our breadth of offerings across the entire semiconductor value chain helps our customers solve their most difficult yield, device performance, quality, and reliability issues. Onto Innovation strives to optimize customers’ critical path of progress by making them smarter, faster and more efficient.
Headquartered in Wilmington, Massachusetts, Onto Innovation supports customers with a worldwide sales and service organization.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (the “Act”) which include statements relating to the timing, size and completion of the proposed Notes offering, the intended use of proceeds, including the capped call transactions and the share repurchase, the terms of the Notes being offered and the anticipated terms of, and the effects of entering into, the share repurchase and the capped call transactions and the actions of the option counterparties and their respective affiliates, as well as other matters that are not purely historical data. Onto Innovation wishes to take advantage of the “safe harbor” provided for by the Act and cautions that actual results may differ materially from those projected as a result of various factors, including risks and uncertainties, many of which are beyond Onto Innovation’s control. Such factors include, but are not limited to, the Company’s ability to leverage its resources to improve its position in its core markets; its ability to weather difficult economic environments; its ability to open new market opportunities and target high-margin markets; the strength/weakness of the back-end and/or front-end semiconductor market segments; fluctuations in customer capital spending; the Company’s ability to effectively manage its supply chain and adequately source components from suppliers to meet customer demand; the effects of political, economic, legal, and regulatory changes, including tariffs and trade disputes, or conflicts on the Company's global operations; its ability to adequately protect its intellectual property rights and maintain data security; the effects of natural disasters or public health emergencies on the global economy and on the Company’s customers, suppliers, employees, and business; its ability to effectively maneuver global trade issues and changes in trade and export regulations, tariffs and license policies; the Company’s ability to maintain relationships with its customers and manage appropriate levels of inventory to meet customer demands; the Company's ability to realize the anticipated benefits of the proposed Notes offering and the capped call transactions on the timing expected or at all; and the Company’s ability to successfully integrate acquired businesses and technologies. You should be aware that these statements and any other forward-looking statements in this press release reflect only Onto Innovation’s expectations and are not guarantees of performance or any particular outcome. Additional information and considerations regarding the risks faced by Onto Innovation are available in Onto Innovation’s Form 10-K for the fiscal year ended January 3, 2026, as filed with the SEC on February 24, 2026, and its Quarterly Report on Form 10-Q for the quarter ended March 31, 2026 as filed with the SEC on May 5, 2026. As the forward-looking statements are based on Onto Innovation's current expectations, the Company cannot guarantee any related future results, levels of activity, performance or achievements. Onto Innovation does not assume any obligation to update the forward-looking information contained in this press release, except as required by law.
Source: Onto Innovation Inc.
ONTO-I
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WILMINGTON, Mass.--(BUSINESS WIRE)---- $ONTO--Onto Innovation Inc. (NYSE: ONTO) (“Onto Innovation,” “Onto,” or the “Company”) today announced that its senior management team will participate in the following upcoming investor events: B. Riley Securities 26th Annual Institutional Investor Conference at the Ritz Carlton in Marina Del Ray, California, on May 21. TD Cowen 54th Annual Technology, Media & Telecom Conference at the InterContinental New York Barclay, New York, New York, on May 27. Evercore 2.
Here are three stocks with buy rank and strong momentum characteristics for investors to consider today, May 21:
Onto Innovation Inc. (ONTO - Free Report) : This semiconductor equipment company has a Zacks Rank #1 and witnessed the Zacks Consensus Estimate for its current year earnings increasing 6.6% over the last 60 days.
Onto Innovation's shares gained 23.4% over the last three months compared with the S&P 500’s decline of 7.9%. The company possesses a Momentum Score of A.
Flywire Corporation (FLYW - Free Report) : This fintech company has a Zacks Rank #1 and witnessed the Zacks Consensus Estimate for its current year earnings increasing 17.7% over the last 60 days.
Flywire’s shares gained 49.5% over the last three months compared with the S&P 500’s decline of 7.9%. The company possesses a Momentum Score of A.
Green Plains Inc. (GPRE - Free Report) : This low-carbon fuels company has a Zacks Rank #1 and witnessed the Zacks Consensus Estimate for its current year earnings increasing 337.5% over the last 60 days.
Green Plains’s shares gained 13.0% over the last three months compared with the S&P 500’s decline of 7.9%. The company possesses a Momentum Score of B.
See the full list of top ranked stocks here
Learn more about the Momentum score and how it is calculated here.
Key Takeaways ONTO benefits from AI-driven packaging demand, with advanced packaging revenue expected to rise 50% in 2026.ONTO secured a $240M Dragonfly volume agreement through 2027, expanding AI infrastructure exposure.NVMI gains from strong HBM and DRAM demand, but faces customer concentration and supply-chain risks. The semiconductor industry is entering a major growth cycle, fueled by AI, high-performance computing (HPC), advanced packaging and next-generation memory technologies. As chipmakers race to produce smaller, faster and more complex semiconductors, the demand for inspection and metrology equipment has surged. Two companies at the center of this trend are Onto Innovation, Inc. (ONTO - Free Report) and Nova Ltd. (NVMI - Free Report) .
Per a report from Fortune Business Insights, the global semiconductor metrology and inspection equipment market size is estimated to go from $15.84 billion in 2026 to $27.56 billion by 2034, at a CAGR of 7.2%. Both companies specialize in semiconductor process control solutions, a critical category that helps manufacturers detect defects, improve yields and optimize advanced chip production.
Modern semiconductor manufacturing demands extreme precision, as even microscopic defects can render advanced AI chips unusable. Process control companies like Onto Innovation and Nova help chipmakers detect defects, improve yields, strengthen process control, support advanced packaging and boost production efficiency. As chip complexity increases, spending on inspection and metrology tools is growing faster than overall semiconductor capital expenditures, creating a strong tailwind for both companies. As both companies benefit from industry tailwinds, investors are asking which stock is likely to generate greater shareholder value in the years ahead.
Here’s a detailed comparison of the two semiconductor equipment players.
The Case for ONTOOnto Innovation has become a major supplier in the semiconductor industry for inspection, metrology and lithography solutions. It emphasizes advanced packaging and heterogeneous integration, technologies that are increasingly vital in the AI era. AI accelerators from companies like NVIDIA and Advanced Micro Devices depend on sophisticated chip packaging to boost performance and energy efficiency. ONTO’s Dragonfly inspection systems and Atlas packaging platforms are experiencing strong demand because they help manufacturers manage the complexity of advanced chip stacking and packaging. This positions Onto Innovation to benefit from one of the fastest-growing segments in the semiconductor industry.
Onto Innovation’s new Atlas G6 is gaining traction in gate-all-around and HBM4 DRAM applications, while record films and integrated metrology revenues reflect expanding adoption across both memory and leading-edge logic customers. The company expects the momentum to accelerate in the second half of 2026, supported by capacity expansions, rising backlog and broader product adoption, driving more than 15% sequential revenue growth. Management forecasts revenue growth above 30% for the year, fueled by AI infrastructure, HPC and silicon photonics demand. Its expanding optical process-control portfolio, strengthened by the Rigaku partnership, further enhances long-term growth prospects.
The Dragonfly platform is becoming a major growth driver for Onto Innovation. The company secured a volume purchase agreement worth more than $240 million through 2027 with an HBM customer, strengthening its exposure to the rapidly expanding AI infrastructure market. Dragonfly G5 also achieved qualification at a leading 2.5D logic customer, while strong demand for its high-throughput 3D inspection technology has fueled broader adoption across memory, logic and OSAT customers. With a growing pipeline, accelerating interest in panel-level packaging and JetStep qualifications at key AI packaging suppliers, Onto Innovation expects advanced packaging revenue to increase more than 50% in 2026.
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ONTO continues to expand its process-control portfolio through strategic acquisitions and partnerships. Its planned $710 million investment in Rigaku Holdings Corporation provides access to advanced X-ray technologies that complement its inspection and metrology offerings, while the earlier Semilab USA acquisition strengthened capabilities in contamination monitoring, materials analysis and surface charge metrology. Management expects the Rigaku partnership to drive earnings through high-margin software licensing, increased metrology tool sales and dividend income, while broadening Onto Innovation’s ability to address increasingly complex semiconductor manufacturing challenges and create new long-term revenue opportunities.
Despite its strengths, Onto Innovation faces several challenges. Semiconductor capital expenditures can fluctuate sharply. A slowdown in wafer fabrication spending could pressure equipment orders for Onto Innovation as it competes against larger semiconductor equipment companies, wherein maintaining a strong technological hold requires constant innovation. Moreover, it faces notable customer concentration risk, with its top three customers accounting for 49% of 2025 revenue. Operating in the capital-intensive semiconductor industry, the company is also highly exposed to geopolitical uncertainties in Asia, where disruptions could adversely impact revenue and cash flow. Management has noted supply chain woes, particularly in precision optics, as an ongoing challenge.
The Case for NVMIOperationally, Nova faces supply-chain and manufacturing risks. The company relies on a limited number of suppliers, including sole-source vendors for certain components, and operates key product lines from single manufacturing facilities. Disruptions caused by natural disasters, geopolitical events, labor shortages, component shortages or supplier issues could impair production and delay deliveries. Like many semiconductor equipment firms, Nova relies heavily on a limited number of large customers. Reduced spending from one major client could adversely impact revenue growth.
The company also operates in the highly cyclical semiconductor capital-equipment market, where customer spending is closely tied to wafer-fab investment cycles. Competitive pressures from larger rivals such as ONTO and emerging Chinese suppliers could erode market share if Nova fails to keep pace with technological advances or customer requirements. Nova remains smaller than many semiconductor equipment competitors, limiting research spending capacity, market reach and competitive pricing power.
As an Israel-based company with significant operations and customers across Asia, Nova faces risks from regional conflicts, trade disputes, geopolitical tensions involving China and Taiwan, export restrictions and broader global economic instability. U.S. and international export-control regulations targeting advanced semiconductor technologies could further limit sales opportunities in China, while tariffs, sanctions and supply-chain disruptions may pressure demand and profitability.
Nova is also exposed to technology, cybersecurity and intellectual-property risks. Cyberattacks, data breaches or system disruptions could damage operations, finances and reputation. The company must continually protect its intellectual property while navigating patent expirations, infringement claims and litigation risks. At the same time, rapid adoption of AI technologies and open-source software introduces additional legal, security and competitive uncertainties. Regulatory compliance requirements related to environmental standards, ESG disclosures, export controls and international operations could further increase costs and complexity.
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Nonetheless, memory market strength continues to fuel demand for Nova. It is benefiting from strong demand for advanced DRAM and HBM technologies, which are critical to AI-driven computing infrastructure. As hyperscalers and AI chipmakers deploy more powerful processors, the need for precise process control is increasing. Nova’s optical, chemical and materials metrology solutions help semiconductor manufacturers improve yields, reduce defects and optimize production, positioning it to capitalize on growing AI-related memory investments. Nova’s Metrion platform is gaining adoption across advanced memory and logic manufacturing due to rising demand for sophisticated metrology solutions at leading-edge nodes. This strengthens its position in AI, HPC and advanced memory markets as well as competitiveness in semiconductor process control.
Share Performance Trajectory for ONTO & NVMIIn the past six months, ONTO stock has surged 86.7% while NVMI has gained 63.6%.
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Valuation: Discount vs. PremiumValuation often becomes the deciding factor for investors. In terms of forward price/earnings, ONTO shares are trading at 34.36X, lower than NVMI’s 49.12X.
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How the Zacks Consensus Estimate Compares for ONTO & NVMIEarnings estimates for ONTO have moved up for both 2026 and 2027 over the past 60 days.
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For NVMI, estimates for the current year earnings have been slightly revised downward over the past 60 days.
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ONTO vs. NVMI:Which Stock Has More Upside?Onto Innovation is well-positioned to benefit from the AI-driven advanced packaging boom through its strong exposure to AI infrastructure, diversified customer base, solid cash generation and growing packaging demand. If AI chip adoption remains robust, these trends could support sustained revenue and earnings growth.
Nova offers investors focused exposure to advanced metrology and leading-edge process control, positioning it to benefit as increasing chip complexity drives higher metrology intensity. However, its smaller scale relative to larger semiconductor equipment peers may limit R&D investment, market reach and pricing power. In addition, the company relies on a concentrated customer base, making revenue growth vulnerable to spending reductions by a few major customers.
Both Onto Innovation and Nova are attractive semiconductor equipment companies benefiting from long-term industry trends. However, Onto Innovation currently appears to have the stronger overall upside profile because of its leadership in advanced packaging, strong AI exposure, diversified end-market presence and greater scale and cash generation.
ONTO currently sports a Zacks Rank #1 (Strong Buy), while NVMI carries a Zacks Rank #4 (Sell). Ultimately, in terms of Zacks rank and valuations, Onto Innovation seems to represent the more balanced investment opportunity. You can see the complete list of today’s Zacks #1 Rank stocks here.
On May 26, 2026, Onto Innovation Inc ONTO shares rose 4.5%, bringing the current price to $274.17. The stock has seen significant volatility over the past year, with a 52-week range showing a high of $316.00 and a low of $89.40.
GF Value™ verdict: Current price is $274.17, which is 49.0% above the GF Value™ of $183.96.GF Score™ of 89/100 indicates a strong ranking, suggesting potential for good long-term returns.Most notable signal: No insider transactions in the last 3 months, indicating stability in insider confidence. Is ONTO Overvalued or Undervalued? According to GF Value™, Onto Innovation Inc is currently significantly overvalued, with the current share price of $274.17 being 49.0% higher than the estimated fair value of $183.96. This overvaluation suggests that there may be a lack of margin of safety for investors, as the market price is substantially above intrinsic value. A stock trading above its GF Value™ can pose risks, especially if market conditions change or if company performance does not meet high investor expectations.
GF Value™ is GuruFocus' proprietary measure of intrinsic value, calculated from historical trading multiples, past business growth, and future performance estimates. Given that ONTO is deemed overvalued, potential investors might want to exercise caution, as a correction could occur if the stock price does not align closer to its fair value.
How Does ONTO's Valuation Compare to Its History? Metric Current Historical P/E (TTM) 128.1x 36.6x Forward P/E 38.5x N/A The current P/E (TTM) of 128.1x significantly exceeds its 5-year median P/E of 36.6x, indicating that the stock is trading at a premium compared to its historical valuation. The forward P/E of 38.5x also suggests that the market anticipates further earnings growth, but this analysis aligns with the GF Value™ verdict of being overvalued. Therefore, the P/E analysis confirms the assessment of overvaluation indicated by GF Value™.
What Does ONTO's GF Score™ Tell Us? Metric Rating GF Score™ 89/100 Financial Strength 8/10 Profitability 8/10 Growth 9/10 Valuation 5/10 Momentum 6/10 The GF Score™ of 89/100 is an impressive rating, indicating strong financial health and growth potential. The strongest areas for Onto Innovation Inc are its Growth rank of 9/10 and Financial Strength rank of 8/10, reflecting a solid operational foundation and robust business prospects. However, the Valuation rank of 5/10 indicates that the stock may not be a good value at its current price, aligning with the previous assessment of overvaluation.
What Are Insiders Doing with ONTO Stock? In the last three months, there have been no insider transactions reported for Onto Innovation Inc. This lack of activity may suggest that insiders are confident in the company’s current standing and future prospects, or it could indicate a period of stability where insiders do not see an immediate need to buy or sell shares.
What This Means for Investors Based on the analysis of GF Value™, Onto Innovation Inc is currently overvalued. With a significant premium over its estimated fair value, potential investors may want to consider the risks involved before making any investment decisions.
For the complete analysis, visit the Onto Innovation Inc ONTO stock page. You can also explore the GF Value™ page for detailed valuation methodology, or use the GuruFocus Stock Screener to find similar opportunities.
Frequently Asked Questions What is ONTO's GF Score™?
ONTO has a GF Score™ of 89/100, indicating a strong overall ranking based on financial strength, profitability, growth, valuation, and momentum.
Is ONTO overvalued or undervalued?
ONTO is currently overvalued, with a GF Value™ of $183.96 compared to its market price of $274.17, representing a significant premium.
What is ONTO's P/E ratio?
ONTO's P/E (TTM) ratio is 128.1x, which is considerably higher than its 5-year median of 36.6x, indicating that the stock is trading at a historical premium.
This stock alert was generated using automated technology and GuruFocus financial data to provide readers with timely and accurate market reporting. This content was reviewed by GuruFocus editorial team prior to publication. Please send any questions or comments about this story to [email protected].
Key Takeaways ONTO expects 2026 revenues above $1.3B, implying more than 30% growth on AI-driven demand.ONTO posted Q1 revenues of $291.9M; Q2 guided at $320M-$330M as backlog and new products ramp.ONTO sees advanced packaging up over 50% and advanced nodes nearly 25% in 2026, helped by Atlas G6 uptake. Onto Innovation (ONTO - Free Report) expects to deliver more than 30% revenue growth in 2026, putting the number above $1.3 billion, driven by strong demand tied to artificial intelligence (“AI”) and advanced semiconductor technologies. Management noted that there is “insatiable end market demand” for high-performance computing and supporting process technologies.
Strong start to the year lends credibility to this forecast. For the first quarter of 2026, revenues were $291.9 million, up 9.5% year over year and nearly 10% sequentially. Customer adoption of the company’s latest systems, including the Dragonfly G5 and Atlas G6 platforms, has been promising.
Continued growth is expected in the second quarter, with revenues projected between $320 million and $330 million, representing roughly 28% year-over-year growth at the midpoint. Management expects 15% sequential growth in the second half of the year, supported by expanding backlog and increasing uptake of new products.
Image Source: Zacks Investment Research
Advanced packaging is expected to grow more than 50% in 2026, while the advanced nodes business is projected to expand nearly 25%, benefiting from strong DRAM demand and increased adoption of the Atlas G6 platform. These segment-level tailwinds reinforce the broader company growth outlook.
Over the long term, strategic initiatives such as its collaboration with Rigaku bode well. The company is acquiring a 27% stake for about $710 million, with the deal expected to close in the second half of 2026. The partnership expands Onto’s access to advanced X-ray technologies, enhancing its semiconductor inspection and metrology capabilities, and includes the right to appoint a board member. Along with its earlier acquisition of Semilab USA, the move underscores Onto’s strategy to broaden its process control ecosystem and support long-term growth.
However, execution will be key. The company acknowledged headwinds from higher material, fuel and shipping costs, along with investments in R&D.
Mapping the Competitive TerrainKLA Corporation (KLAC - Free Report) reported third-quarter fiscal 2026 revenues of $3.42 billion, up 11% year over year. Higher investments in foundry/logic and high-bandwidth memory are emerging as key tailwinds. KLAC estimates wafer-fab equipment spending to exceed $140 billion in 2026, with 2027 growth expected to be even stronger than 2026.
KLA expects sequential revenue increase throughout 2026 and forecasts high-teens year-over-year growth for the semiconductor process-control systems business, which is expected to rise more than 20%. The company also emphasized strong momentum in advanced packaging. KLAC now expects advanced packaging process-control revenues to be nearly $1 billion in 2026, from around $635 million in 2025.
Nova Ltd (NVMI - Free Report) first-quarter 2026 revenues rose 10% year over year to $235.3 million. Memory was a key contributor, with revenues from advanced DRAM applications accounting for roughly two-thirds of its memory business. Nova also added that it witnessed strong adoption of its Metrion platform across advanced DRAM and 3D NAND, alongside record sales for the chemical metrology products.
For the second quarter, Nova guided revenues to $245-$255 million. The company said it remains focused on investing in R&D, manufacturing capacity and infrastructure to support anticipated customer demand.
ONTO Price Performance, Valuation and EstimatesONTO’s shares have soared 73.7% year to date, underperforming the Zacks Nanotechnology industry’s growth of 79.1%.
Image Source: Zacks Investment Research
In terms of forward price/earnings, ONTO’s shares are trading at 35.89X, higher than the industry’s 7.12X.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for ONTO has moved up for both 2026 and 2027 over the past 60 days.
Image Source: Zacks Investment Research
Onto Innovation currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Everyone’s chasing obvious AI semiconductor names. NVIDIA (NASDAQ:NVDA | NVDA Price Prediction) sits at a $5.15 trillion market cap. Taiwan Semiconductor Manufacturing (NYSE:TSM) is up 39% year to date. And Micron Technology (NASDAQ:MU) just crossed $1 trillion in market cap, joining SK Hynix and Samsung in a memory club that suddenly looks unkillable.
On a recent episode of The AI Investor Podcast, Eric Bleeker and Austin Smith argued the better trade is the company selling picks and shovels to every memory fab on the planet, up 91% in just 2.5 months. Here is the case.
The $1 Trillion Memory Backdrop Micron’s fiscal Q1 2026 report set records across the board. Revenue of $13.64 billion, up 57% year over year. The Cloud Memory unit nearly doubled to $5.28 billion with a 66% gross margin and 55% operating margin. Q2 guidance is $18.70 billion with a 68% non-GAAP gross margin.
Bleeker on the podcast: “Memory, Micron, SK Hynix, Samsung, they’re all over a trillion dollars right now because they’re getting 80% margins. There are companies that could go back down to 60% and these companies still win in a big way.” The supercycle is real. The question is how to position without paying for stocks that have already tripled.
ACM Research: 91% in 2.5 Months The AI Investor Podcast recommended ACM Research (NASDAQ:ACMR) on March 13. The stock has climbed from $46.38 to $88.64 since, up 125% year to date.
ACM supplies cleaning, electroplating, furnace, and advanced packaging tools to YMTC and CXMT, the two Chinese memory makers building domestic capacity. Bleeker called the company “a great company that’s really rock solid and is positioned in an ideal place.” His view on the build cycle: “China can’t build enough memory for itself, let alone to flood the Western market.”
Q1 2026 revenue came in at $231 million, up 34% year over year, with total shipments of $241 million, up 54%. Management maintained full-year guidance of $1.08 billion to $1.18 billion, or 21% to 30% growth and reaffirmed a $4 billion long-term revenue target. The ECP segment nearly tripled to $84 million, driven by advanced packaging adoption.
The regulatory moat matters here. China lacks access to EUV lithography systems for sub-5nm production, so the AI build happens through the layers ACMR serves: cleaning, plating, 3D packaging. That is a multi-year capex tailwind independent of any single customer hitting targets.
Onto Innovation: The Advanced Packaging Angle Onto Innovation (NYSE:ONTO) is the second leg of the trade, up 19% since late February. Onto makes metrology and inspection tools for advanced packaging, where innovation is moving as HBM stacks grow taller and 3D integration replaces traditional node shrinks. Q4 2025 set a record at $267 million, with Q1 2026 guidance of $275 to $285 million and an HBM-related volume agreement worth over $240 million through 2027.
The Old Tech Premium Austin Smith raised a wrinkle worth flagging. In a chip-starved world, any chip could be put to use. He pointed to legacy CPU inventory as evidence that old tech can command a premium. GlobalFoundries (NASDAQ:GFS) is up 132%.
The surprise: United Microelectronics (NYSE:UMC), a Taiwanese fab focused on older nodes, is up 183% year to date, outpacing Taiwan Semi. Bleeker on the podcast: “In a perverse way, buying the stuff with the older facilities has outperformed Taiwan Semiconductor this year.” Many ways to win.
What I’m Watching I have followed the semi cycle for over a decade and the lesson keeps repeating. When obvious names go vertical, second-derivative plays often have more runway. Bleeker’s read is that equipment makers like ACM Research and Onto Innovation have not run up like memory and GPU names. If Micron’s order book signals anything, the supercycle stretches into 2027, and that gap could close.
You should weigh ACMR if you believe Chinese memory capacity has years left to build. You should pass if tariff escalation or a memory glut arrives before YMTC and CXMT finish their fabs. Either way, the trillion-dollar memory club is no longer the whole story.
Jim Cramer called it “the greatest time in the history of the industry” on Mad Money Thursday night, and the data is screaming the same thing: Applied Materials (NASDAQ:AMAT | AMAT Price Prediction) is up 75% year to date as the AI data center buildout has triggered shortages across every node, every fab, and every piece of capital equipment that touches a wafer. The five names below are the toll collectors of that buildout, and waiting for a pullback has been the most expensive trade of 2026.
1. Onto Innovation: The Metrology Sleeper Nobody Is Pricing Right Start with the name nobody at your office mentions. Onto Innovation (NYSE:ONTO) sells the metrology and inspection tools that verify every micro-bump on a high-bandwidth memory stack. Every HBM cube glued onto an NVIDIA Blackwell GPU passes through Onto’s Dragonfly platform before it ships. That is the chokepoint of AI accelerator packaging, and it is the part of the supply chain analysts still underweight.
Q4 2025 was a record at $266.87 million in revenue, but the real catalyst is the volume purchase agreement worth more than $240 million with a leading HBM manufacturer running through 2027. CEO Mike Plisinski said “global AI investment fueling a robust upcycle in semiconductor capital equipment spending” reinforces confidence in outgrowing the broader equipment market in 2026 and beyond, and a cash pile of $639.6 million, up over 200% year over year, gives them dry powder for the next bolt-on.
Onto is up 64% YTD and still carries a roughly $13 billion market cap. That is a rounding error next to the next name on the list, which actually builds the machines carving the trenches Onto inspects.
2. Lam Research: The Etch and Deposition Cash Machine If HBM is the AI memory of choice, Lam Research (NASDAQ:LRCX) is the company physically stacking it. Lam dominates etch and deposition, the two process steps that build the vertical 3D NAND and DRAM structures HBM requires. Every fresh HBM3E and HBM4 capacity announcement from SK hynix, Micron, or Samsung translates into Lam orders.
The March quarter delivered revenue of $5.84 billion, up 23.76% year over year, with non-GAAP EPS of $1.47 beating the $1.36 consensus, the fourth straight earnings beat. Guidance for the June quarter calls for roughly $6.60 billion in revenue, a sequential acceleration that does not happen at a cyclical peak. CEO Tim Archer said “AI-driven demand reshapes the semiconductor industry”, and the 86% YTD move says the market believes him.
Lam is the obvious memory torque trade. The next stock is even more obvious, and it is the one Cramer is pounding the table on.
3. Applied Materials: Cramer’s Stock and Dickerson’s Victory Lap This is the one. AMAT touches more steps in chip fabrication than any other equipment vendor on Earth, and on Mad Money Thursday CEO Gary Dickerson sat across from Cramer and told him “AI is driving incredible computing demand” and “token demand is up like 3x in the last few months”. Cramer noted Dickerson had returned 2,897% for shareholders over his tenure. That is the kind of compounding that happens once a career.
The Q2 FY2026 report backed every word: revenue of $7.91 billion, up 11.4% year over year, non-GAAP EPS of $2.86 against a $2.66 consensus, and management raising its calendar 2026 semiconductor equipment growth outlook from over 20% to more than 30%. Dickerson told Cramer “you’re nowhere near able to meet the demand” even after doubling operational capacity. I have been watching Applied for the better part of a decade, and I have never seen a CEO speak with this much forward visibility on the order book.
The stock is up 180% over the past year. The next name has even fatter margins and arguably an even better moat.
4. KLA: The Toll Collector With Software Margins KLA (NASDAQ:KLAC) owns process control. Roughly 90% of revenue comes from one segment, semiconductor process control, where KLA holds a near-monopoly share. Every wafer at every leading-edge fab gets inspected with a KLA tool. It is the unkillable subscription of semiconductor capex, and the margins prove it.
The March quarter delivered revenue of $3.42 billion with non-GAAP EPS of $9.40 beating the $9.15 consensus, and June quarter guidance calls for non-GAAP gross margin of roughly 62%. Management approved the 17th consecutive annual dividend increase alongside an additional $7 billion buyback authorization. CEO Rick Wallace said KLA is “a key enabler of the AI ecosystem” across foundry/logic, memory, advanced packaging, and services.
KLA is up 59% YTD and trades like a software company because it operates like one. But there is one name that sits a level above even KLA, and without it, none of the supercycle exists.
5. ASML: The Gatekeeper of the Entire Supercycle ASML (NASDAQ:ASML) is the only company on Earth that makes EUV and High NA EUV lithography systems. Every 3nm and 2nm logic chip, every leading-edge HBM die, every NVIDIA, AMD, and Broadcom AI accelerator currently shipping passes through an ASML machine. There is no second source. There is no workaround. If TSMC, Samsung, or Intel wants to build a leading-edge fab, they fly to Veldhoven and get in line.
Q1 2026 delivered revenue of $10.34 billion at a 53.0% gross margin, and management raised the full-year outlook to €36 billion to €40 billion. The 2030 model targets €44 billion to €60 billion in revenue at 56% to 60% gross margin, and the year-end backlog already sits at $45.06 billion. CEO Christophe Fouquet said “demand for chips is outpacing supply” and customers are accelerating capacity expansion plans backed by long-term agreements with their own customers.
ASML is up 51% YTD. It is the single most important industrial company in the world, and the market is just starting to price it that way.
The Setup Onto inspects what Lam etches, Applied deposits, KLA measures, and ASML patterns. Every link in that chain is sold out into 2027. Dickerson told Cramer “this inflection is going to go on for a very long time”. The longer you wait for a clean entry, the more YTD moves like AMAT’s 75% you will be paying up for.
On June 02, 2026, Onto Innovation Inc ONTO shares rose 8.7% today, bringing the current price to $278.02. This price is within a 52-week range of $89.40 to $316.00, showing significant volatility over the past year.
GF Value™ verdict: Current price is $278.02 vs GF Value™ of $185.60, indicating the stock is 49.8% overvalued.GF Score™ of 88/100, signaling a strong overall performance across key metrics.Most notable signal: No insider transactions in the last 3 months, suggesting stability in management actions. Is ONTO Overvalued or Undervalued? The current price of Onto Innovation Inc ONTO is $278.02, which is significantly above the GF Value™ estimate of $185.60. This represents a 49.8% overvaluation, indicating that the stock may not provide a margin of safety for potential investors. The GF Valuation label classifies ONTO as significantly overvalued, which poses risks for those considering entry at this price level.
GF Value™ is GuruFocus' proprietary measure of intrinsic value, calculated from historical trading multiples, past business growth, and future performance estimates. The substantial difference between the market price and the calculated intrinsic value suggests that ONTO shares may be subject to correction, especially if market sentiment shifts or if the company does not deliver on growth expectations.
How Does ONTO's Valuation Compare to Its History? Metric Current Historical P/E (TTM) 129.9x 36.6x Forward P/E 39.0x - With a current P/E (TTM) of 129.9x, ONTO is trading at a level that is 255% above its 5-year median P/E of 36.6x, indicating that the stock is significantly overvalued compared to its historical valuation metrics. The forward P/E of 39.0x also suggests that even projected earnings do not justify the high current price, which aligns with the overvaluation indicated by the GF Value™ analysis.
What Does ONTO's GF Score™ Tell Us? Metric Rating GF Score™ 88 Financial Strength 8/10 Profitability 8/10 Growth 9/10 Valuation 5/10 Momentum 6/10 ONT's GF Score™ of 88/100 reflects a strong performance in several key areas, particularly in growth (9/10) and financial strength (8/10). However, the valuation rank of 5/10 indicates that the stock may not be attractively priced at its current level. The weakest area is the valuation, which is consistent with the concerns raised by the GF Value™ assessment.
What Are Insiders Doing with ONTO Stock? In the last three months, there have been no insider transactions reported for Onto Innovation Inc. This lack of activity could suggest that insiders are either confident in the company's current valuation and strategy or are waiting for clearer signals before making trades. When insiders are inactive, it may imply a wait-and-see approach regarding the company's future performance.
What This Means for Investors Based on the analysis of GF Value™, Onto Innovation Inc ONTO is currently considered overvalued. The significant gap between the current price and the intrinsic value suggests caution for potential investors who may be considering entry points at these elevated levels.
For the complete analysis, visit the Onto Innovation Inc ONTO stock page. You can also explore the GF Value™ page for detailed valuation methodology, or use the GuruFocus Stock Screener to find similar opportunities.
Frequently Asked Questions What is ONTO's GF Score™?
ONTO's GF Score™ is 88/100, indicating that it has strong performance across key metrics, which has historically correlated with higher long-term returns.
Is ONTO overvalued or undervalued?
ONTO is considered overvalued, with a current price of $278.02 compared to a GF Value™ of $185.60, indicating a significant margin of overvaluation.
What is ONTO's P/E ratio?
ONTO's P/E (TTM) is 129.9x, which is significantly above its 5-year median P/E of 36.6x, confirming that the stock is trading at a much higher valuation compared to its historical norms.
This stock alert was generated using automated technology and GuruFocus financial data to provide readers with timely and accurate market reporting. This content was reviewed by GuruFocus editorial team prior to publication. Please send any questions or comments about this story to [email protected].
A month has gone by since the last earnings report for Onto Innovation (ONTO - Free Report) . Shares have lost about 4.8% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Onto Innovation due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Onto Innovation Q1 Earnings Beat EstimatesOnto Innovation reported first-quarter 2026 earnings per share of $1.42, which beat the Zacks Consensus Estimate by 2.9%. The bottom line compared unfavorably with the prior-year quarter's $1.51. Management expected non-GAAP earnings per share to be between $1.26 and $1.36.
Onto Innovation reported quarterly revenue of $291.9 million, reflecting a 9.5% increase year over year and nearly 10% sequential growth led by rising customer investments in advanced semiconductor manufacturing. The growth was primarily driven by the increased adoption of its inspection and metrology platforms among top logic and memory manufacturers. Demand for AI chips, advanced packaging solutions and high-bandwidth memory continues to boost semiconductor capital expenditures, especially in Asia, where Onto Innovation has expanded its manufacturing footprint.
Customer adoption of the company’s latest systems, including the Dragonfly G5 and Atlas G6 platforms, has been especially promising. These technologies aim to help semiconductor manufacturers improve yields and process control for increasingly complex chip designs. A key highlight from the quarter was the qualification of the Dragonfly G5 inspection system at both a leading 2.5D logic customer and a high-bandwidth memory customer. Onto also announced that its newly launched Atlas G6 system was selected by a second logic customer for gate-all-around metrology applications.
Another major development was Onto Innovation’s collaboration with Rigaku Holdings Corporation, acquiring a 27% stake for about $710 million, with the deal expected to close in the second half of 2026. The partnership expands Onto’s access to advanced X-ray technologies, enhancing its semiconductor inspection and metrology capabilities, and includes the right to appoint a board member. Along with its earlier acquisition of Semilab USA, the move underscores Onto’s strategy to broaden its process control ecosystem and support long-term growth.
Specialty devices and advanced packaging revenues (55% of total revenues) were about $160 million for the quarter. Roughly two-thirds came from advanced packaging, including about $25 million from Semilab, with the remainder driven by specialty devices such as power semiconductors.
Revenues from the Advanced nodes (27.4%) were about $80 million, with roughly 60% coming from memory, primarily DRAM, and the rest from logic.
Revenues from Software and services accounted for the remaining 17.6% of net sales.
Margin DetailsNon-GAAP gross margin improved slightly to 55.7% from 55.1% in the previous-year quarter.
Non-GAAP operating income rose to $77.9 million from $76.5 million in the prior-year quarter. Non-GAAP operating margin was 26.7%, down from 28.7% in the previous-year quarter.
Despite rising input costs, including memory, fuel and shipping, margin performance remained strong, driven largely by benefits from the shift to extended factories.
Total operating expenses for the quarter were $112.9 million compared with $80 million in the previous year quarter.
LiquidityAs of March 31, 2026, the company had $654.2 million in cash, cash equivalents and marketable securities with $214.5 million of total current liabilities compared with $639.6 million and $218.9 million, respectively, as of Jan. 3, 2026.
Accounts receivable were $306.6 million.
The company also generated roughly $26 million in operating cash flow during the quarter.
Q2 Guidance Signals Continued MomentumOnto Innovation expects second-quarter revenues of $320–$330 million, implying about 10% upside to prior estimates at the midpoint and 28% year-over-year growth. Momentum is set to build in the second half, with at least 15% growth over the first half, putting full-year 2026 revenue above $1.3 billion.
Despite headwinds from higher material and fuel costs, along with increased R&D and service investments, Onto Innovation expects continued margin expansion.
The company expects gross margin between 56% and 56.5%, non-GAAP operating margin between 28% and 28.6% and non-GAAP EPS between $1.65 and $1.73.
While monitoring macro and company-specific cost pressures, Onto Innovation remains confident it can expand gross margins by at least 50 basis points in the third and fourth quarters each and exit the year with an operating margin above 30%.
How Have Estimates Been Moving Since Then?In the past month, investors have witnessed a upward trend in fresh estimates.
VGM ScoresAt this time, Onto Innovation has a subpar Growth Score of D, a grade with the same score on the momentum front. Following the exact same course, the stock has a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
OutlookEstimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Onto Innovation has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
Shares of Onto Innovation (ONTO - Free Report) have gained 0.2% over the past four weeks to close the last trading session at $274.76, but there could still be a solid upside left in the stock if short-term price targets of Wall Street analysts are any indication. Going by the price targets, the mean estimate of $352.14 indicates a potential upside of 28.2%.
The average comprises seven short-term price targets ranging from a low of $330.00 to a high of $370.00, with a standard deviation of $12.86. While the lowest estimate indicates an increase of 20.1% from the current price level, the most optimistic estimate points to a 34.7% upside. More than the range, one should note the standard deviation here, as it helps understand the variability of the estimates. The smaller the standard deviation, the greater the agreement among analysts.
While the consensus price target is highly sought after by investors, the ability and unbiasedness of analysts in setting price targets have long been questionable. And investors making investment decisions solely based on this tool would arguably do themselves a disservice.
However, an impressive consensus price target is not the only factor that indicates a potential upside in ONTO. This view is strengthened by the agreement among analysts that the company will report better earnings than what they estimated earlier. Though a positive trend in earnings estimate revisions doesn't give any idea as to how much the stock could surge, it has proven effective in predicting an upside.
Price, Consensus and EPS Surprise
Here's What You May Not Know About Analysts' Price TargetsAccording to researchers at several universities across the globe, a price target is one of many pieces of information about a stock that misleads investors far more often than it guides. In fact, empirical research shows that price targets set by several analysts, irrespective of the extent of agreement, rarely indicate where the price of a stock could actually be heading.
While Wall Street analysts have deep knowledge of a company's fundamentals and the sensitivity of its business to economic and industry issues, many of them tend to set overly optimistic price targets. Are you wondering why?
They usually do that to drum up interest in shares of companies that their firms either have existing business relationships with or are looking to be associated with. In other words, business incentives of firms covering a stock often result in inflated price targets set by analysts.
However, a tight clustering of price targets, which is represented by a low standard deviation, indicates that analysts have a high degree of agreement about the direction and magnitude of a stock's price movement. While that doesn't necessarily mean the stock will hit the average price target, it could be a good starting point for further research aimed at identifying the potential fundamental driving forces.
That said, while investors should not entirely ignore price targets, making an investment decision solely based on them could lead to disappointing ROI. So, price targets should always be treated with a high degree of skepticism.
Here's Why There Could be Plenty of Upside Left in ONTOThere has been increasing optimism among analysts lately about the company's earnings prospects, as indicated by strong agreement among them in revising EPS estimates higher. And that could be a legitimate reason to expect an upside in the stock. After all, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
Over the last 30 days, the Zacks Consensus Estimate for the current year has increased 3.5%, as two estimates have moved higher compared to no negative revision.
Moreover, ONTO currently has a Zacks Rank #2 (Buy), which means it is in the top 20% of more than 4,000 stocks that we rank based on four factors related to earnings estimates. Given an impressive externally-audited track record, this is a more conclusive indication of the stock's potential upside in the near term. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>> .
Therefore, while the consensus price target may not be a reliable indicator of how much ONTO could gain, the direction of price movement it implies does appear to be a good guide.
Key Takeaways Onto Innovation will buy a 27% Rigaku stake, gaining advanced X-ray technologies and software revenues.ONTO expects Rigaku benefits to offset lost interest income within a year after closing.Onto Innovation added Semilab, Lumina and lithography assets to expand process control capabilities. One of the key drivers behind Onto Innovation, Inc. (ONTO - Free Report) growth and competitive strength has been its strategic use of acquisitions. Rather than relying solely on internal research and development, the company has expanded its technology portfolio through carefully selected acquisitions that enhance its capabilities, accelerate innovation and strengthen its position across multiple semiconductor manufacturing segments.
In April 2026, Onto partnered with Rigaku Holdings Corp. As part of the deal, Onto will buy a 27% ownership stake in Rigaku for approximately $710 million. The transaction is expected to close in the second half of 2026. This partnership provides Onto with access to a broader range of advanced X-ray technologies, which could sharply enhance its semiconductor inspection and metrology capabilities. Along with Onto’s earlier acquisition of Semilab USA, it is growing its process control ecosystem. These investments may help Onto tackle increasingly complex semiconductor manufacturing challenges while creating additional long-term revenue streams. Although it won’t consolidate Rigaku’s financials, Onto expects the partnership to increase earnings through high-margin Ai Diffract software licensing, higher sales of metrology tools like Atlas G6, and annual dividend income of more than $7 million.
Management expects these benefits to cover the lost interest income from the cash used for the deal within a year of closing. In 2025, Onto completed a $495 million acquisition of key Semilab product lines, adding FAaST, CnCV and MBIR tools to strengthen its inline wafer contamination monitoring, materials analysis and surface charge metrology capabilities. Specialty devices and advanced packaging generated approximately $160 million, or 55% of the first-quarter revenues, with advanced packaging contributing roughly two-thirds, including around $25 million from Semilab.
It has added Lumina to enhance its inspection portfolio. Lumina specializes in laser-based inspection for unpatterned wafers and emerging panel applications. Its patented technology enables high-sensitivity scanning of silicon carbide, gallium nitride and glass substrates and carriers in advanced packaging. This complements the company’s pattern inspection capabilities, addresses critical defect detection and is expected to increase SAM by $250 million annually within three years. Onto also acquired its lithography business from Kulicke and Soffa Industries, Inc. in 2024, gaining key intellectual property, including 24 issued patents and eight pending. This acquisition strengthens Onto’s JetStep panel lithography development and enhances its overall metrology and lithography capabilities.
How are ONTO’s Industry Peers Broadening Market Reach?KLA Corporation's (KLAC - Free Report) product roadmap and customer collaboration continue to translate into measurable market share momentum. KLAC has expanded its technology portfolio through strategic acquisitions, including Orbotech in 2019, which strengthened its presence in flat-panel displays, PCBs and advanced packaging; SPTSTechnologies, which added etch and deposition capabilities; Therma-Wave, which enhanced metrology and process control; and ICOSVisionSystems, which bolstered optical inspection solutions for semiconductor packaging. The company also noted that process control share has risen about 360 basis points since 2021, with gains across mask inspection, optical pattern wafer inspection and electron-beam inspection.
Applied Materials (AMAT - Free Report) expects its packaging revenues to grow more than 50% in 2026, with investments shifting toward its leadership positions in 3D stacking. This outlook is reinforced by Applied Materials’ intent to acquire NEXX business from ASMPT, which would add panel-level electrochemical deposition capabilities and broaden its portfolio for larger-body AI accelerator packages. Management framed packaging as one of the most enabling parts of AI compute systems, which can extend the duration of packaging investment beyond a single memory build cycle. If the acquisition closes and execution remains on track, AMAT can expand its served markets while deepening customer integration.
ONTO Price Performance, Valuation and EstimatesONTO’s shares have soared 154.6% in the past year, outperforming the Zacks Nanotechnology industry’s growth of 153.2% as well as the Zacks Computer and Technology sector and the S&P 500 composite’s growth of 43.5% and 26.7%, respectively.
Image Source: Zacks Investment Research
In terms of forward price/earnings, ONTO’s shares are trading at 31.58X, higher than the industry’s 6.25X.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for ONTO has moved up for both 2026 and 2027 over the past 60 days.
Image Source: Zacks Investment Research
Onto Innovation currently sports a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Key Takeaways ONTO topped Q1 expectations and sees 2026 revenue exceeding $1.3 billion on AI-driven demand.ONTO expects advanced packaging revenue to grow more than 50% in 2026 amid customer wins.ONTO plans a $710M Rigaku stake investment to expand metrology capabilities and licensing revenue. Shares of Onto Innovation, Inc. (ONTO - Free Report) have been one of the standout performers in the semiconductor equipment industry, delivering a remarkable 174.2% gain over the past year, outperforming the Zacks Nanotechnology industry’s growth of 171.5%. The company has outpaced the Zacks Computer and Technology sector and the S&P 500 composite’s growth of 42.8% and 26.3%, respectively.
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The stock’s impressive rally has been fueled by booming demand for AI infrastructure, advanced semiconductor packaging technologies, and the company’s expanding role in next-generation chip manufacturing. ONTO’s key competitors include KLA Corporation (KLAC - Free Report) , Camtek Ltd (CAMT - Free Report) and Nova Ltd. (NVMI - Free Report) . KLAC, CAMT and NVMI have grown 145.4%, 121.6% and 121%, respectively, in the same time frame.
Onto Innovation is a leading provider of process control, metrology, inspection and software solutions for semiconductor manufacturing. Its technologies help chipmakers improve yields, detect defects and optimize production across advanced logic, memory, advanced packaging, AI and high-performance computing applications. As chip manufacturing grows more complex, demand for Onto's precision tools continues to rise.
With such a strong run already behind it, investors are now asking a critical question: Does ONTO still have room to climb, or has the market already priced in most of the good news?
AI is Creating a Powerful Tailwind for ONTO StockOnto Innovation started 2026 strongly, surpassing expectations as demand for AI compute, advanced packaging and semiconductor process technologies continues to grow. First-quarter revenue hit $292 million, nearly 10% up sequentially, while second-quarter guidance of $320–$330 million indicates about 28% year-over-year growth. The company anticipates revenue to increase more than 15% sequentially in the second half of 2026, putting it on track to exceed $1.3 billion for the year. This momentum is fueled by customer expansions, rising adoption of new products and a strengthening order backlog.
Advanced Packaging to Become a Long-Term Growth EngineONTO continues to solidify its position in advanced packaging with several key customer wins and technology milestones. It achieved qualification for its Dragonfly G5 system at a leading 2.5D logic customer, with shipments progressing ahead of schedule. Its pipeline now comprises more than 15 applications across more than 10 customers, highlighting broad adoption potential. Advanced packaging revenue is projected to grow more than 50% in 2026, driven by increasing use cases in 2.5D logic, HBM and other advanced packaging technologies. Demand for solutions supporting bumps below six microns in height is rising, especially among OSAT customers, while growing interest in panel-level packaging and heterogeneous integration is expected to lead to a larger production ramp starting in 2027.
Advanced nodes business is also gaining momentum, led by expanding adoption of its Atlas G6 platform and new application opportunities. Following successful customer evaluations, Atlas G6 deployments are increasing across both logic and memory markets. The company also secured a new win in through-silicon via metrology, with shipments expected to begin in the second half of 2026. Growth is being driven by continued investment in advanced logic, improving DRAM demand and an anticipated recovery in the NAND market. As a result, Onto expects its advanced nodes segment to grow approximately 25% in 2026, outperforming broader WFE growth projections in the low-20% range.
Partnerships Strengthen ONTO’s Competitive PositionIt is strengthening its partnership with Rigaku Holdings Corporation through a planned $710 million investment for a 27% stake, expected to close in the second half of 2026. Funded primarily with cash on hand, the deal combines Rigaku’s X-ray expertise with ONTO’s optical metrology capabilities, expanding its technology portfolio. The partnership is expected to generate high-margin licensing revenue from Ai Diffract software, drive additional metrology tool sales and provide annual dividend income. Rigaku’s results will not be consolidated into Onto’s financial statements, though unrealized gains and losses from the investment will be reflected in other income.
Moreover, Onto Innovation's strategic investment in hybrid metrology is aimed at expanding its growth opportunities over the next three to six years. While the initiative is not expected to have a meaningful impact on revenue in 2026, it is positioned to create long-term value through potential interest income, high-margin licensing revenue and increased hybrid metrology system sales. Combined with expected dividend income, the investment is designed to strengthen Onto’s technology leadership and significantly broaden its medium- to long-term growth prospects.
Onto Innovation expects second-quarter revenues of $320–$330 million, implying about 10% upside to prior estimates at the midpoint and 28% year-over-year growth. Despite headwinds from higher material and fuel costs, along with increased R&D and service investments, it expects continued margin expansion. While monitoring macro and company-specific cost pressures, Onto remains confident it can expand gross margins by at least 50 basis points in the third and fourth quarters each and exit the year with an operating margin above 30%.
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Despite its strong outlook, ONTO is not without risks. The company generates a significant portion of its revenue from large semiconductor manufacturers, making it sensitive to changes in their capital spending plans. Any slowdown in customer investments could affect revenue growth and order trends. Additionally, Onto operates in a highly competitive market alongside larger industry players with greater resources and global reach. To maintain its competitive position, the company must continue investing in innovation and advancing its technology leadership. The company is weighed down by tariffs, mostly from imported components that make up nearly 90% of its costs, along with added pressure from outbound tariffs.
Positive Estimate Revision Trend for ONTOEarnings estimates for ONTO have moved up for both 2026 and 2027 over the past 60 days.
Image Source: Zacks Investment Research
Valuation ConcernsAfter rising 174% in a year, the stock now trades at a significantly higher valuation multiple than it did previously. In terms of forward price/earnings, ONTO’s shares are trading at 34.12X, higher than the industry’s 6.6X.
Image Source: Zacks Investment Research
KLAC, CAMT and NVMI are trading at multiples of 43.59X, 47.39X and 48.9X, respectively.
Does ONTO Have More Room to Run?The company sits at the intersection of multiple powerful trends like AI, advanced packaging demand, HBM, semiconductor process complexity and data center expansion. These trends are likely to continue in the long run. However, as valuations rise, stock performance will increasingly depend on continued earnings growth and successful execution.
For long-term investors seeking exposure to AI-driven semiconductor infrastructure, Onto Innovation remains a compelling bet. The stock may experience periods of volatility following its massive run-up, but its strong competitive position and exposure to some of the industry's fastest-growing segments suggest the company could still have additional room to run over the coming years.
Currently boasting a Zacks Rank #1 (Strong Buy), ONTO seems to be a value addition for your portfolio. You can see the complete list of today’s Zacks #1 Rank stocks here.
Globus Medical (GMED - Free Report) has been on a downward spiral lately with significant selling pressure. After declining 13.8% over the past four weeks, the stock looks well positioned for a trend reversal as it is now in oversold territory and there is strong agreement among Wall Street analysts that the company will report better earnings than they predicted earlier.
We use Relative Strength Index (RSI), one of the most commonly used technical indicators, for spotting whether a stock is oversold. This is a momentum oscillator that measures the speed and change of price movements.
RSI oscillates between zero and 100. Usually, a stock is considered oversold when its RSI reading falls below 30.
Technically, every stock oscillates between being overbought and oversold irrespective of the quality of their fundamentals. And the beauty of RSI is that it helps you quickly and easily check if a stock's price is reaching a point of reversal.
So, by this measure, if a stock has gotten too far below its fair value just because of unwarranted selling pressure, investors may start looking for entry opportunities in the stock for benefiting from the inevitable rebound.
However, like every investing tool, RSI has its limitations, and should not be used alone for making an investment decision.
Why GMED Could Bounce Back Before LongThe heavy selling of GMED shares appears to be in the process of exhausting itself, as indicated by its RSI reading of 27.24. So, the trend for the stock could reverse soon for reaching the old equilibrium of supply and demand.
This technical indicator is not the only factor that calls for a potential rebound for the stock. There is a fundamental indicator as well. A strong agreement among sell-side analysts covering GMED in raising earnings estimates for the current year has led to an increase in the consensus EPS estimate by 6.3% over the last 30 days. And an upward trend in earnings estimate revisions usually translates into price appreciation in the near term.
Moreover, GMED currently has a Zacks Rank #1 (Strong Buy), which means it is in the top 5% of more than 4,000 stocks that we rank based on trends in earnings estimate revisions and EPS surprises. This is a more conclusive indication of the stock's potential turnaround in the near term. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>> .
Growth investors focus on stocks that are seeing above-average financial growth, as this feature helps these securities garner the market's attention and deliver solid returns. However, it isn't easy to find a great growth stock.
In addition to volatility, these stocks carry above-average risk by their very nature. Also, one could end up losing from a stock whose growth story is actually over or nearing its end.
However, the task of finding cutting-edge growth stocks is made easy with the help of the Zacks Growth Style Score (part of the Zacks Style Scores system), which looks beyond the traditional growth attributes to analyze a company's real growth prospects.
Our proprietary system currently recommends Globus Medical (GMED - Free Report) as one such stock. This company not only has a favorable Growth Score, but also carries a top Zacks Rank.
Studies have shown that stocks with the best growth features consistently outperform the market. And returns are even better for stocks that possess the combination of a Growth Score of A or B and a Zacks Rank #1 (Strong Buy) or 2 (Buy).
While there are numerous reasons why the stock of this medical device company is a great growth pick right now, we have highlighted three of the most important factors below:
Earnings GrowthEarnings growth is arguably the most important factor, as stocks exhibiting exceptionally surging profit levels tend to attract the attention of most investors. And for growth investors, double-digit earnings growth is definitely preferable, and often an indication of strong prospects (and stock price gains) for the company under consideration.
While the historical EPS growth rate for Globus Medical is 17%, investors should actually focus on the projected growth. The company's EPS is expected to grow 17% this year, crushing the industry average, which calls for EPS growth of 12.3%.
Impressive Asset Utilization RatioGrowth investors often overlook asset utilization ratio, also known as sales-to-total-assets (S/TA) ratio, but it is an important feature of a real growth stock. This metric shows how efficiently a firm is utilizing its assets to generate sales.
Right now, Globus Medical has an S/TA ratio of 0.6, which means that the company gets $0.6 in sales for each dollar in assets. Comparing this to the industry average of 0.59, it can be said that the company is more efficient.
While the level of efficiency in generating sales matters a lot, so does the sales growth of a company. And Globus Medical looks attractive from a sales growth perspective as well. The company's sales are expected to grow 8.4% this year versus the industry average of 5.9%.
Promising Earnings Estimate RevisionsBeyond the metrics outlined above, investors should consider the trend in earnings estimate revisions. A positive trend is a plus here. Empirical research shows that there is a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
The current-year earnings estimates for Globus Medical have been revising upward. The Zacks Consensus Estimate for the current year has surged 6.3% over the past month.
Bottom LineWhile the overall earnings estimate revisions have made Globus Medical a Zacks Rank #1 stock, it has earned itself a Growth Score of B based on a number of factors, including the ones discussed above.
You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
This combination indicates that Globus Medical is a potential outperformer and a solid choice for growth investors.
It doesn't matter your age or experience: taking full advantage of the stock market and investing with confidence are common goals for all investors. Luckily, Zacks Premium offers several different ways to do both.
The research service features daily updates of the Zacks Rank and Zacks Industry Rank, full access to the Zacks #1 Rank List, Equity Research reports, and Premium stock screens, all of which will help you become a smarter, more confident investor.
Zacks Premium includes access to the Zacks Style Scores as well.
What are the Zacks Style Scores? The Zacks Style Scores is a unique set of guidelines that rates stocks based on three popular investing types, and were developed as complementary indicators for the Zacks Rank. This combination helps investors choose securities with the highest chances of beating the market over the next 30 days.
Based on their value, growth, and momentum characteristics, each stock is assigned a rating of A, B, C, D, or F. The better the score, the better chance the stock will outperform; an A is better than a B, a B is better than a C, and so on.
The Style Scores are broken down into four categories:
Value ScoreValue investors love finding good stocks at good prices, especially before the broader market catches on to a stock's true value. Utilizing ratios like P/E, PEG, Price/Sales, Price/Cash Flow, and many other multiples, the Value Style Score identifies the most attractive and most discounted stocks.
Growth ScoreGrowth investors, on the other hand, are more concerned with a company's financial strength and health, and its future outlook. The Growth Style Score examines things like projected and historic earnings, sales, and cash flow to find stocks that will experience sustainable growth over time.
Momentum ScoreMomentum trading is all about taking advantage of upward or downward trends in a stock's price or earnings outlook, and these investors live by the saying "the trend is your friend." The Momentum Style Score can pinpoint good times to build a position in a stock, using factors like one-week price change and the monthly percentage change in earnings estimates.
VGM ScoreIf you want a combination of all three Style Scores, then the VGM Score will be your friend. It rates each stock on their combined weighted styles, helping you find the companies with the most attractive value, best growth forecast, and most promising momentum. It's also one of the best indicators to use with the Zacks Rank.
How Style Scores Work with the Zacks Rank The Zacks Rank is a proprietary stock-rating model that harnesses the power of earnings estimate revisions, or changes to a company's earnings expectations, to help investors build a successful portfolio.
Investors can count on the Zacks Rank's success, with #1 (Strong Buy) stocks producing an unmatched +23.7% average annual return since 1988, more than double the S&P 500's performance. But the model rates a large number of stocks, and there are over 200 companies with a Strong Buy rank, plus another 600 with a #2 (Buy) rank, on any given day.
But it can feel overwhelming to pick the right stocks for you and your investing goals with over 800 top-rated stocks to choose from.
That's where the Style Scores come in.
To have the best chance of big returns, you'll want to always consider stocks with a Zacks Rank #1 or #2 that also have Style Scores of A or B, which will give you the highest probability of success. If you're looking at stocks with a #3 (Hold) rank, it's important they have Scores of A or B as well to ensure as much upside potential as possible.
The direction of a stock's earnings estimate revisions should always be a key factor when choosing which stocks to buy, since the Scores were created to work together with the Zacks Rank.
For instance, a stock with a #4 (Sell) or #5 (Strong Sell) rating, even one that boasts Scores of A and B, still has a downward-trending earnings forecast, and a much greater likelihood its share price will decline as well.
Thus, the more stocks you own with a #1 or #2 Rank and Scores of A or B, the better.
Stock to Watch: Globus Medical (GMED - Free Report) Audubon, PA-based Globus Medical, Inc. is a medical device company that develops and commercializes healthcare solutions for patients with musculoskeletal disorders. The company currently has its sales operations distributed across 65 counties worldwide.
GMED is a #2 (Buy) on the Zacks Rank, with a VGM Score of A.
It also boasts a Value Style Score of B thanks to attractive valuation metrics like a forward P/E ratio of 17.16; value investors should take notice.
Three analysts revised their earnings estimate higher in the last 60 days for fiscal 2026, while the Zacks Consensus Estimate has increased $0.21 to $4.66 per share. GMED also boasts an average earnings surprise of +26.3%.
With a solid Zacks Rank and top-tier Value and VGM Style Scores, GMED should be on investors' short list.
Investors with an interest in Medical - Instruments stocks have likely encountered both Globus Medical (GMED - Free Report) and SONOVA HOLDING (SONVY - Free Report) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Currently, Globus Medical has a Zacks Rank of #2 (Buy), while SONOVA HOLDING has a Zacks Rank of #4 (Sell). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that GMED is likely seeing its earnings outlook improve to a greater extent. But this is just one factor that value investors are interested in.
Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its current share price levels.
The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
GMED currently has a forward P/E ratio of 17.16, while SONVY has a forward P/E of 18.33. We also note that GMED has a PEG ratio of 1.68. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. SONVY currently has a PEG ratio of 3.73.
Another notable valuation metric for GMED is its P/B ratio of 2.29. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, SONVY has a P/B of 4.9.
These are just a few of the metrics contributing to GMED's Value grade of B and SONVY's Value grade of C.
GMED is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that GMED is likely the superior value option right now.
On May 20, 2026, Globus Medical Inc GMED shares rose 5.1% today, reaching a current price of $84.03. The stock is trading within a 52-week range of $51.79 to $101.40.
GF Value™ verdict: Current price of $84.03 is 14.6% below GF Value™ of $98.34.GF Score™ of 97/100 indicates a strong overall financial health and performance.Notable signal: Insider activity shows $1.9M in sales over the last three months with no buying. Is GMED Overvalued or Undervalued? The current price of Globus Medical Inc GMED at $84.03 is 14.6% below its GF Value™ estimate of $98.34, suggesting that the stock is undervalued. This creates a margin of safety for potential investors, as the GF Value™ assessment indicates a fair value that significantly exceeds the current trading price. The GF Valuation label marks GMED as "Modestly Undervalued," which signals a potential opportunity for growth. GF Value™ is GuruFocus' proprietary measure of intrinsic value, calculated from historical trading multiples, past business growth, and future performance estimates.
While the undervaluation presents an opportunity, it is essential to consider the risks associated with investing in a stock that has seen recent insider selling activity of $1.9M, which could suggest a lack of confidence among insiders. Overall, the combination of a strong GF Score™ and the undervalued status implies that GMED may have growth potential, but investors should proceed with caution given the insider selling trend.
How Does GMED's Valuation Compare to Its History? MetricCurrentHistorical P/E (TTM)19.5x43.3x Forward P/E18.4xN/A GMED's current P/E (TTM) of 19.5x is significantly below its 5-year median P/E of 43.3x, indicating that the stock is trading at a much lower valuation compared to its historical performance. The forward P/E of 18.4x further supports the notion that the stock is reasonably priced relative to future earnings expectations. This P/E analysis aligns with the GF Value™ verdict of the stock being undervalued, as it suggests that the market has not fully recognized GMED's earnings potential.
What Does GMED's GF Score™ Tell Us? MetricRating GF Score™97/100 Financial Strength8/10 Profitability9/10 Growth10/10 Valuation8/10 Momentum10/10 The GF Score™ of 97/100 indicates that Globus Medical possesses strong financial health and performance across several key metrics. The highest scores are in Growth (10/10) and Momentum (10/10), reflecting the company’s robust business expansion and positive price trends. However, while the Financial Strength (8/10) and Valuation (8/10) rankings are also solid, they suggest areas where improvements could enhance overall stability. Overall, GMED shows a promising outlook with strong growth potential, but investors should be aware of the moderate financial strength compared to its growth capabilities.
What Are Insiders Doing with GMED Stock? Recent insider activity at Globus Medical indicates a selling trend, with insiders having sold $1.9M worth of shares over the past three months and no buying activity reported. This pattern may suggest a cautious outlook among insiders regarding the stock's near-term performance. While insider selling does not inherently indicate a negative outlook for the company, it can be a signal of potential uncertainty, particularly when combined with the stock's recent price fluctuations.
What This Means for Investors Based on the GF Value™ assessment, Globus Medical Inc GMED is currently undervalued, presenting a potential opportunity for growth. However, the recent insider selling could signal caution, and investors should weigh this factor alongside the stock's strong financial metrics.
For the complete analysis, visit the Globus Medical Inc GMED stock page. You can also explore the GF Value™ page for detailed valuation methodology, or use the GuruFocus Stock Screener to find similar opportunities.
Frequently Asked Questions What is GMED's GF Score™?
GMED has a GF Score™ of 97/100, indicating strong overall financial health and performance, suggesting a potential for higher long-term returns.
Is GMED overvalued or undervalued?
GMED is currently undervalued, with a GF Value™ estimate of $98.34 compared to its current price of $84.03, representing a 14.6% upside.
What is GMED's P/E ratio?
GMED's P/E (TTM) is 19.5x, which is significantly below its 5-year median P/E of 43.3x, indicating the stock is trading at a lower valuation compared to its historical performance.
This stock alert was generated using automated technology and GuruFocus financial data to provide readers with timely and accurate market reporting. This content was reviewed by GuruFocus editorial team prior to publication. Please send any questions or comments about this story to [email protected].
Over the past several months, generative AI (GenAI) in the Medical Instruments industry has moved from experimental to operational use. Applications include generating synthetic medical images, simulating disease progression, creating potential drug molecules and simulatingtheir effects, to accelerate the long and costly drug development process. McKinsey’s latest survey of US healthcare leaders highlights several signals of gen AI’s maturation, with about 50% already implementing it across their organizations and more than 80% having deployed their first use cases to end users.
At the same time, regulatory bodies worldwide are adapting to this shift. The European Union AI Act (EU AI Act) 2024 introduced strict requirements for high-risk AI systems, such as AI-based medical software, including risk-mitigation systems, high-quality data sets and clear user information. As of 2025-end, the FDA’s AI/ML-Enabled Medical Devices list includes a cumulative total of more than 1400 devices, satisfying the applicable premarket requirements.
Grand View Research estimates the global AI in the healthcare market to expand at a CAGR of 38.9% from 2026 to 2033, building on a $36.67 billion valuation in 2025. Amid industry wide challenges, companies like Electromed (ELMD - Free Report) , Globus Medical (GMED - Free Report) and Intuitive Surgical (ISRG - Free Report) appear well-positioned to thrive.
Industry Description The Zacks Medical - Instruments industry is highly fragmented, with participants engaged in research and development (R&D) in therapeutic areas. This FDA-regulated sector encompasses a vast array of products, from transcatheter valves and orthopedic devices to advanced imaging equipment and robotics. Recent trends highlight the integration of AI in diagnostics, the expansion of telemedicine, the rise of robotic-assisted surgeries and developments in 3D printing, continuous glucose monitoring systems and gene editing. The rise of GenAI is also reshaping MedTech, from speeding up patient recruitment to optimizing trial designs and improving regulatory processes. The FDA’s Total Product Life Cycle approach supports faster development of safe and effective medical devices critical to public health.
3 Trends Shaping the Future of the Medical Instruments Industry GenAI Revolution: Over the past couple of years, there has been a significant increase in the adoption of GenAI within the medical instrument space, with hyper-personalization being the primary feature of GenAI-driven treatment options. GenAI, while analyzing vast and complex genetic and molecular data, is expected to help healthcare reach new heights in terms of predictive treatment options and smart hospital systems. According to Towards Healthcare, global GenAI in the healthcare market is projected to expand at a CAGR of 35.1% between 2026 and 2035, from a value of $2.65billion in 2025. Growth is being driven by rising demand for AI solutions in the healthcare industry, increasing investments and strategic partnerships between healthcare institutions and AI technology providers, as well as demand for precise and personalized treatment plans. The application of AI in the diagnostics space is growing enormously, with the market expected to witness a CAGR of 46.1% by 2034.
M&A Trend: The medical instrument space has been benefiting from the ongoing merger and acquisition (M&A) trend. It is a known fact that smaller and mid-sized industry players attempt to compete with the big shots through consolidation. The big players attempt to enter new markets through a niche product. According to a J.P. Morgan April 2026 report, medtech M&A activity in 2025 was highly concentrated, with large transactions accounting for the majority of value. At the same time, underlying deal volume remained more stable. Notable transactions in the fourth quarter include Abbott’s acquisition of Exact Sciences for $23 billion and Blackstone and TPG’s take-private deal of Hologic for $18 billion. The insight also states that medtech deal activity totaled $26.6 billion across 38 deals in the first quarter of 2026, including Boston Scientific’s $15 billion agreement to acquire Penumbra and Danaher’s agreement to acquire Masimo for $10 billion.
Business Trend Disruption: The IMF’s April 2026 World Economic Outlook notes that the outbreak of war in the Middle East in February 2026 has interrupted what had been a steady growth trajectory. Assuming a short-lived conflict,global growth is projected at 3.1% in 2026, a downward revision of 0.2 percentage points from its January forecast. Prior to the war, the agency had been preparing to raise its global growth outlook, reflecting continued economic momentum, a tech-investment boom, moderation in trade policy tensions, fiscal support in some countries and accommodating financial conditions. Global headline inflation is expected to rise from 4.1% in 2025 to 4.4% in 2026, before resuming its decline in 2027. Growth slowdown and an increase in inflation are expected to be more pronounced in emerging market and developing economies. The IMF apprehends that fostering adaptability, maintaining credible policy frameworks and reinforcing international cooperation are essential to navigating the current shock.
Zacks Industry Rank Indicates Dull Prospects The Zacks Medical Instruments industry’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates gloomy near-term prospects. The industry, housed within the broader Zacks Medical sector, currently carries a Zacks Industry Rank #139, which places it in the bottom 43% of 243 Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.
We will present a few stocks that have the potential to outperform the market based on a strong earnings outlook. It is worth taking a look at the industry’s shareholder returns and current valuation first.
Industry Underperforms S&P 500 & Sector The industry has underperformed the Zacks S&P 500 composite and the sector in the past year.
The industry has declined 6.9% against the broader sector’s rise of 4.9%. The S&P 500 has returned 30.3% in a year.
1-Year Price Performance
Image Source: Zacks Investment Research
Industry's Current Valuation On the basis of the forward 12-month price-to-earnings (P/E), which is commonly used for valuing medical stocks, the industry is currently trading at 24.00X compared with the broader industry’s 19.68X and the S&P 500’s 21.85X.
Over the past five years, the industry has traded as high as 41.40X, as low as 24.00X and at the median of 32.12X, as the charts show below.
Price-to-Earnings Forward 12 Months (F12M)
Image Source: Zacks Investment Research
Price-to-Earnings Forward 12 Months (F12M)
Image Source: Zacks Investment Research
3 Stocks to Buy Right Now Electromed: Electromed develops airway clearance products applying High Frequency Chest Wall Oscillation technologies in pulmonary care for patients.Its products are sold in both the homecare market and the hospital market for inpatient use.Electromed delivered its 14th consecutive quarter of year-over-year revenue and profit growth in the first quarter of 2026. With 86% of covered U.S. lives now under contract and manufacturing optimization complete, the company is well-positioned to capture the significant bronchiectasis market opportunity.
The Zacks Consensus Estimate for this Zacks Rank #1 (Strong Buy) company’s 2026 earnings per share (EPS) indicates a 41.2% rise over 2025. The consensus mark for 2026 revenues implies a 15.6% improvement. ELMD has an earnings yield of 3.1% against the industry’s negative 1% yield.
You can see the complete list of today's Zacks #1 Rank stocks here.
Price & Consensus: ELMD
Image Source: Zacks Investment Research
Globus Medical: Globus Medical develops advanced products and procedures to treat a variety of musculoskeletal conditions. The company’s 2023 merger with NuVasive enhanced its global commercial reach and operational capabilities, while the acquisition of Nevro in 2025 positioned it to alter the standard of care in the neuromodulation space. In first-quarter 2026, Globus Medical’s worldwide net sales climbed 27% year over year on a reported basis, while the bottom-line surged 64.7%.
The Zacks Consensus Estimate for this Zacks Rank #1 company’s 2026 EPS calls for 17.1% growth. The consensus mark for 2026 revenues indicates an 8.8% improvement. GMED has an earnings yield of 5.8% against the industry’s negative 1% yield.
Price & Consensus: GMED
Image Source: Zacks Investment Research
Intuitive Surgical: Intuitive Surgical is a renowned name in minimally invasive care and robotic-assisted surgery. The company’s technologies include the da Vinci surgical systems and the Ion endoluminal system. In the first quarter of 2026, worldwide combined procedures grew nearly 17% year over year, with strong performance in the United States and Europe. Intuitive Surgical is also investing in the data and digital infrastructure that underpins its longer-term innovation road map.
The Zacks Consensus Estimate for this Zacks Rank #2 (Buy) company’s 2026 EPS implies year-over-year growth of 16.5%. The consensus mark for 2026 revenues indicates an improvement of 16.5%. ISRG has an earnings yield of 2.4% against the industry’s negative 1% yield.
Price & Consensus: ISRG
Image Source: Zacks Investment Research
Globus Medical (GMED - Free Report) could be a solid choice for investors given its recent upgrade to a Zacks Rank #1 (Strong Buy). This upgrade primarily reflects an upward trend in earnings estimates, which is one of the most powerful forces impacting stock prices.
A company's changing earnings picture is at the core of the Zacks rating. The system tracks the Zacks Consensus Estimate -- the consensus measure of EPS estimates from the sell-side analysts covering the stock -- for the current and following years.
Individual investors often find it hard to make decisions based on rating upgrades by Wall Street analysts, since these are mostly driven by subjective factors that are hard to see and measure in real time. In these situations, the Zacks rating system comes in handy because of the power of a changing earnings picture in determining near-term stock price movements.
As such, the Zacks rating upgrade for Globus Medical is essentially a positive comment on its earnings outlook that could have a favorable impact on its stock price.
Most Powerful Force Impacting Stock PricesThe change in a company's future earnings potential, as reflected in earnings estimate revisions, has proven to be strongly correlated with the near-term price movement of its stock. That's partly because of the influence of institutional investors that use earnings and earnings estimates for calculating the fair value of a company's shares. An increase or decrease in earnings estimates in their valuation models simply results in higher or lower fair value for a stock, and institutional investors typically buy or sell it. Their bulk investment action then leads to price movement for the stock.
Fundamentally speaking, rising earnings estimates and the consequent rating upgrade for Globus Medical imply an improvement in the company's underlying business. Investors should show their appreciation for this improving business trend by pushing the stock higher.
Harnessing the Power of Earnings Estimate RevisionsAs empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock movements, tracking such revisions for making an investment decision could be truly rewarding. Here is where the tried-and-tested Zacks Rank stock-rating system plays an important role, as it effectively harnesses the power of earnings estimate revisions.
The Zacks Rank stock-rating system, which uses four factors related to earnings estimates to classify stocks into five groups, ranging from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record, with Zacks Rank #1 stocks generating an average annual return of +25% since 1988. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here >>>> .
Earnings Estimate Revisions for Globus MedicalThis medical device company is expected to earn $4.74 per share for the fiscal year ending December 2026, which represents no year-over-year change.
Analysts have been steadily raising their estimates for Globus Medical. Over the past three months, the Zacks Consensus Estimate for the company has increased 5.6%.
Bottom LineUnlike the overly optimistic Wall Street analysts whose rating systems tend to be weighted toward favorable recommendations, the Zacks rating system maintains an equal proportion of "buy" and "sell" ratings for its entire universe of more than 4,000 stocks at any point in time. Irrespective of market conditions, only the top 5% of the Zacks-covered stocks get a "Strong Buy" rating and the next 15% get a "Buy" rating. So, the placement of a stock in the top 20% of the Zacks-covered stocks indicates its superior earnings estimate revision feature, making it a solid candidate for producing market-beating returns in the near term.
You can learn more about the Zacks Rank here >>>
The upgrade of Globus Medical to a Zacks Rank #1 positions it in the top 5% of the Zacks-covered stocks in terms of estimate revisions, implying that the stock might move higher in the near term.
Investors seek growth stocks to capitalize on above-average growth in financials that help these securities grab the market's attention and produce exceptional returns. However, it isn't easy to find a great growth stock.
That's because, these stocks usually carry above-average risk and volatility. In fact, betting on a stock for which the growth story is actually over or nearing its end could lead to significant loss.
However, the task of finding cutting-edge growth stocks is made easy with the help of the Zacks Growth Style Score (part of the Zacks Style Scores system), which looks beyond the traditional growth attributes to analyze a company's real growth prospects.
Our proprietary system currently recommends Globus Medical (GMED - Free Report) as one such stock. This company not only has a favorable Growth Score, but also carries a top Zacks Rank.
Studies have shown that stocks with the best growth features consistently outperform the market. And for stocks that have a combination of a Growth Score of A or B and a Zacks Rank #1 (Strong Buy) or 2 (Buy), returns are even better.
While there are numerous reasons why the stock of this medical device company is a great growth pick right now, we have highlighted three of the most important factors below:
Earnings GrowthEarnings growth is arguably the most important factor, as stocks exhibiting exceptionally surging profit levels tend to attract the attention of most investors. And for growth investors, double-digit earnings growth is definitely preferable, and often an indication of strong prospects (and stock price gains) for the company under consideration.
While the historical EPS growth rate for Globus Medical is 17%, investors should actually focus on the projected growth. The company's EPS is expected to grow 19.1% this year, crushing the industry average, which calls for EPS growth of 10.7%.
Impressive Asset Utilization RatioAsset utilization ratio -- also known as sales-to-total-assets (S/TA) ratio -- is often overlooked by investors, but it is an important indicator in growth investing. This metric exhibits how efficiently a firm is utilizing its assets to generate sales.
Right now, Globus Medical has an S/TA ratio of 0.6, which means that the company gets $0.6 in sales for each dollar in assets. Comparing this to the industry average of 0.59, it can be said that the company is more efficient.
In addition to efficiency in generating sales, sales growth plays an important role. And Globus Medical looks attractive from a sales growth perspective as well. The company's sales are expected to grow 8.8% this year versus the industry average of 5.7%.
Promising Earnings Estimate RevisionsSuperiority of a stock in terms of the metrics outlined above can be further validated by looking at the trend in earnings estimate revisions. A positive trend is of course favorable here. Empirical research shows that there is a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
The current-year earnings estimates for Globus Medical have been revising upward. The Zacks Consensus Estimate for the current year has surged 6.3% over the past month.
Bottom LineGlobus Medical has not only earned a Growth Score of B based on a number of factors, including the ones discussed above, but it also carries a Zacks Rank #1 because of the positive earnings estimate revisions.
You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
This combination indicates that Globus Medical is a potential outperformer and a solid choice for growth investors.
Key Takeaways GMED Q1 earnings jumped 64.7% as revenue and margins topped expectations on integration leverage.Globus Medical posted double-digit Spine growth and 30.4% Trauma growth across key products.GMED reaffirmed 2026 revenue guidance and raised EPS outlook as synergies expand margins. Globus Medical (GMED - Free Report) is leaning into its post-merger scale as it works to widen its share in musculoskeletal procedures. Management continues to emphasize share capture across core categories, supported by a portfolio that spans spine, orthopedics and enabling technologies.
First-quarter 2026 execution reinforced that setup. Profitability improved as integration initiatives flowed through margins, while category momentum in spine, trauma and enabling technologies remained intact.
GMED’s Post-Merger Setup in MusculoskeletalGlobus Medical is using the NuVasive combination to extend its reach across musculoskeletal solutions. The company now brings together engineering depth with a broader commercial footprint in training and surgeon relationships, positioning it to outpace market growth and convert scale into cash generation over time.
That scale advantage matters because the portfolio is wide. Musculoskeletal Solutions includes implantable devices, biologics, accessories and specialized instruments used across spinal, orthopedic and neurosurgical procedures, while Enabling Technologies adds imaging, navigation and robotic-assisted systems that support workflow and precision.
Globus Medical Q1 2026 Beat Shows Operating LeverageFirst-quarter 2026 results highlighted a cleaner integration picture. Adjusted earnings were $1.12 per share, up 64.7% year over year and ahead of the consensus estimate, while revenue of $759.9 million also beat expectations.
Profitability moved the right way as the company absorbed higher spending. Operating income rose 55.0% to $150.4 million, and operating margin expanded 358 basis points to 19.8%, reflecting operating leverage on higher volume. Gross margin also expanded 280 basis points to 66.4%.
Integration is showing up in the underlying margin profile. Management pointed to operating leverage as common systems roll out and production is brought in-house, with adjusted EBITDA margin at 32.3% and adjusted gross margin at 69.2% in the quarter.
The company also holds a solid track record of surpassing earnings estimates.
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GMED Spine and Trauma Gains Point to Share CaptureThe clearest signal in the quarter was the breadth of category wins. U.S. Spine posted its third straight quarter of 10% growth, with double-digit growth across standard fixation, minimally invasive surgery pedicle screws, expandable transforaminal lumbar interbody fusion, anterior lumbar interbody fusion, posterior cervical and cervical plating.
Trauma also stood out. Revenue in the segment increased 30.4% on continued adoption of the core trauma line and the Precice limb lengthening portfolio, with ANTHEM Elbow exceeding expectations and prompting additional set shipments into the field in the second quarter.
Geography reinforced the message. U.S. revenue grew 25% to $604.9 million, while international revenue rose 35.6% to $155.0 million, supported by International Spine growth of 16.4% as reported. The combination suggests share capture is not confined to a single product line or region.
Globus Medical Robotics Pull-Through and New ClearancesEnabling Technologies remains a strategic lever because it can drive implant pull-through. Management described Excelsius GPS as supporting cross-selling as surgeons move toward a more integrated workflow. Enabling Technologies revenue increased 21.1% year over year in the first quarter.
The commercial model is evolving in a way that can deepen recurring revenue streams. Management noted a mix shift toward leases and rentals versus outright system sales. Over time, that approach can broaden the installed base and increase recurring revenues tied to implants, disposables, service and case coverage, even if capital revenue timing becomes less linear quarter to quarter.
Product cadence is also reinforcing the ecosystem. Early in the second quarter, the company received two FDA 510(k) clearances for a patient-specific lumbar interbody spacer system and patient-specific rods, both designed to integrate with the Excelsius suite and surgeon planning software.
GMED Guidance and Margin Targets Set 2026 MilestonesManagement reaffirmed full-year 2026 revenue guidance of $3.18-$3.22 billion. At the same time, it raised adjusted diluted earnings guidance to $4.70-$4.80, signalling confidence that margin expansion can outpace topline growth as synergies and manufacturing initiatives progress.
The margin roadmap remains central to the longer-term thesis. Management reiterated a long-term adjusted gross margin target in the mid-70s and expects 69%-70% for full-year 2026 as manufacturing and supply-chain initiatives advance. GMED also trades at a forward, 12-month earnings multiple of 16.94X, lower than its median and the industry average.
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For investors comparing options in medical devices, it is useful to note that large-cap peer Stryker Corporation (SYK - Free Report) currently carries a Zacks Rank #3 (Hold). Teleflex Incorporated (TFX - Free Report) , another medical technology name, also has a Zacks Rank #3 (Hold). GMED’s Zacks Rank #1 (Strong Buy) sets it apart on the Zacks framework.
You can see the complete list of today's Zacks #1 Rank stocks here.
Globus Medical Key Risks to Track Through 2026Higher input costs, compensation pressure and integration-related restructuring costs can create variability, especially when the long-term margin target leaves a limited buffer if costs move faster than pricing. Management also highlighted “new and enhanced” robotic competitors entering the market, a development that can raise discounting risk on enabling technology and related implants, while the lease-and-rental mix can make capital revenue less predictable.
Foreign exchange can materially affect reported results, and the Nevro integration is expected to remain lumpy as sales coverage is rebuilt and trading protocols tighten, with timing risk around when performance normalizes in the second half of 2026.
Key Takeaways TMDX is expanding its OCS platform and advancing kidney transplant development for long-term growth.TransMedics posted solid Q1 2026 results driven by strong OCS volume and logistics growth.TMDX gross margin fell 331 basis points as investments and logistics revenue weighed on results. TransMedics Group, Inc. (TMDX - Free Report) is well-poised for growth in the coming quarters, courtesy of its strength in Organ Care System (OCS) technology. The optimism, led by decent first-quarter 2026 results, is expected to contribute further. However, concerns due to gross margin pressure persist.
This Zacks Rank #3 (Hold) company has lost 42.3% in the year-to-date period compared with 17.7% decline in the industry. The S&P 500 has witnessed 10.3% growth in the said time frame.
The renowned organ transplant therapy provider has a market capitalization of $2.44 billion. TransMedics’ earnings yield of 2.63% compares favorably with the industry’s negative 3%. The company’s earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters, missed once, with the average surprise being 39.37%.
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Factors Favoring TMDX’s GrowthRobust Pipeline Supporting Growth: TransMedics continues to advance its long-term growth strategy through the development of next-generation OCS systems and expansion into new organ markets. The company is progressing its Gen 3.0 multi-organ platform for heart, lung and liver, featuring upgraded hardware, software and a redesigned perfusion system aimed at improving usability, reliability and operational efficiency while reducing supply chain complexity.
Clinical expansion efforts remain focused on the ENHANCE Heart and DENOVO Lung programs, with the newly introduced CHOPS active cooling device expected to support trial execution and potentially broaden the company’s commercial product portfolio over time. Beyond cardiothoracic transplants, management continues to position the kidney as a major long-term opportunity, with the OCS Kidney platform under active development and a U.S. IDE submission targeted for early 2027. The company is also enhancing its broader NOP ecosystem and digital infrastructure to improve scalability, workflow efficiency and coordination across transplant centers.
Strength in OCS Technology Driving Adoption: TransMedics’ OCS revolutionizes organ transplantation by replacing passive cold storage with a dynamic, physiologic approach that perfuses donor organs with warm, oxygenated, nutrient-rich blood. This innovation minimizes ischemic injury, allows real-time organ assessment and significantly increases the viability of organs, especially hearts and lungs, donated after circulatory death, that would otherwise go unused.
As the only FDA-approved, portable platform offering warm perfusion for heart, lung and liver transplants, the OCS standardizes care, reduces post-transplant complications and sets a new clinical benchmark in organ preservation. This positions TransMedics as a leader in the multi-billion-dollar transplant market with limited competition.
Decent Q1 Results: TransMedics delivered solid first-quarter 2026 results, driven by strong OCS case volume growth, expanding clinical adoption and continued momentum in logistics services. Growth was supported by strong liver performance, steady heart adoption and higher aviation fleet utilization within the integrated National OCS Program (NOP).
While profitability remained pressured by elevated investments in expansion and clinical programs, the company continues to execute well on its long-term growth strategy. Management remains focused on advancing the ENHANCE Heart and DENOVO Lung programs, expanding internationally and developing the OCS Kidney platform, which represents a significant long-term growth opportunity.
A Factor That Can Offset the Gains for TMDXGross Margin Under Pressure: TransMedics’ gross margin remained under pressure in the first quarter of 2026 as the company continued scaling its integrated NOP infrastructure and investing aggressively in future growth initiatives. Gross margin came in at approximately 58%, down 331 basis points year over year, primarily due to higher internal supply chain activity tied to NOP inventory replenishment, investments supporting the ENHANCE and DENOVO clinical programs and continued expansion of the NOP network.
The growing contribution from lower-margin logistics and service revenues also weighed on blended margin performance. Management noted that certain one-time items further pressured margins during the quarter. The company expects near-term gross margins to remain range-bound around current levels as it continues investing in international expansion, technology upgrades and logistics infrastructure before scale efficiencies and operating leverage more meaningfully materialize.
Estimate TrendTransMedics is witnessing a negative earnings estimate revision trend for 2026. In the past 30 days, the Zacks Consensus Estimate for its earnings moved 61 cents south to $1.85 per share.
The Zacks Consensus Estimate for the company’s second-quarter 2026 revenues is pegged at $184.6 million, indicating a 17.3% improvement from the year-ago quarter’s reported number.
Key PicksSome better-ranked stocks from the same medical industry are Pacific Biosciences of California (PACB - Free Report) , Globus Medical (GMED - Free Report) and Biodesix (BDSX - Free Report) .
Pacific Biosciences of California, currently carrying a Zacks Rank #2 (Buy), reported a first-quarter 2026 adjusted loss per share of 12 cents, which surpassed the Zacks Consensus Estimate by 29.4%. Revenues of $37 million missed the Zacks Consensus Estimate by 9.3%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
PACB’s earnings are estimated to decline at a rate of 12.2% against the industry’s 16.9% growth in 2027. The company beat earnings estimates in each of the trailing four quarters, with the average surprise being 29.76%.
Globus Medical, carrying a Zacks Rank #2 at present, reported first-quarter 2026 adjusted earnings per share of $1.12, which outpaced the Zacks Consensus Estimate by 21.7%. Revenues of $760 million surpassed the Zacks Consensus Estimate by 4%.
GMED has an estimated long-term earnings growth rate of 10.2% compared with the industry’s 12.6% rise. The company beat earnings estimates in each of the trailing four quarters, with the average surprise being 26.26%.
Biodesix, currently carrying a Zacks Rank of 2, reported a first-quarter 2026 adjusted loss per share of 81 cents, which beat the Zacks Consensus Estimate by 35.71%. Revenues of $26 million beat the Zacks Consensus Estimate by 12.3%.
BDSX has an estimated earnings growth rate of 36% for 2026 compared with the industry’s 13.4% rise. The company beat earnings estimates in three of the trailing four quarters and missed once, with the average surprise being 25.56%.
Key Takeaways GMED is shifting robotics deals to leases and rentals to expand recurring revenue streams.Excelsius GPS adoption and new FDA-cleared implants support GMED's integrated workflow expansion.GMED posted 27% Q1 revenue growth and raised 2026 adjusted EPS guidance to $4.70-$4.80. Globus Medical (GMED - Free Report) is changing how it monetizes surgical robotics. Management is steering enabling technologies toward leases and rentals instead of outright sales. That can lower upfront revenue recognition and make quarterly results less predictable. The aim is to widen the installed base and grow recurring revenue tied to implants, disposables, service and case coverage.
GMED sports a Zacks Rank #1 (Strong Buy). In the past year, the stock has climbed 39.3%, outperforming its industry’s 7.8% fall.
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GMED’s Shift to Leases and Rentals Changes the ModelThe shift is happening alongside strong top-line momentum. In the first quarter of 2026, revenue rose 27% year over year to $759.9 million, while base business sales excluding Nevro increased 13.2%. Those results suggest the company can push a new commercialization model without losing demand.
Management described continued deal activity in enabling technologies, but with a pipeline shifting toward leases and rentals. A sale recognizes more revenue upfront, while a lease spreads it over time. That is why capital revenue timing can become less linear even when demand is healthy.
Strategically, the company is trading cleaner quarterly optics for a larger footprint. More systems in the field can support recurring streams tied to implants, disposables, service and case coverage, turning placements into a gateway for downstream pull-through.
Globus Medical Builds a Workflow Around Excelsius GPSThe commercial logic centers on Excelsius GPS. Management said the platform supports implant pull-through and cross-selling as surgeons adopt a more integrated workflow. The objective is to make the company’s tools part of repeatable steps that favor the broader portfolio.
In the first quarter of 2026, Enabling Technologies revenue increased 21.1% year over year, a near-term indicator that adoption is building. If the installed base expands through leases and rentals, the workflow linkage to ongoing procedures becomes the value driver.
GMED Patient-Specific Implants Add a New DifferentiatorTwo early second-quarter Food and Drug Administration 510(k) clearances add to the platform thesis. The company received clearance for a patient-specific lumbar interbody spacer system and for patient-specific rods, both designed to integrate with the Excelsius suite and surgeon planning software.
That integration reinforces the roadmap of linking planning, enabling technology and implants into a single workflow. Patient-specific products can deepen account relationships and lift procedure-level pull-through over time.
Globus Medical Synergies Aim to Lift Margins Over TimeNuVasive integration is positioned to provide operating leverage through common systems and more in-house production. As of Dec. 31, 2025, the company reported $200 million of NuVasive synergies, nearly a year ahead of schedule. Additional benefits are expected as international integrations are finalized in the back half of 2026.
Profitability is already moving in that direction. Adjusted gross margin was 69.2%, and adjusted EBITDA margin was 32.3% in the first quarter of 2026. Management reiterated a long-term adjusted gross margin target in the mid-70s and expects 69% to 70% for full-year 2026. It also raised full-year 2026 adjusted earnings per share guidance to $4.70-$4.80 while reaffirming revenue guidance of $3.18-$3.22 billion.
In terms of valuation, GMED trades at a forward, 12-month price/earnings (P/E) of 16.92x, lower than its median and industry average.
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GMED Nevro Rebuild Is a Wild Card for 2026 ResultsNevro remains the largest swing factor. In the first quarter of 2026, Nevro contributed $82.7 million of revenue, down $17.1 million from the prior quarter. Management expects lumpiness in the first 24 months while recruiting and retraining the sales organization, targeting a return to a more historical run-rate late in the second half of 2026.
Until that rebuild stabilizes, consolidated growth can look uneven even if the core musculoskeletal franchise is performing well. Investors will want to see sales coverage rebuild without disrupting customer behavior as trading protocols tighten.
Globus Medical Watchlist for Risks and Timing LumpsThe practical watchlist starts with quarterly variability tied to the enabling-technology mix shift. Leases and rentals can broaden adoption, but they reduce upfront recognition versus outright sales and can make comparisons less predictable.
Competition is the second risk. Management noted that new and enhanced robotic competitors are entering the market, which could drive discounting on enabling technology and related implants to protect account access. Stryker Corporation (SYK - Free Report) and Teleflex Incorporated (TFX - Free Report) both hold a Zacks Rank #3 (Hold), underscoring how quickly pricing pressure can rise when peers stay aggressive. You can see the complete list of today's Zacks #1 Rank stocks here.
Margin sensitivity and foreign exchange volatility round out the list. The long-term gross margin objective in the mid-70s leaves a limited cushion if cost inflation rises faster than pricing. International net sales were $155.0 million in the first quarter of 2026, and a $2.1 million foreign currency transaction loss affected other income and expenses, showing how currency can move reported results.
NEW YORK, June 1, 2026 /PRNewswire/ -- Purcell & Lefkowitz LLP announces that it is investigating Globus Medical, Inc. (NYSE: GMED) on behalf of the company's shareholders. The investigation seeks to determine whether Globus Medical's directors breached their fiduciary duties in connection with recent corporate actions.
If you are a shareholder of Globus Medical and are interested in obtaining additional information about your rights and options, please visit us at: https://pjlfirm.com/globus-medical-inc/
You may also contact Robert H. Lefkowitz, Esq. either via email at [email protected] or by telephone at 212-725-1000. One of our attorneys will personally speak with you about the case at no cost or obligation.
Purcell & Lefkowitz LLP is a law firm exclusively committed to representing shareholders nationwide who are victims of securities fraud, breaches of fiduciary duty and other types of corporate misconduct. For more information about the firm and its attorneys, please visit https://pjlfirm.com. Attorney advertising. Prior results do not guarantee a similar outcome.
Key Takeaways GMED ended Q1 2026 debt-free with about $560.9M cash and $68.9M in short-term marketable securities. Globus Medical generated $202.4M in Q1 operating cash flow, supporting growth investments. GMED had $390M left under its share repurchase authorization as of March 31, 2026. Globus Medical (GMED - Free Report) maintains a strong balance sheet and liquidity position, providing significant financial flexibility to execute its growth strategy. As of the end of the first quarter of 2026, the company held approximately $560.9 million in cash and $68.9 million in short-term marketable securities.
GMED remains debt-free, preserving its ability to invest in research and development, expand its sales force and enhance manufacturing capacity without relying on external financing. The absence of debt also lowers financial risk and eliminates interest expense obligations, enabling management to direct capital toward higher-return growth initiatives.
The company's liquidity position is also being strengthened through internally generated cash flow. During the first quarter, it generated $202.4 million in operating cash flow, reflecting the strong profitability.
The company had $390 million remaining under its share repurchase authorization as of March 31, 2026, providing additional flexibility to return capital to shareholders while helping offset share dilution.
Globus Medical's debt-free balance sheet, nearly $630 million in highly liquid assets and robust operating cash flow position the company well to execute its growth strategy. These financial strengths could serve as important drivers of future market-share gains and margin expansion.
Peer UpdateZimmer Biomet (ZBH - Free Report) ended first-quarter 2026 with cash and cash equivalents of $424.2 million. Debt remained elevated, with total debt of $7.47 billion and net debt of $7.05 billion. The current portion of long-term debt increased to $1.18 billion, reflecting upcoming maturities.
ZBH continued returning capital to shareholders through $250 million of share repurchases during the quarter, a move that may reduce near-term balance-sheet flexibility as the company funds integration efforts and commercial investments. At the end of the first quarter, Zimmer Biomet's debt-to-capital ratio stood at a moderately elevated 37.1%.
Teleflex (TFX - Free Report) exited the first quarter of 2026 with cash and cash equivalents of $309.4 million. TFX’s short-term debt was $103 million, much lower than the cash level. However, long-term borrowings in the quarter were $2.51 billion. Teleflex’s debt-to-capital ratio is 45.9% for the first quarter, implying a relatively high leverage profile that could limit financial flexibility.
GMED’s Stock Price PerformanceOver the past year, Tempus’ shares have surged 30.7%, outperforming the industry’s 6.5% decline.
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GMED’s ValuationGMED currently trades at a forward 12-month Price-to-Sales (P/S) of 3.21X compared with the industry median of 4.52X.
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GMED Stock Estimate TrendIn the past 30 days, Tempus AI's EPS estimate for 2026 has moved north to $4.74.
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GMED currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
