Loading...
Back to narrative

ON: Higher GaN Expectations Will Likely Fail To Justify Current Price

Geopolitical And Tariff Risks Will Compress Margins Despite EV Trends

ON logo
ON
AnalystLowTarget
Not Invested
Published 14 Apr 2025

Update shared on 13 Dec 2025

Fair value Increased 1.71%
Previous
n/a
n/a
AnalystLowTarget's Fair Value
n/a
Loading
1Y
-18.7%
7D
-0.3%

Narrative Update

Analysts have nudged their price target on ON Semiconductor higher to approximately 43.22 dollars from about 42.50 dollars, citing upgraded expectations for revenue growth, improved profit margins, and a slightly lower future price to earnings multiple, despite a modestly higher discount rate.

What's in the News

  • Extended strategic engagement with FORVIA HELLA, which will adopt onsemi PowerTrench T10 MOSFET technology across advanced automotive platforms, supporting higher efficiency and power density in a long term supply agreement (client announcement)
  • Entered a strategic cooperation with InnoScience to combine InnoScience 8 inch GaN on silicon process with onsemi system packaging expertise, targeting rapid GaN adoption in EVs, AI, data centers, and industrial markets, with expected GaN sales of hundreds of millions of dollars (strategic alliance)
  • Authorized a new share repurchase program of up to 6 billion dollars, valid through December 31, 2028, as part of an active capital return strategy (buyback transaction announcement)
  • Updated fourth quarter 2025 guidance, projecting revenue of 1.48 to 1.58 billion dollars and diluted EPS of 0.56 to 0.66 dollars (corporate guidance)
  • Announced that Teledyne Technologies selected the Treo 65nm analog and mixed signal platform for next generation infrared imaging ROICs, reinforcing onsemi role in aerospace and defense and leveraging its East Fishkill, NY trusted facility (client announcement)

Valuation Changes

  • Fair Value: increased slightly from approximately 42.50 dollars to about 43.22 dollars per share.
  • Discount Rate: risen modestly from roughly 10.7 percent to about 11.1 percent, reflecting a slightly higher perceived risk or cost of capital.
  • Revenue Growth: increased meaningfully from around 2.1 percent to roughly 4.4 percent, indicating stronger top line expectations.
  • Net Profit Margin: improved from about 25.0 percent to roughly 27.2 percent, implying better expected profitability.
  • Future P/E: decreased from approximately 12.3 times to about 10.9 times, suggesting a lower valuation multiple on projected earnings.

Have other thoughts on ON Semiconductor?

Create your own narrative on this stock, and estimate its Fair Value using our Valuator tool.

Create Narrative

Disclaimer

AnalystLowTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystLowTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystLowTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.