| Snowflake Score | |
|---|---|
| Valuation | 4/6 |
| Future Growth | 2/6 |
| Past Performance | 6/6 |
| Financial Health | 6/6 |
| Dividends | 0/6 |
ON Stock Overview
ON Semiconductor Corporation provides intelligent sensing and power solutions worldwide.
Rewards
Risk Analysis
No risks detected for ON from our risk checks.
ON Semiconductor Competitors
Price History & Performance
| Historical stock prices | |
|---|---|
| Current Share Price | US$63.31 |
| 52 Week High | US$76.78 |
| 52 Week Low | US$41.88 |
| Beta | 1.8 |
| 1 Month Change | -17.47% |
| 3 Month Change | 19.52% |
| 1 Year Change | 28.44% |
| 3 Year Change | 238.92% |
| 5 Year Change | 242.77% |
| Change since IPO | 188.59% |
Recent News & Updates
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...
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.
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
| ON | US Semiconductor | US Market | |
|---|---|---|---|
| 7D | -8.2% | -6.0% | -5.2% |
| 1Y | 28.4% | -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
| ON volatility | |
|---|---|
| ON Average Weekly Movement | 8.3% |
| Semiconductor Industry Average Movement | 8.1% |
| Market Average Movement | 6.9% |
| 10% most volatile stocks in US Market | 15.8% |
| 10% least volatile stocks in US Market | 2.8% |
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
| Founded | Employees | CEO | Website |
|---|---|---|---|
| 1992 | 31,650 | Hassane El-Khoury | https://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
| ON fundamental statistics | |
|---|---|
| Market Cap | US$27.43b |
| Earnings (TTM) | US$1.72b |
| Revenue (TTM) | US$7.62b |
15.9x
P/E Ratio3.6x
P/S RatioIs ON overvalued?
See Fair Value and valuation analysisEarnings & Revenue
| ON income statement (TTM) | |
|---|---|
| Revenue | US$7.62b |
| Cost of Revenue | US$4.07b |
| Gross Profit | US$3.55b |
| Other Expenses | US$1.83b |
| Earnings | US$1.72b |
Last Reported Earnings
Jul 01, 2022
Next Earnings Date
n/a
| Earnings per share (EPS) | 3.97 |
| Gross Margin | 46.62% |
| Net Profit Margin | 22.60% |
| Debt/Equity Ratio | 59.4% |
How did ON perform over the long term?
See historical performance and comparisonValuation
Is ON undervalued compared to its fair value, analyst forecasts and its price relative to the market?
Valuation Score
4/6Valuation 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.
| What is ON's n/a Ratio? | |
|---|---|
| n/a Ratio | 0x |
| n/a | n/a |
| Market Cap | US$27.43b |
| Key Statistics | |
|---|---|
| Enterprise Value/Revenue | 3.8x |
| Enterprise Value/EBITDA | 10.3x |
| PEG Ratio | 3.7x |
Price to Earnings Ratio vs Peers
How does ON's PE Ratio compare to its peers?
| ON PE Ratio vs Peers |
|---|
| Company | PE | Estimated Growth | Market Cap |
|---|---|---|---|
| Peer Average | 25.7x | ||
MCHP Microchip Technology | 22.3x | 8.2% | US$34.4b |
GFS GLOBALFOUNDRIES | 58.5x | 18.7% | US$28.8b |
NXPI NXP Semiconductors | 16.4x | 6.6% | US$40.2b |
MU Micron Technology | 5.6x | 3.5% | US$55.3b |
ON ON Semiconductor | 15.9x | 4.3% | 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.
| Fair Ratio | |
|---|---|
| Current PE Ratio | 15.9x |
| Fair PE Ratio | 23.6x |
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
2/6Future 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
6/6Past 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.
Discover strong past performing companies
Financial Health
How is ON Semiconductor's financial position?
Financial Health Score
6/6Financial 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
0/6Dividend 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.
Discover strong dividend paying companies
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
| Ownership | Name | Shares | Current Value | Change % | Portfolio % | |
|---|---|---|---|---|---|---|
| 50,340,515 | $3.2b | 20.83% | 0.08% | |||
| 45,778,072 | $2.9b | 18.91% | 0.29% | |||
| 45,236,311 | $2.9b | 6.16% | 0.07% | |||
| 17,283,683 | $1.1b | 61.83% | 0.06% | |||
| 16,699,496 | $1.1b | 0.02% | 0.63% | |||
| 13,213,781 | $836.6m | 26.32% | 0.89% | |||
| 12,487,670 | $790.6m | -13.45% | 0.74% | |||
| 9,053,137 | $573.2m | -0.78% | 0.54% | |||
| 8,843,224 | $559.9m | 50.57% | 0.08% | |||
| 8,764,449 | $554.9m | -7.14% | 0.04% | |||
| 8,480,172 | $536.9m | 11.31% | 0.71% | |||
| 7,982,712 | $505.4m | 41.28% | 0.23% | |||
| 5,617,681 | $355.7m | -15.11% | 7.05% | |||
| 5,502,092 | $348.3m | 0% | 0.05% | |||
| 5,052,613 | $319.9m | 4.5% | 0.06% | |||
| 4,623,421 | $292.7m | -23.06% | 0.34% | |||
| 4,453,835 | $282.0m | -4.67% | 0.07% | |||
| 4,386,853 | $277.7m | -1.56% | 2.78% | |||
| 3,919,270 | $248.1m | 0.01% | 0.3% | |||
| 3,532,036 | $223.6m | 13.26% | 2.77% | |||
| 3,439,570 | $217.8m | 42.6% | 0.05% | |||
| 3,433,862 | $217.4m | -2.15% | 0.06% | |||
| 3,365,699 | $213.1m | 34.77% | 0.06% | |||
| 3,202,250 | $202.7m | 1319.03% | 0.04% | |||
| 3,079,167 | $194.9m | 25.87% | 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
| Ticker | Exchange | Primary Security | Security Type | Country | Currency | Listed on |
|---|---|---|---|---|---|---|
| ON | NasdaqGS (Nasdaq Global Select) | Yes | Common Stock | US | USD | Apr 2000 |
| XS4 | DB (Deutsche Boerse AG) | Yes | Common Stock | DE | EUR | Apr 2000 |
| XS4 | XTRA (XETRA Trading Platform) | Yes | Common Stock | DE | EUR | Apr 2000 |
| 0KC4 | LSE (London Stock Exchange) | Yes | Common Stock | GB | USD | Apr 2000 |
| ON * | BMV (Bolsa Mexicana de Valores) | Yes | Common Stock | MX | MXN | Apr 2000 |
| O2NS34 | BOVESPA (Bolsa de Valores de Sao Paulo) | BDR EACH 8 REPR 1 COM | BR | BRL | Jan 2022 |
Company Analysis and Financial Data Status
| Data | Last Updated (UTC time) |
|---|---|
| Company Analysis | 2022/09/24 00:00 |
| End of Day Share Price | 2022/09/23 00:00 |
| Earnings | 2022/07/01 |
| Annual Earnings | 2021/12/31 |
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.