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ON

ON Semiconductor NasdaqGS:ON Stock Report

Last Price

US$63.31

Market Cap

US$27.4b

7D

-8.2%

1Y

28.4%

Updated

24 Sep, 2022

Data

Company Financials +
ON fundamental analysis
Snowflake Score
Valuation4/6
Future Growth2/6
Past Performance6/6
Financial Health6/6
Dividends0/6

ON Stock Overview

ON Semiconductor Corporation provides intelligent sensing and power solutions worldwide.

ON Semiconductor Competitors

Price History & Performance

Summary of all time highs, changes and price drops for ON Semiconductor
Historical stock prices
Current Share PriceUS$63.31
52 Week HighUS$76.78
52 Week LowUS$41.88
Beta1.8
1 Month Change-17.47%
3 Month Change19.52%
1 Year Change28.44%
3 Year Change238.92%
5 Year Change242.77%
Change since IPO188.59%

Recent News & Updates

Sep 20
When Should You Buy ON Semiconductor Corporation (NASDAQ:ON)?

When Should You Buy ON Semiconductor Corporation (NASDAQ:ON)?

ON Semiconductor Corporation ( NASDAQ:ON ) saw a significant share price rise of over 20% in the past couple of months...

Aug 28

ON Semiconductor: Don't Buy Into This Rapid Surge - Sell And Cut Exposure

Summary ON Semi stock has surged tremendously from its July lows, outperforming its broad semi peers and the market. However, we posit that its rapid surge is unsustainable. Our analysis suggests that onsemi's rapid growth cadence should normalize markedly moving forward. Therefore, it should put further downward pressure on its stock. We posit that the market seems to have de-rated ON, suggesting that it's adjusting for potential growth normalization moving ahead. We also noted that ON formed a validated bull trap in August, which doesn't augur well for its buying momentum, as it formed a "mountain face." Therefore, we revise our rating from Hold to Sell. We urge investors to use the rally to cut exposure and rotate away. Thesis ON Semiconductor Corporation (ON) stock has staged a remarkable reversal from its July lows, surging more than 35% since we updated investors not to add yet (Hold rating) in our early July update. As a result, ON outperformed its broad semi peers and the market significantly, as buying momentum continued to build up markedly following a robust Q2 earnings release in early August. We must highlight that we didn't expect the recovery in ON to be so rapid over the past month, even as we are confident that semi stocks have likely staged their medium-term bottom in July. However, given the sharp momentum spike in ON Semi stock through August, we are increasingly confident that investors should use the recent rally to cut exposure and rotate. We postulate that its recent surge is unsustainable, and investors should expect a deeper pullback to follow subsequently. Notwithstanding, we concur that ON Semi is still well-positioned to leverage the secular drivers underpinning the growth in automotive and industrial applications. However, its recent growth trajectory has been well above its medium-term growth guidance. Therefore, we posit that it seems reasonable to expect ON Semi's growth to normalize moving forward, which could put further downward pressure on its stock. Therefore, we revise our rating on ON from Hold to Sell. We urge investors to cut exposure and use the rally to rotate away their exposure over time. Can ON Semi Sustain Its Tremendous Growth Cadence? ON Semi revenue by end market change % (Company filings) ON Semi reported another quarter of robust revenue growth in its automotive and industrial segment, which accounted for 66% of its Q2 revenue base. As seen above, the company posted revenue growth of 42.5% for automotive and 35% for industrial, building on its strength over the past five quarters. As a result of its strategic revamp, focusing on the critical drivers in automotive and industrial, the company has also managed to mitigate the weakness in the consumer end market, which engulfed its peers with significant exposure. ON Semi revenue by segment change % (Company filings) Moreover, its growth trajectory is diversified across its key segments, with the image sensor group posting another impressive 44.3% YoY increase, following Q1's 32.4% growth. DIGITIMES also highlighted in a recent commentary that the CMOS image sensor market ((CIS)) would continue to be supported by tailwinds from more autonomous driving applications, undergirding its structural growth prospects. DIGITIMES articulated: As autonomous driving develops and high-end advanced driver assistance systems rapidly become popularized, it is expected that the scale of the automotive CMOS image sensor market will continue to expand. According to market analysts, the size of the global automotive CIS market will go from $1.91 billion in 2021 to $3.27 billion in 2025, with a compound annual growth rate of 15.4%. The current industry leader in automotive CIS, ON Semi, has a market share of 60%. - DIGITIMES However, we would like to remind investors that the company's long-term model through FY25 suggests the above-trend growth trajectory seen over the past year could normalize. The company's FY25 model indicates a 7-9% revenue CAGR from FY20. Coupled with its gross margin guidance of 48-50% through FY25, we believe, arguably, ON Semi's outsized growth could peak in FY22 before moderating. ON Semi revenue change % and adjusted EBIT change % consensus estimates (S&P Cap IQ) The consensus estimates (bullish) indicate that ON Semi's quarterly growth could have peaked in Q1, and investors should expect further moderation through FY23. Consequently, it's also expected to impact its operating leverage gains as its adjusted EBIT growth cadence also normalizes. Therefore, investors need to be wary of expecting ON Semi to maintain its ability to continue its massive growth cadence. ON Semi adjusted gross margins % consensus estimates (S&P Cap IQ) In addition, the company's adjusted gross margins could also have peaked in Q2 as it ramps its silicon carbide fabs. As they remain subscale, the company expects near-term headwinds, even though it should be accretive over time to its corporate average. Notwithstanding, ON Semi's adjusted gross margins have reached the high end of its FY25 guidance range. Therefore, the company's gross margins leverage should not be tailwinds in lifting its profitability profile moving forward. ON's Valuations Have Been De-rated ON EV/NTM EBIT valuation trend (koyfin) Our analysis suggests that ON's valuations have been de-rated, even as it has likely bottomed out in July. In addition, we noted that the market has been unwilling to re-rate ON above its 5Y mean, even as its secular growth drivers led to outsized revenue growth. Therefore, we posit that the market could be adjusting its expectations for growth normalization moving ahead, in line with the consensus estimates.

Aug 22
Does ON Semiconductor (NASDAQ:ON) Deserve A Spot On Your Watchlist?

Does ON Semiconductor (NASDAQ:ON) Deserve A Spot On Your Watchlist?

The excitement of investing in a company that can reverse its fortunes is a big draw for some speculators, so even...

Shareholder Returns

ONUS SemiconductorUS Market
7D-8.2%-6.0%-5.2%
1Y28.4%-29.7%-23.0%

Return vs Industry: ON exceeded the US Semiconductor industry which returned -29.7% over the past year.

Return vs Market: ON exceeded the US Market which returned -23.1% over the past year.

Price Volatility

Is ON's price volatile compared to industry and market?
ON volatility
ON Average Weekly Movement8.3%
Semiconductor Industry Average Movement8.1%
Market Average Movement6.9%
10% most volatile stocks in US Market15.8%
10% least volatile stocks in US Market2.8%

Stable Share Price: ON is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 8% a week.

Volatility Over Time: ON's weekly volatility (8%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
199231,650Hassane El-Khouryhttps://www.onsemi.com

ON Semiconductor Corporation provides intelligent sensing and power solutions worldwide. Its intelligent power technologies enable the electrification of the automotive industry that allows for lighter and longer-range electric vehicles, empowers fast-charging systems, and propels sustainable energy for the solar strings, industrial power, and storage systems. The company operates through three segments the Power Solutions Group, the Advanced Solutions Group, and the Intelligent Sensing Group segments.

ON Semiconductor Fundamentals Summary

How do ON Semiconductor's earnings and revenue compare to its market cap?
ON fundamental statistics
Market CapUS$27.43b
Earnings (TTM)US$1.72b
Revenue (TTM)US$7.62b

15.9x

P/E Ratio

3.6x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
ON income statement (TTM)
RevenueUS$7.62b
Cost of RevenueUS$4.07b
Gross ProfitUS$3.55b
Other ExpensesUS$1.83b
EarningsUS$1.72b

Last Reported Earnings

Jul 01, 2022

Next Earnings Date

n/a

Earnings per share (EPS)3.97
Gross Margin46.62%
Net Profit Margin22.60%
Debt/Equity Ratio59.4%

How did ON perform over the long term?

See historical performance and comparison
We’ve recently updated our valuation analysis.

Valuation

Is ON undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

4/6

Valuation Score 4/6

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Below Fair Value

  • Significantly Below Fair Value

  • Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for ON?

Other financial metrics that can be useful for relative valuation.

ON key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue3.8x
Enterprise Value/EBITDA10.3x
PEG Ratio3.7x

Price to Earnings Ratio vs Peers

How does ON's PE Ratio compare to its peers?

ON PE Ratio vs Peers
The above table shows the PE ratio for ON vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyPEEstimated GrowthMarket Cap
Peer Average25.7x
MCHP Microchip Technology
22.3x8.2%US$34.4b
GFS GLOBALFOUNDRIES
58.5x18.7%US$28.8b
NXPI NXP Semiconductors
16.4x6.6%US$40.2b
MU Micron Technology
5.6x3.5%US$55.3b
ON ON Semiconductor
15.9x4.3%US$27.4b

Price-To-Earnings vs Peers: ON is good value based on its Price-To-Earnings Ratio (15.9x) compared to the peer average (25.7x).


Price to Earnings Ratio vs Industry

How does ON's PE Ratio compare vs other companies in the US Semiconductor Industry?

Price-To-Earnings vs Industry: ON is expensive based on its Price-To-Earnings Ratio (15.9x) compared to the US Semiconductor industry average (15.7x)


Price to Earnings Ratio vs Fair Ratio

What is ON's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

ON PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio15.9x
Fair PE Ratio23.6x

Price-To-Earnings vs Fair Ratio: ON is good value based on its Price-To-Earnings Ratio (15.9x) compared to the estimated Fair Price-To-Earnings Ratio (23.6x).


Share Price vs Fair Value

What is the Fair Price of ON when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: ON ($63.31) is trading below our estimate of fair value ($94.23)

Significantly Below Fair Value: ON is trading below fair value by more than 20%.


Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is less than 20% higher than the current share price.


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Future Growth

How is ON Semiconductor forecast to perform in the next 1 to 3 years based on estimates from 26 analysts?

Future Growth Score

2/6

Future Growth Score 2/6

  • Earnings vs Savings Rate

  • Earnings vs Market

  • High Growth Earnings

  • Revenue vs Market

  • High Growth Revenue

  • Future ROE


4.3%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: ON's forecast earnings growth (4.3% per year) is above the savings rate (1.9%).

Earnings vs Market: ON's earnings (4.3% per year) are forecast to grow slower than the US market (14.7% per year).

High Growth Earnings: ON's earnings are forecast to grow, but not significantly.

Revenue vs Market: ON's revenue (4.3% per year) is forecast to grow slower than the US market (7.6% per year).

High Growth Revenue: ON's revenue (4.3% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: ON's Return on Equity is forecast to be high in 3 years time (24.2%)


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Past Performance

How has ON Semiconductor performed over the past 5 years?

Past Performance Score

6/6

Past Performance Score 6/6

  • Quality Earnings

  • Growing Profit Margin

  • Earnings Trend

  • Accelerating Growth

  • Earnings vs Industry

  • High ROE


11.9%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: ON has high quality earnings.

Growing Profit Margin: ON's current net profit margins (22.6%) are higher than last year (8.8%).


Past Earnings Growth Analysis

Earnings Trend: ON's earnings have grown by 11.9% per year over the past 5 years.

Accelerating Growth: ON's earnings growth over the past year (230.1%) exceeds its 5-year average (11.9% per year).

Earnings vs Industry: ON earnings growth over the past year (230.1%) exceeded the Semiconductor industry 49.3%.


Return on Equity

High ROE: ON's Return on Equity (31.9%) is considered high.


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Financial Health

How is ON Semiconductor's financial position?

Financial Health Score

6/6

Financial Health Score 6/6

  • Short Term Liabilities

  • Long Term Liabilities

  • Debt Level

  • Reducing Debt

  • Debt Coverage

  • Interest Coverage

Financial Position Analysis

Short Term Liabilities: ON's short term assets ($4.8B) exceed its short term liabilities ($1.7B).

Long Term Liabilities: ON's short term assets ($4.8B) exceed its long term liabilities ($3.7B).


Debt to Equity History and Analysis

Debt Level: ON's net debt to equity ratio (25.6%) is considered satisfactory.

Reducing Debt: ON's debt to equity ratio has reduced from 147.8% to 59.4% over the past 5 years.

Debt Coverage: ON's debt is well covered by operating cash flow (61.5%).

Interest Coverage: ON's interest payments on its debt are well covered by EBIT (21.3x coverage).


Balance Sheet


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Dividend

What is ON Semiconductor current dividend yield, its reliability and sustainability?

Dividend Score

0/6

Dividend Score 0/6

  • Notable Dividend

  • High Dividend

  • Stable Dividend

  • Growing Dividend

  • Earnings Coverage

  • Cash Flow Coverage

Dividend Yield vs Market

Notable Dividend: Unable to evaluate ON's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate ON's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if ON's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if ON's dividend payments have been increasing.


Earnings Payout to Shareholders

Earnings Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Cash Payout to Shareholders

Cash Flow Coverage: Unable to calculate sustainability of dividends as ON has not reported any payouts.


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Management

How experienced are the management team and are they aligned to shareholders interests?

1.7yrs

Average management tenure


CEO

Hassane El-Khoury (42 yo)

1.75yrs

Tenure

US$12,825,562

Compensation

Mr. Hassane S. El-Khoury serves as Director of Sakuu Corporation since August 2020. He has been Chief Executive Officer, President and Director at ON Semiconductor Corporation since December 07, 2020. He s...


CEO Compensation Analysis

Compensation vs Market: Hassane's total compensation ($USD12.83M) is about average for companies of similar size in the US market ($USD13.05M).

Compensation vs Earnings: Hassane's compensation has increased by more than 20% in the past year.


Leadership Team

Experienced Management: ON's management team is not considered experienced ( 1.7 years average tenure), which suggests a new team.


Board Members

Experienced Board: ON's board of directors are not considered experienced ( 2.9 years average tenure), which suggests a new board.


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Top 25 shareholders own 68.73% of the company
OwnershipNameSharesCurrent ValueChange %Portfolio %
11.62%
The Vanguard Group, Inc.
50,340,515$3.2b20.83%0.08%
10.57%
FMR LLC
45,778,072$2.9b18.91%0.29%
10.44%
BlackRock, Inc.
45,236,311$2.9b6.16%0.07%
3.99%
State Street Global Advisors, Inc.
17,283,683$1.1b61.83%0.06%
3.85%
Janus Henderson Group plc
16,699,496$1.1b0.02%0.63%
3.05%
Artisan Partners Limited Partnership
13,213,781$836.6m26.32%0.89%
2.88%
Allianz Asset Management AG
12,487,670$790.6m-13.45%0.74%
2.09%
Pictet Asset Management Limited
9,053,137$573.2m-0.78%0.54%
2.04%
Geode Capital Management, LLC
8,843,224$559.9m50.57%0.08%
2.02%
Capital Research and Management Company
8,764,449$554.9m-7.14%0.04%
1.96%
Mackenzie Financial Corporation
8,480,172$536.9m11.31%0.71%
1.84%
Goldman Sachs Asset Management, L.P.
7,982,712$505.4m41.28%0.23%
1.3%
Starboard Value LP
5,617,681$355.7m-15.11%7.05%
1.27%
Norges Bank Investment Management
5,502,092$348.3m0%0.05%
1.17%
UBS Asset Management
5,052,613$319.9m4.5%0.06%
1.07%
Macquarie Investment Management Business Trust
4,623,421$292.7m-23.06%0.34%
1.03%
Dimensional Fund Advisors LP
4,453,835$282.0m-4.67%0.07%
1.01%
RobecoSAM AG
4,386,853$277.7m-1.56%2.78%
0.9%
First Trust Advisors LP
3,919,270$248.1m0.01%0.3%
0.82%
ArrowMark Colorado Holdings, LLC
3,532,036$223.6m13.26%2.77%
0.79%
BNY Mellon Asset Management
3,439,570$217.8m42.6%0.05%
0.79%
Managed Account Advisors LLC
3,433,862$217.4m-2.15%0.06%
0.78%
Charles Schwab Investment Management, Inc.
3,365,699$213.1m34.77%0.06%
0.74%
Wellington Management Group LLP
3,202,250$202.7m1319.03%0.04%
0.71%
SEI Investments Company
3,079,167$194.9m25.87%0.34%

Company Information

ON Semiconductor Corporation's employee growth, exchange listings and data sources


Key Information

  • Name: ON Semiconductor Corporation
  • Ticker: ON
  • Exchange: NasdaqGS
  • Founded: 1992
  • Industry: Semiconductors
  • Sector: Semiconductors
  • Implied Market Cap: US$27.428b
  • Shares outstanding: 433.24m
  • Website: https://www.onsemi.com

Number of Employees


Location

  • ON Semiconductor Corporation
  • 5005 East McDowell Road
  • Phoenix
  • Arizona
  • 85008
  • United States


Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
ONNasdaqGS (Nasdaq Global Select)YesCommon StockUSUSDApr 2000
XS4DB (Deutsche Boerse AG)YesCommon StockDEEURApr 2000
XS4XTRA (XETRA Trading Platform)YesCommon StockDEEURApr 2000
0KC4LSE (London Stock Exchange)YesCommon StockGBUSDApr 2000
ON *BMV (Bolsa Mexicana de Valores)YesCommon StockMXMXNApr 2000
O2NS34BOVESPA (Bolsa de Valores de Sao Paulo)BDR EACH 8 REPR 1 COMBRBRLJan 2022

Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2022/09/24 00:00
End of Day Share Price2022/09/23 00:00
Earnings2022/07/01
Annual Earnings2021/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.