ONTO INNOVATION INC.

Where It Passes

Where It Falls Short

• Valuation0% pass✓ 1✗ 27▾

  No clean pass — all 13 investors flag at least one valuation criterion

  Price / 3-yr avg EPS65.7x

  ✗Graham<= 15x

  Price-to-Book Ratio4.8x

  ✗Graham<= 1.5x

  P/E x P/B316.40

  ✗Graham<= 22.5

  Basic earnings-growth PEG (dividends excluded)2.12

  ✗Lynch< 1.0 (ideally < 0.5)

  EBIT / Enterprise Value1.9%

  ✗Greenblatt> 10%

  Earnings Yield + ROC AssessmentEY=1.9%, ROC=13.6%

  ✗GreenblattBoth EY > 10% and ROC > 25%

  Price / EPS73.2x

  ✗Dreman< 12x✗Templeton< 12x (fixed ceiling; proxy for the market's cheapest 40%)

  Price / (CFO / Shares)30.8x

  ✗Dreman< 8x

  Price / Book Value per Share4.8x

  ✗Dreman< 1.2x✗Templeton< 1.5x✗SchlossP/B <= 0.80x (app cutoff)

  Valuation ReasonablenessP/E=73.2x

  ✗MungerP/E < 25 or Owner Earnings Yield > 5%

  P/E or FCF YieldP/E=73.2x, FCF Yield=3.0%

  ✗PabraiP/E < 15 or FCF Yield > 10%

  P/B or P/E vs. Historical AverageP/E=73.2x, P/B=4.8x

  ✗MarksP/E < 15 or P/B < 2.0

  Discount to Intrinsic Value-337.9% (IV=$46.50 vs Price=$203.62)

  ✗Marks>= 20% below intrinsic value

  Price / FCF per Share33.8x

  ✗Ackman<= 25

  Price vs. Trailing Low221% of trailing low ($91.94)

  ✗Templeton<= 120% of trailing low (certified split-adjusted live window)

  Net income / market capitalization+1.51%; #2848/6340 (top 44.9%)

  ✗AsnessTop 30% of eligible cross-section✗OshaughnessyTop 10% of eligible cross-section

  Positive book equity / market capitalization+0.1980; #4198/6449 (top 65.1%)

  ✗AsnessTop 30% of eligible cross-section

  Price / Diluted EPS73.2x

  ✗NeffP/E <= 15x (app proxy for a P/E 40%-60% below the market)

  (EPS CAGR % + Dividend Yield %) / P/E

  ✗Neff> 0.7 (Neff's published traditional edge)

  Price / Tangible Book Value per Share8.74x

  ✗SchlossP/TBV <= 1.00x (app cutoff)

  Book Value per Share Change+63.4%

  ✓SchlossLatest BVPS >= earliest BVPS over >= 3 years (app rule)

  Revenue / market capitalization+0.1312; #4159/5247 (top 79.3%)

  ✗OshaughnessyTop 10% of eligible cross-section

  (Operating cash flow - capex) / market capitalization+2.48%; #2161/4519 (top 47.8%)

  ✗OshaughnessyTop 10% of eligible cross-section

  Trailing six-month price return through the evaluation date-30.99%; #4454/6202 (top 71.8%)

  ✗OshaughnessyTop 10% of eligible cross-section
• Valuation models0% pass✗ 8▾

  ONTO overvalued: all 8 models price fair value below $203.62 (median $60.46)

  Graham fair value$51.42

  ✗Graham-296.0% margin vs $203.62

  Lynch fair value$69.50

  ✗Lynch-193.0% margin vs $203.62

  Greenblatt fair value$23.11

  ✗Greenblatt-781.1% margin vs $203.62

  Dreman fair value$46.50

  ✗Dreman-337.9% margin vs $203.62

  Munger fair value$109.89

  ✗Munger-85.3% margin vs $203.62

  Akre fair value$86.29

  ✗Akre-136.0% margin vs $203.62

  Ackman fair value$81.38

  ✗Ackman-150.2% margin vs $203.62

  Templeton fair value$49.95

  ✗Templeton-307.6% margin vs $203.62
• Profitability6% pass✓ 11✗ 24▾

  15 of 16 flag ONTO's profitability — Graham, Buffett, Lynch +12 more

  Positive EPS (10 years)14/26 years positive

  ✗GrahamPositive EPS every year for 10 years

  EPS Growth (3-yr avg, 10-yr window)

  ✗Graham>= 33% growth

  Net Income Positive (10+ years)20/26 years positive

  ✗BuffettPositive every year for 10+ years

  ROE (up to 5-year arithmetic mean)9.6%

  ✗Buffett> 15% arithmetic mean (app rule)

  Operating Margin (10-yr trend)13.2% (latest)

  ✓BuffettStable or rising over 10 years

  Free Cash Flow Proxy$45.1M

  ✓BuffettPositive and growing

  Earnings Variance (10-yr CoV)

  ✗BuffettCoV < 0.3

  Retained Earnings Effectiveness

  ✗Buffett$1 retained -> > $1 market value created

  Basic earnings-growth PEG (dividends excluded)2.12

  ✗Lynch< 1.0 (ideally < 0.5)

  3-5 Year EPS CAGR34.6%

  ✓Lynch15-30% (Fast Grower); > 0% to pass

  ROE7.6%

  ✗Lynch> 15%

  EBIT / Enterprise Value1.9%

  ✗Greenblatt> 10%

  Earnings Yield + ROC AssessmentEY=1.9%, ROC=13.6%

  ✗GreenblattBoth EY > 10% and ROC > 25%

  Net Income / Total Assets5.78%

  ✓PiotroskiROA > 0

  ROA Change YoY9.53% -> 5.78% (delta: -3.75%)

  ✗PiotroskiCurrent ROA > Prior ROA

  (CFO / Total Assets) vs ROACFO/Assets=13.87%, ROA=5.78%

  ✓PiotroskiCFO/Assets > ROA

  Gross Margin Change YoY52.2% -> 49.7%

  ✗PiotroskiImproved YoY

  Pre-Tax Income / Revenue14.6%

  ✓Dreman>= 8%

  Net Income / Shareholders' Equity7.6%

  ✗Dreman> 12%

  Margin of SafetyP/E=73.2x, P/B=4.8x

  ✗PabraiP/B < 1.5 or P/E < 15

  Return on Equity8.0% (3-yr avg)

  ✗AkreROE > 20% (3-year avg)

  Discount to Intrinsic Value-337.9% (IV=$46.50 vs Price=$203.62)

  ✗Marks>= 20% below intrinsic value

  Positive Net Income Frequency20/23 years positive

  ✓MarksPositive net income in >= 7 of last 10 years

  Operating Income / Revenue15.7%

  ✓Ackman>= 15%

  Net Income / Shareholders Equity7.6%

  ✗Ackman>= 15%

  5-Year EPS CAGR34.6% CAGR over 5 years

  ✓Templeton> 0% (5-year EPS CAGR)

  Operating Margin Trend14.2% (2023) -> 13.2% (2025)

  ✗TempletonNon-negative operating-margin trend over 3 years

  Revenue growth vs. gross and operating margin trendgross margin 51.5% -> 49.7%, operating margin 14.2% -> 13.2%

  ✗SleepRevenue rising; gross margin flat or falling; operating margin holding

  Net income / market capitalization+1.51%; #2848/6340 (top 44.9%)

  ✗AsnessTop 30% of eligible cross-section✗OshaughnessyTop 10% of eligible cross-section

  Gross profit / total assets+17.83%; #2210/3702 (top 59.7%)

  ✗AsnessTop 30% of eligible cross-section

  Net income / positive book equity+7.64%; #2144/5226 (top 41.0%)

  ✗AsnessTop 30% of eligible cross-section

  Negative 5-year standard deviation of ROA-0.0239; #1646/5884 (top 28.0%)

  ✓AsnessTop 30% of eligible cross-section

  3-5 Year Diluted EPS CAGR34.6% over 5 years

  ✗Neff7%-20% annualized

  Positive Diluted-EPS Years10/10 years positive

  ✓Schloss>= 70% positive over 5-10 observed years (app rule)
• Growth25% pass✓ 5✗ 8▾

  6 of 8 flag ONTO's growth — Graham, Lynch, Dreman +3 more

  EPS Growth (3-yr avg, 10-yr window)

  ✗Graham>= 33% growth

  Basic earnings-growth PEG (dividends excluded)2.12

  ✗Lynch< 1.0 (ideally < 0.5)

  3-5 Year EPS CAGR34.6%

  ✓Lynch15-30% (Fast Grower); > 0% to pass

  Inventory Growth vs Revenue GrowthInv: 63.5% vs Rev: 30.9%

  ✗LynchInventory growth < Revenue growth

  EPS Growth Direction

  ✗DremanPositive over recent years

  EPS CAGR

  ✗Dreman> 5% annualized

  Positive Net Income Frequency20/23 years positive

  ✓MarksPositive net income in >= 7 of last 10 years

  3yr Median Revenue Growth1.8%

  ✗Ackman>= 5%

  Positive EPS Growth Frequency3/5 years with positive EPS growth

  ✓AckmanPositive EPS growth in >= 3 of last 5 years

  5-Year EPS CAGR34.6% CAGR over 5 years

  ✓Templeton> 0% (5-year EPS CAGR)

  Revenue growth vs. gross and operating margin trendgross margin 51.5% -> 49.7%, operating margin 14.2% -> 13.2%

  ✗SleepRevenue rising; gross margin flat or falling; operating margin holding

  5-year Revenue CAGR12.6%

  ✓SleepCAGR > 7%

  3-5 Year Diluted EPS CAGR34.6% over 5 years

  ✗Neff7%-20% annualized
• Verdicts27% pass✓ 4✗ 11▾

  Split decision: 10 FAIL · 4 PASS · 2 NEUTRAL

  Overall verdict

  ✗GrahamFAIL (3/9)✓BuffettPASS (4/9)✗LynchFAIL (1/7)✗GreenblattRank #1611✓PiotroskiPASS (F-Score 4)✗DremanFAIL (4/11)✗MungerFAIL (0/4)✗PabraiFAIL (0/3)✗AkreFAIL (1/6)✗MarksFAIL (2/5)✓AckmanPASS (5/9)✗TempletonFAIL (3/8)✓SleepPASS (3/6)✗AsnessFAIL (Rank #1233/2370 (Top 52.0%))✗NeffFAIL (2/6)•SchlossNEUTRAL (4/7)•OshaughnessyNEUTRAL (Not ranked)
• Efficiency38% pass✓ 4✗ 7▾

  5 of 8 flag ONTO's efficiency — Greenblatt, Piotroski, Munger +2 more

  Current Ratio6.78

  ✓Graham>= 2.0

  ROIC (3-5 yr avg)12.7%

  ✓Buffett> 10%

  ROIC - WACC+2.7%

  ✓BuffettPositive (WACC = 10%)

  EBIT / (NWC + Net Fixed Assets)13.6%

  ✗Greenblatt> 25%

  Current Ratio Change YoY8.69 -> 5.79

  ✗PiotroskiIncreased YoY

  Revenue / Total Assets Change YoY0.47x -> 0.42x

  ✗PiotroskiImproved YoY

  Current Assets / Current Liabilities6.78

  ✓Dreman> 1.5

  Return on Invested Capital4.7%

  ✗Munger> 15%

  ROIC (high and growing)FY2023: ROIC=unavailable; FY2024: ROIC=unavailable; FY2025: ROIC=unavailable

  ✗AkreLatest 3 consecutive FYs: ROIC > 15% in each

  Reinvestment Rate x ROIC

  ✗AkreReinvestment Rate * ROIC > 10%

  ROIC (5-year)

  ✗SleepROIC > 12% in a majority of years
• Debt & Leverage50% pass✓ 8✗ 7▾

  6 of 12 pass — Buffett, Lynch, Munger +3 more object

  LT Debt vs Net Current AssetsLT Debt $1.5B vs NCA $1.8B

  ✓GrahamLT Debt <= Net Current Assets

  Debt/Equity & Interest Coverage

  ✗BuffettD/E < 0.5 AND Interest Coverage > 5x

  Total Debt / Equity0.76

  ✗Lynch< 0.33

  Cash - Long-term Debt$-1.1B

  ✗LynchPositive preferred

  LT Debt / Total Assets Change0.00% -> 0.00%

  ✓PiotroskiDecreased YoY

  Current Assets / Current Liabilities6.78

  ✓Dreman> 1.5✓SchlossCurrent ratio >= 1.50x (app cutoff)

  Total Debt / Shareholders' Equity0.76

  ✓Dreman< 0.8✓Templeton< 1.0 (fixed cap; proxy for below-sector-median leverage)✓SchlossD/E < 1.00x

  Debt Levels0.76

  ✗MungerDebt/Equity < 0.5✗AkreDebt/Equity < 0.3

  Interest Coverage & Debt/EBITDA

  ✗MarksInterest Coverage > 3x; Debt/EBITDA < 4x

  Total Debt / Shareholders Equity0.76

  ✓Ackman<= 1.0

  Negative debt-to-equity (higher means less debt)-0.7578; #2932/4210 (top 69.6%)

  ✗AsnessTop 30% of eligible cross-section
• Cash Flow50% pass✓ 6✗ 6▾

  5 of 10 pass — Lynch, Dreman, Pabrai +2 more object

  Free Cash Flow Proxy$45.1M

  ✓BuffettPositive and growing

  FCF Positive and Growing$247.6M

  ✗LynchPositive and growing

  Operating Cash Flow$328.3M

  ✓PiotroskiCFO > 0

  (CFO / Total Assets) vs ROACFO/Assets=13.87%, ROA=5.78%

  ✓PiotroskiCFO/Assets > ROA

  Price / (CFO / Shares)30.8x

  ✗Dreman< 8x

  P/E or FCF YieldP/E=73.2x, FCF Yield=3.0%

  ✗PabraiP/E < 15 or FCF Yield > 10%

  FCF Positive13/17 years FCF positive

  ✓MarksPositive FCF in majority of recent years

  (OCF - CapEx) / Market Cap2.4%

  ✗Ackman>= 4%

  Price / FCF per Share33.8x

  ✗Ackman<= 25

  Positive Operating Cash Flow frequency14/17 years positive

  ✓SleepPositive OCF in >= 70% of available years

  Operating Cash Flow - Capital Expenditures$247.6M

  ✓Neff> $0 (app proxy for a strong fundamental case)

  (Operating cash flow - capex) / market capitalization+2.48%; #2161/4519 (top 47.8%)

  ✗OshaughnessyTop 10% of eligible cross-section