ON Semiconductor (NASDAQ:ON) shares gained nearly 6% today after the chip manufacturer’s fourth-quarter numbers exceeded analysts’ expectations. Despite a year-over-year decline of 3.8%, revenue of $2.02 billion beat estimates by $20 million. Further, EPS of $1.25 exceeded expectations by $0.05.
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During the quarter, PSG (Power Solutions Group) segment sales increased by 4% to $1.09 billion. Conversely, ASG (Advanced Solutions Group) and ISG (Intelligent Sensing Group) segment sales witnessed a decline of 11% and 13%, respectively. While total revenue remained largely flat for the full year, Hassane El-Khoury, the President and CEO of ON, noted that the company’s silicon carbide revenue surged by about four times during this period.
Going forward, El-Khoury expects ON’s upcoming analog and mixed-signal platform to extend the company’s leadership in intelligent power and sensing solutions. For the upcoming quarter, ON expects revenue in the range of $1.8 billion to $1.9 billion. EPS for the quarter is seen landing between $0.98 and $1.10. In addition, the company anticipates a gross margin of 44.5% to 46.5% during this period.
Is ON Semiconductor a Good Buy?
Overall, the Street has a Moderate Buy consensus rating on ON Semiconductor. Following a nearly 31% decline in the company’s share price over the past six months, the average ON price target of $87.38 points to a substantial 23.4% potential upside in the stock.
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